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The Rising Resistance to Cloud-Based CAD

21 Jul, 2015

CAD Manager Column: It’s in software vendors’ best interest to retain control of their customers’ CAD software and data — but what about the users that rely on that software?

CAD managers are frequently forced to cope with technological change, because it impacts the CAD tools we support. And for the past few years, cloud-based CAD has been pitched as change that will revolutionize CAD workflows, so CAD managers clearly have reason to be concerned about how this technology will alter the CAD ecosystem. However, in the past year I’ve noticed a trend among my clients — increasingly, they’re perceiving cloud-based CAD not as the answer to their workplace challenges, but as a source of problems.



In this edition of the CAD Manager’s Newsletter, I’ll start my discussion of why resistance to cloud-based CAD technology is growing, and explore some key business trends that are limiting cloud adoption. Here goes.



The Push for Centralization of CAD



Think about the following highly touted technology trends for a moment:

CAD software rental (the software is on your machine but the license is turned on/off via the cloud)

Hosted applications (the software is not installed on your machine; it is located at the software vendor’s data center instead)

Design data stored in cloud data repositories.

Can you spot the common thread in these trends? It can be summarized in one word: centralization.



In this new world of CAD proposed by vendors, less and less software and data will be under your control, and the software and data storage companies will become more and more powerful. The idea is that your software won’t be yours anymore, and your data won’t even reside on your company server.



Who Benefits from This Change?



This centralized model of CAD use obviously benefits the software and cloud vendors greatly (because it allows them to charge for their software and servers on an ongoing basis), but it also gives them ultimate control over your CAD system — they can disconnect you from your applications and data unless you keep paying them.



On the customer side, however, the CAD managers, users, and company executives I talk with are growing ever more skeptical of this centralized CAD concept, and market data shows that movement toward cloud storage and software rental is proceeding much, much more slowly than analysts had predicted (for examples, see “Despite Marketing Hype, CAD Users Adopt New Technologies Cautiously”). Furthermore, recent moves by software companies (such as Microsoft, Intuit, and Autodesk, to name a few) to phase out perpetual licenses (those that continue to run on the installed machine indefinitely) in favor of annual subscription rental models show they are trying to force the issue.



So the question becomes: If having all our software and data on the cloud is really the best way to do things, why aren’t companies stampeding to adopt that methodology? After all, software companies wouldn’t have to push us towards centralization if it is the best business option.



Resisting Cloud Centralization



Over the past year, I’ve noticed that more and more of the CAD-using companies that I talk to are becoming “anti-cloud.” Why the resistance? The reasons I hear from my clients focus on one or more of the following concerns:

Cost containment. If a company continues to run its current software on its own servers, it doesn’t have to face new monthly costs. If the software and the data storage are rented instead, the costs add up quickly.

If a company continues to run its current software on its own servers, it doesn’t have to face new monthly costs. If the software and the data storage are rented instead, the costs add up quickly. The benefits of ownership. If a CAD-using company already owns their software, they can typically maintain that software at annual support rates that are cheaper than renting. And if they ever stop paying the annual support, they can keep running the software without fear of being shut down by a cloud vendor. In the field, I see a lot of 7- to 10-year-old software that is no longer supported by the software vendor, but it still functions effectively.

If a CAD-using company already owns their software, they can typically maintain that software at annual support rates that are cheaper than renting. And if they ever stop paying the annual support, they can keep running the software without fear of being shut down by a cloud vendor. In the field, I see a lot of 7- to 10-year-old software that is no longer supported by the software vendor, but it still functions effectively. Network security. No matter what anyone predicts, it’s indisputable that there have been profound network security problems in recent years. You’ve surely heard the stories of credit card account hacking, Department of Defense records being exposed, file sharing sites being compromised — the list goes on and on. You don’t have to be an IT expert to see that as more of your company design processes and data are moved to cloud-based tools, your company becomes more vulnerable. The potential of losing design data to a foreign company not subject to patent and intellectual property laws is a huge incentive to keep data off a public domain cloud. This is especially true when the cloud servers could be located in other countries.

No matter what anyone predicts, it’s indisputable that there have been profound network security problems in recent years. You’ve surely heard the stories of credit card account hacking, Department of Defense records being exposed, file sharing sites being compromised — the list goes on and on. You don’t have to be an IT expert to see that as more of your company design processes and data are moved to cloud-based tools, your company becomes more vulnerable. The potential of losing design data to a foreign company not subject to patent and intellectual property laws is a huge incentive to keep data off a public domain cloud. This is especially true when the cloud servers could be located in other countries. Prioritizing risk reduction over cost reduction. Several years ago, my discussions with senior management teams often started with, “Should we be moving to the cloud to cut IT and hardware costs?” Today those discussions often begin with someone asking, “How can we keep our software and data resources internal so we don’t get hacked?”

While advances in IT technology will likely overcome some of these issues in the long run, the trend toward companies being more guarded in how they manage their applications and data is clear. Given all the valid objections presented above, it is hard to envision a stampede toward a centralized cloud-based CAD environment.

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