Autodesk, Inc. Discusses Strategic Transformations and AI Initiatives at Baird Global Consumer, Technology & Services Conference 2025

Key Takeaways

TL;DR: Autodesk detailed its near-complete transformation from a reseller-driven, 2-tier model to a direct agency model—driving improved rev. visibility and margin benefits. The co. is leveraging its cloud platform and industry clouds (Forma, Fusion, Flow) to expand TAM, while integrating AI through its robust API framework and customer data. This multi-year transformation is expected to boost growth through improved sales, margin efficiency, and deeper customer engagement.

• Biz Model Transformation & Go-To-Market Enhancements
  • Transition to New Transaction Model: Autodesk is moving away from a traditional 2-tier buy-sell (reseller-driven) model to a direct agency model.
    • Steve Blum explained, “we are now actually setting the price” with all quotes coming directly from Autodesk’s system, enhancing rev. recognition at list price.
    • The rollout began in Australia, then North America, Europe/U.K., and Japan, with the construction segment in North America switching this past Q.
  • Customer Experience Ownership: By shifting control of the transaction process, Autodesk gains precise customer data and improves self-service—and reduces reliance on noncontracted partners.
    • This leads to direct upselling oppt'ys via the Autodesk store that offer higher margins and lower commission costs.
• Financial Implications & Margin Impact
  • Rev. and Margin Effects:
    • Direct pricing leads to a mechanical increase in top-line rev. by eliminating discount structures traditionally absorbed by distribution partners.
    • Initial OP margin pressures from transitioning commission expenses to OpEx are expected to reverse over time as commission structures adjust and self-service gains scale.
  • Efficiency Gains:
    • Enhanced self-service abilities lower sales and marketing spend over time.
    • Improved efficiency in cloud compute (as noted with the AWS AI case study) and optimized G&A systems are targeted to eventually bolster EBIT margins closer to long-term goals.
• Industry Clouds & Platform Expansion
  • Industry Cloud Initiatives:
    • Autodesk is transitioning from selling discrete products (e.g., AutoCAD, Revit) to offering integrated industry clouds:
      • Forma (Architecture, Engineering & Construction – AEC)
      • Fusion (Manufacturing)
      • Flow (Media & Entertainment)
    • Simon Mays-Smith noted these initiatives will enable “connected data across workflows,” expanding TAM and providing incremental rev. oppt'ys.
  • Hybrid Customer Adoption:
    • While many large customers already view Autodesk as a platform and benefit from the connected ecosystem, smaller customers continue to use traditional offerings—supporting a dual model in the near term.
• AI Strategy & Data Leverage
  • API-First Strategy:
    • A modern, SaaS-based tech stack with API access is facilitating better data aggregation, essential for Autodesk’s AI initiatives.
    • Steve Blum emphasized that “having that access to data in the cloud is really what's enabling us to be innovative in the AI space.”
  • Dual AI Approach:
    • Productivity AI: For example, the AutoConstrain feature now shows a >50% recommendation acceptance rate among engineers, indicating clear margin and efficiency benefits.
    • Innovative AI Efforts: Autodesk is building foundation models leveraging the vast quantities of customer data collected from its cloud, despite challenges around data privacy and IP trust.
  • Competitive Advantage:
    • The scale of Autodesk’s cloud data outstrips that of competitors, giving it an edge in training robust AI models and delivering transformative customer insights.
• Customer Sentiment & Growth Signals
  • Customer Data & Feedback:
    • While there is some cooling in AI exuberance (as noted in the annual “State of Design and Make” survey), two-thirds of customers still believe in significant AI-driven industry disruption.
    • Autodesk’s expansion within existing accounts is the biggest growth lever; moving customers from 2D to 3D offerings (e.g., from AutoCAD to Revit) has proven to boost net retention towards the 100%-110% range.
  • Long Tail of Growth:
    • Continued adoption of the new transaction model alongside targeted expansion in verticals (e.g., construction and water solutions) is expected to drive incremental seat growth and higher rev. per subscription.

Overall, Autodesk’s transformation is positioned to deliver improved customer insights, direct rev. growth, and better margin expansion through a more efficient, data-rich platform approach, with AI and industry cloud initiatives underpinning long-term strategic growth.

Call Q&A

• Joseph Vruwink: Why is Autodesk changing its transaction model from a reseller-driven sales approach?
  • Steven Blum: Autodesk is moving from a 2-tier buy-sell model to an agency model to gain better visibility of customers, control the customer experience, and improve data fidelity for recommendations and AI use. This change allows Autodesk to own the customer experience and improve efficiency.
• Joseph Vruwink: What are the financial consequences of the transaction model change?
  • Steven Blum: The change allows Autodesk to set prices directly, leading to a mechanical increase in rev. Commissions are now paid through OpEx, impacting OP margins. Over time, this will be rev. positive, OP margin positive, and OP dollar positive. The online store benefits from higher margins as customers buy at list price without commissions.
• Joseph Vruwink: Is the transition from desktop software to cloud a significant transformation for Autodesk?
  • Steven Blum: The transition to industry clouds is significant but not a biz model transformation. Autodesk is moving from selling discrete products to industry clouds on Autodesk Platform Services, providing connected data across workflows and expanding TAM.
• Joseph Vruwink: How many customers use Autodesk as a platform company versus discrete product provider?
  • Steven Blum: It's a journey that will take time. Large customers see Autodesk as a platform provider, but smaller companies may not need all platform capabilities. The transition to platform-based approaches will grow as more value is added.
• Joseph Vruwink: How does Autodesk's API framework benefit its AI strategy?
  • Steven Blum: API access supports the platform move by making data extensible and connectable. Autodesk has been investing in AI for 10 years, focusing on productivity-enhancing AI and innovative AI models. Access to cloud data enables innovative AI development.
• Joseph Vruwink: Why did customer sentiment about AI move negatively in the recent survey?
  • Steven Blum: Last year's high expectations have settled into a more realistic view of AI's challenges and potential disruptions. While confidence in AI meeting goals dropped, most still believe AI will benefit industries, esp. in sustainability.