OCT. 17, 2007 • Autodesk was founded in 1982 by John Walker in Marin County, Calif. On a corporate level Autodesk is one of the largest U.S. based software solution companies in the world with total revenue of $1.8 billion in 2007. Carl Bass, the current President and CEO of the company, took over in 2006 from Carol Bartz who remains the Executive Chairman. Marc Petit is the Senior VP of the company’s Media and Entertainment Division.
Ten years ago, the total net revenue for Autodesk was $497 million and the longer term goal of the company was to someday reach the $1 billion market. With that now well accomplished, one of Autodesk’s stra- tegic goals is to expand 3D usage across all of the company’s product lines. There- fore we can expect to see more integra- tion and streamlining among their current tools. Autodesk has also been aggressive about expanding through acquisitions and therefore we would not be surprised to see activity on that front.
Autodesk is made up of two key divisions, the Design Solutions Segment and the Media and Entertainment Segment. Autodesk’s Design Solutions Segment makes up a large portion of the company’s overall revenues and includes a number of groups: 1) Platform Solutions and Emerg- ing Business Division, 2) Architecture, Engineering and Construction Division, and 3) Manufacturing Division.
Autodesk’s Media and Entertainment Segment is based in Montreal, Canada and focuses on game development, film and visual effects, broadcast and design visualization for automotive, architectural and consumer goods. The products in this seg- ment include animation packages 3ds Max and Maya, Motion Builder for previsualization, Human IK for character animation, and Autodesk Viz an animation package for visualization. FBX also falls under the Media and Entertainment Segment and is a widely used 3D universal file exchange format. On the film and visual effects side the products include systems like Inferno, Flint, and Flame which are high-end ef- fects and editing solutions. These products are primarily system-based solutions and although they have been tightly integrated on UNIX in the past, the company has moved away from SGI systems for the more open-platform Linux-based systems.
The Media and Entertainment Division has built itself up since the late 1990s thanks to several significant acquisitions. The first was Discreet Logic which it acquired back in March 1999 for $520 million. A Canadian company based in Montreal, Discreet Logic was already a well established solution provider to the film and visual effects industry. More recently the company acquired Alias in January 2006 for $197 million. In August 2007, Autodesk acquired Skymatter for an undisclosed amount.
Initially the Alias acquisition had many in the industry up in arms due to the competitive nature of the two companies. However, there has been a smoothing affect and most seem comfortable with the idea of 3ds Max and Alias’ Maya being under one roof now. Aside from the prestige that Maya brings, Autodesk had a number of reasons to add Alias into their product line and there appears to be more growth of new users and higher subscription revenue from its acquisition of Maya and Alias Studio, than with 3ds Max. There are also several other products that make up the segment’s 3D product suite including Motion Builder and FBX that came from Alias’ acquisition of Kaydara back in 2004. FBX provides the file exchange that allows 3ds Max, Maya and a number of other 3D packages to exchange data which is critical for game developers. Apart from these products, there was also interest in Alias Studio a software package that is used by a large percentage of designers in the automotive industry to do early stage designs on new car concepts. The newest addition to the product line includes Mudbox a 3D brush-based modeling package that will be integrated into the 3ds Max and Maya pipeline.
Since its launch, 3ds Max has had an enormous impact on the 3D animation market. Originally priced much lower than some of its earliest animation counterparts who’s products ranged anywhere from $10,000 to $45,000, 3ds Max was quickly viewed as the attainable entry-level solution for digital media professionals. Since game developers had more budget constraints than film or visual effects artists, 3ds Max soon became the standard package used for game development. It’s open architecture and early support of third-party vendors has enabled the product to build up hundreds of plug-in products for more specialized functionality.
Maya is the other dominant animation package and has been around for years. Initially a higher-priced product than 3ds Max, Maya became known as the Porsche of 3D animation being used by the top-tier game developers and film studios. Up until the acquisition, there had been a battle between the 3ds Max and Maya communities for dominance. There have been some game studios that have been just a 3ds Max shop and some that have only used Maya, but really these two packages can work well together in a studio, as each has its core strengths. Combined over 80% of game developers use either 3ds Max and/or Maya. This is not to say that game developers exclusively use only 3ds Max or Maya, but the majority of the industry is using one or the other of these two tools.
