'Pricing policy crucial for Autodesk's India market'

Ken Bado, executive vice-president, worldwide sales, Autodesk, does not believe in gushing over the company's first quarter revenues that touched the $1.84 billion mark in 2007. For Autodesk, a design software and digital solutions company, says Bado, it's just the beginning in India. Responsible for customised solutions in the building, manufacturing, infrastructure, media and entertainment industries, Bado has a strategy up his sleeves to grow the company's market share in the country in the next three years. The second-in-command at Autodesk talks to Priyanka Joshi about the company's strategies in the country. Excerpts:

Now that Autodesk has achieved the annual sales target, what's the way forward?

In November 2005, Autodesk redrew its strategic map for Asia and growing business in regions such as the Asia-Pacific topped the list. Adding a sales team in India this year is our immediate priority. We will also open Autodesk Centre of Excellence in various design schools and colleges. Similar centres are planned in institutes and universities across India, restricted not only to architecture, urban planning and construction management, but also to industrial design, manufacturing, civil engineering, animation and even special effects.

AutoCAD, which is rightfully Autodesk's bread and butter, is as widely adopted in India as it is in the United States. We think India is ready for a two-dimensional (2D) to three-dimensional (3D) conversion campaign. But unlike the US, the Indian campaign will take more than advocacy and education. Here, AutoCAD's biggest competition is pirated, cheaper copies. The 2D revenues and its installed base just keep growing, making it harder to make a meaningful impact on the 3D's installed base. Our 3D base, however, has lived up to or exceeded our expectations in a few regions.

To get to the inflection point (where 3D licences make significant gains on 2D), you see a need for 3D to be somewhere around 20 per cent. Do you think you can get that inflection point sooner in India?

It would be a tough proposition. Although the move to 3D means 5x-10x (more revenues) a customer, India may not be ready to make the switch yet.

Emerging countries are exploding, but remember that the switching or adoption costs are difficult to absorb for businesses and so there's a natural friction co-efficient. I would expect that 2D will stay healthy for a long time, going on double-digit growth. There are many cases, where 2D makes a lot of sense, automating the drafting and drawing process. But 3D will grow more quickly, though, and we are going to continue to get customers to move to 3D, and probably double the rate of 2D. Emerging markets such as Eastern Europe, Latin America, China and India should contribute around 15 per cent of the company's revenues and that percentage is going to keep rising.

So would Autodesk consider cheaper product versions for India?

If you compare the price of the software to the value of the currency, it will look very expensive. A lot of Indian architects, with whom we correspond, seem really interested in the 3D softwares, provided the price is right. If the price is not right, buyers will bypass Autodesk and turn to India's thriving black market, where they can pick up AutoCAD or others for a fraction of the official price.

We will be looking to help the organisations in getting what they want and at a price that won't kill them. Autodesk's India pricing policy will play an important role in curbing our losses from the grey market. If the price is right, even the pirates can be recruited.

Is channel expansion in India going to be a key objective of Autodesk in 2007?

Very much. Autodesk will expand its value-added resellers' (VARs) network to over 50 by the year-end. The process of identifying resellers in B and C class cities is already on. We have close to 20 VARs now and will be appointing another 30 soon. The selected VARs will undergo induction programme, including product, sales and technical training. The two most important focus areas for Autodesk are to expand its penetration in newer territories such as Coimbatore, Ahmedabad, Indore, Jaipur, Chandigarh, Nagpur, Vishakapatnam, Trichy, Kochi, Pune, Nashik, Lucknow and Jalandhar, among others. These zones have recorded significant growth in terms of animation, gaming and design visualisation.

Almost 23 per cent of Autodesk's business comes from the Asia-Pacific. So how do you intend to grow this number?

We have outlined our vision for the Indian design industry, including a major update to our software portfolio, releasing advanced versions of its products across focus-industry segments that include the manufacturing, infrastructure and building industry, in that order. Our sales and marketing team will assist Indian manufacturers in enhancing productivity and reducing cost by the Digital Prototyping concept. It is an approach that uses 3D modelling and engineering data to visualise and analyse designs without making physical prototypes.

Autodesk is committed to providing companies with the most innovative 2D and 3D solutions. A move to digital prototyping will help manufacturers answer questions on products before starting to build them.