Software may be eating the world, but it’s also responsible for building it.
The leading firm in that space is Autodesk, which has seen its market cap jump from ~$14B to $65B over the past 5 years.
Engineers use Autodesk’s software to build slightly important infrastructure such as water treatment facilities, railways, airports, commercial buildings, and highways.
Autodesk has become a market leader thanks to 2 big bets
- A focus on higher education: Getting leading universities hooked on their certification program has ensured that up-and-coming engineers use their products as early in their career as possible (also, it’s become a ubiquitous
LinkedIn profile paddingCV booster). - A pivot to subscriptions: Making the transition from perpetual licenses to SaaS was a risky move that paid off — offering customers more flexibility and boosting cash flows.
The benefits of these moves have compounded, thanks to natural virality
Most construction projects require multiple partners that benefit from having a unified solution across all parties. That means if one contractor is using Autodesk, all of the partners follow suit.
This dynamic has helped Autodesk grow organically and increase lock-in across their customer base.
Autodesk faces a long list of competitors
As Netscape founder Jim Barksdale famously put it, “The only way to make money is bundling and unbundling.” While competitors go head-to-head against individual product lines, Autodesk is poised to offer a one-of-a-kind bundle going forward.
As a leading creator in 3D animation and construction, Autodesk has the AR/VR chops to become a critical building block of the metaverse.
Given the scrutiny that comes with more headlines, Autodesk is probably perfectly happy flying under the radar.
