At the beginning of 1999, Autodesk bestrode the land as the fourth-largest software company in the world, the maker of the industry's leading computer-aided drafting software, and even the target of possible antitrust action by the U.S. Justice Department. But by the end of that year, sales had fallen dramatically, several crucial executives had departed, and the company had cut 350 employees. What happened? The Internet.

Where do we go from here?

Several analysts believe the slump stemmed from Autodesk's inability to morph its business structure and offerings to the demands of the Internet age. The company improved web features for many of its software packages, and in June 1999 formed Autodesk Ventures, an in-house R&D agency for web enterprises. Autodesk Ventures has already hatched one firm, Buzzsaw.com, which handles business-to-business concerns for the construction industry. It has also developed a business-to-business portal that enables construction project participants to work together in virtual space, collaborating and accessing manuals and reference materials through one portal. OnSite, which integrates corporate information systems and mobile tasks, was introduced in May 2000. It enables maps and designs to be viewed on handheld devices, fostering communication between corporate databases and mobile workers.

Autodesk - working on the drawing board of success

Today, more than four million architects, engineers, and construction clients use AutoCAD's 3-D features to create models and plans for their buildings, bridges, vehicles, and ground plans. Much of AutoCAD's success, like that of Microsoft, came from the dominance of a particular file format. While Microsoft capitalized on DOS to transform itself into an industry titan, AutoCAD saves its files in a format it doesn't share with competitors. Thus, if an architect designs a building using AutoCAD, the engineer who builds the structure must use AutoCAD to open and read the plans. Revising this format slightly every time it issues a new release of the software, Autodesk prevents other companies from cracking the code.

By installing more than 600 AutoCAD licenses at a university in Great Britain, Autodesk is making their software available to 12,000 students studying electrical engineering, architecture, landscape architecture, geography, archeaology, and a large range of other subjects. Thus, the next generation of CAD users will be familiarized with the AutoCAD system, and hopefully remain loyal to it.

Never let go, Jack

Sales of AutoCAD have leveled off, and today the product accounts for about half of the company's revenues, compared to 80 to 90 percent five years ago. The company has developed or bought geographic information systems, mapping, and special effects applications to pad its income. In 1999, for example, Autodesk paid $520 million for Discreet Logic, a Canadian special effects firm that helped create, among other films, Titanic.

Mainframe memories

Founded in 1982, Autodesk gained early success with the introduction of the first computer-aided drafting program written not for mainframes but for PCs. The company then rode the PC boom to continuing success. Autodesk went public in 1985 and acquired interior decorating software developer Creative Imaging Technologies a year later. In 1997, the company released its home improvement software line, Picture This Home, and acquired rival CAD software developer Softdesk for $90 million.

Sell-offs and upstarts

In 1998, the Softdesk deal attracted the attention of government regulators, who began investigating Autodesk for antitrust violations. In response, Autodesk agreed to sell off to a much smaller rival a new CAD program that Softdesk had been developing. That rival has, however, now created an alliance of Autodesk competitors who are pressuring Autodesk to divulge the secret to its AutoCAD formats while also attempting to crack the code themselves through reverse engineering.

The World Wide Web awaits

Autodesk has been working hard to expand both nationally and worldwide, relying heavily on the Internet to do both. In February 2000 the company launched web sites in Malaysia and Singapore, seeking to bring products to those markets and thus increase e-commerce revenues. Germany is home to another new online Autodesk store, following web sites launched in Ireland and England. Autodesk has an agreement with an e-commerce outsourcing company to expand online sales in Europe, the Middle East, and Africa. The company's flagship product, AutoCAD, is now available online, and is only the first part of the Autodesk software line that will be sold over the Internet. The excitement over online expansion must be tempered with caution, as the company discovered in February 2000 when a rival site turned out to be using Autodesk software illegally. Legal action was met with a threat of a digital attack, which led Autodesk to abandon the lawsuit.

Back on its feet

The company's come a long way since the days of financial trouble and layoffs it experienced late last century. Helping Autodesk's fortunes is its new Inventor software, which facilitates engineering, design, and drafting in 3-D. The product is being touted as the future of 3-D design, which saves approximately 40 to 50 percent of the user's time as compared to conventional two-dimensional drawing. Inventor is predicted to become the new industry standard, leading Autodesk away from its dependence on AutoCAD.