For Autodesk the marriage of these two products means being able to finally curtail the need for poll positioning. Instead the company can now focus on some of the larger-scale issues facing the entertainment industry such as performance and pipeline bottlenecks. In the future we should expect Autodesk to announce new tools for conceptual design as well as more solutions in the way of middleware.
DFC Intelligence recently sat down with Marc Petit, the Senior VP of the Media & Entertainment Division at Autodesk for an update on what the company has been up to.
DFC: Can you give an overview of where things are at since the acquisition of Alias? How has that been going? How has the integration with Max and Maya gone and what are you seeing now that some time has passed and both products in the pipeline?
Marc: We’ve been at it now for a little over a year and it is fair to say the integration is complete, for quite some time actually. We took a very rapid approach to the issue of integration and fortunately both companies were very culturally compatible.
We knew what we wanted to do with the products and things have worked well. None of our hypothesis when we went into the acquisition provided to be wrong. Our investment thesis was quite right in fact. We saw a lot of acceleration of growth into the business by combining the two companies. It changes our position to the industry.
We now talk to the big customers more as a partner than as a vendor. A lot of the time and energy that was spent impersonating each other is now spent adding value to the customers.
The nature of our relationship with big customers has changed dramatically. Now we are selling them more services and we bring them more value. That has also allowed our business to grow significantly. It is actually going well and more energy can go into developing new products and addressing problems in the industry that have been ignored.
DFC: Like what kind of problems?
Marc: Without getting too specific, one of the biggest problems I see personally in the market right now is the lack of conceptual design tools. It is a lack of tools that allow you to understand what your content looks like ahead of time – a footprint for content. There is currently no digital prototyping for digital content.
The manufacturing industry is good at building digital prototypes before they actually manufacture the product. In the media and entertainment space we tend to figure things out on the manufacturing line.
DFC: So like pre-visualization?
Marc: Pre-visualization is more to do with how to visualize an actual effect. This is more about new ways of doing story development, editorial – the whole thing, game play and conceptual design. I think that is a space where we can make a huge difference.
DFC: How do you see that playing out? Will that include new products wrapped around FBX?
Marc: FBX plays a key role because FBX is the link that allows assets and metadata to flow between our products. If you think of a conceptual design solution and a manufacturing design solution, it is actually great to have bi-directional communications between the two. So yes, FBX is at the heart of the strategy there.
DFC: So there will be new products announced then?
Marc: Yes.
DFC: So this idea of conceptual design, I know from the manufacturing side they are doing a good job at coming up with solutions for collaboration. From what I see that seems to still be a key void in the games space, getting a tool that does provide for easy collaboration.
Marc: I truly agree with you. But as I said, that is a space where our industry is not as advanced as other industries. So if you look at the maturation curve we are pretty early in process. You need to set the foundation to build upon, you need a data foundation and that is what we are trying to do with FBX.
Then you need the conceptual design tools. Then, once you can author the content and throw it down the pipe, then you have enabled and you can start servicing the collaboration needs. After that you can address things like budgeting, costing, tracking. All of these things are very important but are completely neglected today.
Big 3D effects companies still manage a lot of things from Excel. They don’t have any data or metadata. The way the shots are produced is not well understood or automated. You have databases and a bunch of things happening there. The whole articulation with the producers and the rest of the world is not as advanced as in other industries.
As you very well pointed out, at Autodesk we understand those other industries very well. The making of a building or the making of a consumer product like a car or a phone that are designed in the West but outsourced for manufacturing in the East are models that are well understood. We are actually taking that knowledge into account on a constant basis.
DFC: We have been interviewing a lot of Autodesk people on the manufacturing side as well. There are definitely a lot of interesting things going on in the manufacturing space right now. It is interesting to see that Autodesk is planning out strategies in terms of their file formats and my understanding is that FBX will be a major component in that strategy.
Marc: I would qualify that as a fair statement, as a fair guess.
DFC: What about the Human IK? How is that going?
Marc: That is a good question. It is another part of our ongoing research. Just to close the loop on the previous topic. When you want to do conceptual design there is one element that is critical and that is to do things in real-time, and provide real-time feedback for the creative decision-maker.
