Autodesk, NetSuite - chaos theory in action?

One of the imponderables about working with any cloud delivered service is just what it might add to an established business that could not have been predicted or foreseen. The combination of an established business, with well-defined product families, can still find itself having new business opportunities thrust upon it in a quite chaotic manner by its association with a cloud services provider.

This is certainly one of the side benefits seen by Ron Locklin, who is product manager for lifecycle management systems, at Autodesk. Now there is a company with a long track record, having been founded in the pre-IBM PC days of 1982 with the launch of its still extant first computer-aided design tool, AutoCAD.

Despite having extended the product family to cover media and entertainment – which has included providing design and rendering tools for some Harry Potter films amongst many others – plus tools to provide the simulation and analysis of product performance in real world situations, it has run the risk of becoming trapped as just ‘that CAD company’.

But the arrival of partnership two years’ ago with NetSuite, coupled with the launch of a new Product Lifecycle Management system, PLM360, has in Lochlin’s view opened up significant new markets for both companies that go well beyond the established markets for either side.

Right fit

There is, of course, an obvious complementary fit between a CAD toolset and an ERP system – one manages the design of something and the other manages its appearance as a reality. So Autodesk had spent some time talking to other ERP vendors about potential partnerships. But the company had realised that none of them were the right fit.

The company realised that what they were looking for was a cloud component and it was Netsuite’s cloud focus that fitted them best. According to Lochlin the fit was good enough from the onset that the two companies were soon talking about a close alliance rather than just a loose relationship.

Autodesk has built up an extensive and very successful third party channel, and did start out thinking that this experience would make a cloud alliance an easy fit. In practice they have come to realise that the cloud business model is subtly different, being far more partner based. This has meant that Autodesk faced something of a steep learning curve.

It has proved worthwhile, however, in that the company has now moved into selling cloud-based services both direct to its customer base and through its channel.

The opposite is also true, in that the alliance means that NetSuite can now be the prime seller of integrated life cycle management and design capabilities to its own client base when it finds that a customer has a need to expand its capabilities that area.

As the Autodesk product line has expanded widely beyond the traditional areas of mechanical and civil engineering and into areas of creative design, video rendering and animation, mapping directly onto some of the specialist market sectors already targeted by Netsuite, the opportunities for such cross-fertilisation between the two product product families has started to grow.

And Autodesk’s marketplace is also changing, even for existing products such as PLM360, says Locklin:

We are finding the life cycles managed on PLM 360 are getting shorter and the lines of demarcation are starting to blur between the technical/engineering side and the business software people. The partnership with NetSuite makes this easier to address.

Partnering with partners partners

The relationship has also demonstrated the way the cloud market partnership process is developing, where 'the partner of my partner is also my partner’. Autodesk has had Jitterbit as in integration partner for some time, using its tools as the basis of PLM 360 Connect for integration with a wide range of third party applications and services.

Having worked with it as a core part of the Autodesk partnership, the relationship has now spread to NetSuite, which has also formed its own partnership with Jitterbit. It is now being used to provide NetSuite users with connections to over 250 applications. This was formally launched at the recent SuiteWorld conference in San Jose.

For Locklin this is like cross-selling, where if a Netsuite customer wants PLM or an Autodesk customer wants cloud ERP, it is available as part of the solution each party is able to sell. But it has also served to widen the company’s horizons when it comes to not only what it sells, but how it sells. No product now stands in isolation without rubbing up against others in some way.

Knowing where to point potential customers for complementary suppliers is becoming an important tool now, says Locklin:

We have found that we now need to know who to suggest as answers when customers are asking about other applications. We never needed to know this before.

Given the long track record of Autodesk this does raise the question of corporate culture and the company’s ability to adapt to `the new’ that cloud delivered services represents. It is many leagues removed from its traditional world of the large, stand-alone, business-critical, on-premise application. Locklin explains:

Culturally it has been pretty easy to adapt to the partnership. In practice the company has a culture of not being trapped by old ways. We have a saying in the company: ‘break glass when you need to, and don’t follow rules unless you have to’.

The alliance is also opening up new market opportunities for both parties, especially in locations where manufacturing capabilities are picking up. Locklin sees geographic expansion as the company’s next big target, especially with the lifecycle management tools, but also looking at its core market of designing physical products of all types. This is still a very big market for the company.

It is also a market where the addition of NetSuite’s ERP and its established manufacturing suite could play an important role in winning contracts. Locklin is particularly attracted to the potential of the contract electronic manufacturers – the companies that actually put together, and often design as well, the laptop computers, smartphones, tablets, hi fi systems and a wide range of other devices for all the major brand names that are so familiar:

This is our most successful alliance ever. It is opening up new opportunities for both companies that we would not have targeted or foreseen. It is a bit like chaos theory: things just pop up.

My take

That last sentence by Lochlin shows both the cloud’s big strength and big weakness. It can – and does – open up new market opportunities that vendors might never have thought of addressing, while at the same time can currently provide no mechanism through which such market potential can be assessed and quantified with any more trust and certainty than a dampened finger held aloft in the breeze makes for good weather forecasting.

Disclosure - at time of writing, NetSuite is a premier partner of diginomica.