It happens that the games people and the games industry are the ones developing that real-time technology. That is why we see a lot of cross-leverage between what we see happening in games and how it can service the film and commercial pipeline. So for us having a deep understand of what is happening in the games allows us to better service the film and television markets.
The other aspect that is interesting about games, as exemplified by Human IK, is that we can help streamline the tool chain. That is the base of the success of Human IK because Human IK will allow you to have in a game, high-fidelity playback of all the sophisticated functions that you have in Motion Builder and Maya. A company like EA has adopted H-IK for 50% of their revenue.
DFC: What does that mean?
Marc: So the 20 titles that generate 50% of the revenue at Electronic Arts are the titles that use Human IK. It has been adopted very widely be Electronic Arts, which means that that company has seen a lot of value of that technology.
DFC: How long have they been using it for?
Marc: They have been on it for quite some time – so the 2007 sports product line. Ubisoft has been using it and several other companies that have not been announced yet that are putting it into their pipeline now.
So what is interesting about Human IK is that it brings the sophistication of our animation tools into the game engine and it has two benefits. One is it that they are sophisticated and the results of years of development in character animation.
And by the virtue of being identical to what is in the authoring tool it streamlines the tool chain completely. To author in Maya or Motion Builder, place the metadata into FBX, where it goes into the engine and plays back with 100% fidelity, no programming required. That is what makes a huge difference to the customers because those programmers are the expensive part of the pipeline. Now you get the “what you see is what you get” effect. When you author in Maya or Motion Builder, you have a guarantee that it will look exactly the same in your game. Even after you have your AI and animation engine mess around with the blending, by running the H-IK pass at the end you are actually re-conforming the animation to its original qualities.
And you could see that where we have been successful doing this for a standard rig, or a subset of the animation capabilities of Maya, we could extend that to more of the capabilities of Maya. So down the line you could think about having more of the authoring algorithms and sophisticated animation capabilities available at run time. That is definitely an important direction for us. And with the pressure that is happening in the pipeline we see an appetite for this streamlining.
DFC: What is the base cost for Human IK?
Marc: I don’t think we share that information. It is a middleware business model, so it is licensed per title.
DFC: Do you see a lot of Autodesk’s new products coming out as being more on the middleware side of things?
Marc: With an organization of our size we have several strategies for development and middleware is one of them. Look at what we’ve done with Human IK, providing the ability to take high-quality animation features from the authoring environment all the way straight to the game, with a stream-lined workflow. I think you can expect us to do more of that.
DFC: How are you finding the next-generation platforms as far as developing, going back to the pipeline issues? I know Insomniac is working extensively in Maya for PS3 development. How are you finding these platforms to develop tools for?
Marc: Just like everyone else in the industry, we are finding it hard. Those new computing platforms are very hard to leverage. Because these platforms are starving for memory, it forces very high level code integration. It is not like you can run physics and graphics on different cores, or SPUs. You actually need to have your graphics run on all the cores and then you need to have your physics run on all the cores and have your Human IK run on all the cores. That is a huge engineering challenge for the entire industry, including us. And we are investing massively there because tomorrow morning when we have even a 64-bit machine that has 50 cores and 8 Gigs of memory we are still going to have the same problem. The amount of memory and access to memory might well be the bottleneck.
So we view multi-core, multi-processing, multi-threading as being very important core competencies for any software company in the future, and you will have to be good at it – in every market.
It is interesting to start cracking the PS3 today, because you will be able to reapply to PCs. Intel has already demonstrated 50 cores recently. That is going to be hard. So there is a big disruption coming there soon.
DFC: Is there anything you want to add with regard to what Autodesk is doing in the games space.
Marc: Maybe I can summarize our position. Asset creation is very important and where we have a core competency. We believe there is an opportunity to be ahead of the curve to provide better conceptual design tools for film, television and games. At the same time we believe we can take our technology farther down the path more toward the engine to help streamline the production pipeline for interactive content should it be casual games or AAA games and that is what we are trying to get with middleware.
If we are successful at continuing to deliver to the industry the best asset creation tools, starting to deliver the best conceptual design tools and enabling out-of-thebox runtime opportunity I think we will have very powerful tools for our customers. That is really what we are trying to do here.
