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Commentary: Apple now Rich – Should it Buy Autodesk?

Well…technically this is just a cash thing. But even by that measure that is an impressive feat for a company that was struggling for its very life just 11 years ago. With its recent record quarterly profits Apple now has more than $25.5 billion in cash, more than Microsoft.

You gotta love the irony of this situation. Especially if you remember what Dell CEO and Founder, Michael Dell, said about a 11 years ago. He said Apple should just give up! Have a big fire sale and give all the money back to its shareholders. With Apple’s growing treasure of cash assets now exceeding $25 billion people are now speculating what companies Apple should acquire.

The Standard has a good article here. Of all the companies it mentions that Apple should buy the one I would agree makes the best sense is Nvidia. The graphics chip maker could be bought six times over with Apple’s available cash. Once more, Nvidia has been delivering superb new GPU and related technologies for the past few years, its CUDA architecture is of particular note. With Nvidia in Apple’s hands the geniuses within its PA Semi acquisition and the geniuses within Nvidia could do magical things together. It’s truly exciting to think about!

But There’s More…

I’ve been writing about specific acquisitions this past year that make sense strategically for protecting and growing Apple’s “Creatives” market. Specifically I’ve put out the notion that Apple should possibly buy Nemetschek AG of Germany as a solid AEC industry play. I’ve also written about a Gehry Technolgies buy. Both are interesting for a variety of reasons. And both would excite the AEC (architecture/engineering/construction) market and its millions of users.

So in light of that it’s interesting to see somebody outside of the CAD press discuss the idea that Apple should buy Autodesk. But that is just what David Morgenstern of ZDNet did today. Yes…it seems Apple’s big cash numbers have gotten the speculation engines oh-running. I can hear them churning across the blogosphere. The CAD blogs and press will no doubt pick up on this. It is always interesting when the general press catches up to what some of us in the CAD press have been saying.

Personally I’m not sure buying Autodesk would be a brilliant move for Apple. They would pay a premium for some de-facto industry standard apps that are in truth fairly mediocre at best. In time such apps will die-out. On the other hand, Morgenstern is correct is stating that  Apple’s approach to its customers is similar to Apple’s. This was the point I was making earlier in the year.

Would an Apple-Autodesk or Apple-Nvidia acquisition make sense to you? Login and share you thoughts below.

Reader Comments

  1. Posted by:
    October 26, 2008 07:29 am EDT

    Maxtor (cinema), Nemetschek (vectorworks) and Unigraphics would make more sense since they all have an interest in Apple Mac OS X.
    Autodesk has left the Mac OS world a few years ago and does not make a very innovative impression on me.

  2. Posted by:
    October 26, 2008 09:34 am EDT

    This is a very interesting proposition as it is my belief that Autodesk’s termination of ‘AutoCAD for the Mac’ single handedly led to the demise of Apple some 15 to 20 years ago. Just about every Mac based architecture & engineering firm that was using AutoCAD switched to Windows. That was an incredible exodus from the Mac platform.

  3. There are really two separate elements to this. One is that Autodesk is buying up many of the most innovative design-app companies serving a huge segment of the “creatives” market Apple is supposed to be the king of — both from the software side but most importantly from the Mac hardware (platform) side. And two, that those like Morgenstern see Apple having “massive platform growth” potential by acquiring Autodesk and its massive portfolio of software tools.

    I think the former issue is most important. Apple doesn’t need Autodesk per se to grow. But they do need access to all those innovative companies and software makers that Autodesk is so keen on acquiring. If Autodesk buys Mac developers and kills the mac versions then that is real trouble for Apple. When I look at what’s happened to MotionBuilder, Maya and now some concern for RealVIZ’s apps I get a real chill down my spine.

    On the other hand, a hopeful side of me says that perhaps this is Autodesk’s way of entering the Mac design-app market? In fact, they once made that suggestion — that they are now a Mac developer.

    Softimage is the latest buy for Autodesk. It didn’t make a Mac version so one understandably doesn’t expect one now. On the other hand, what Autodesk does to its other Mac apps in terms of their development says mountains-full of how they view Apple and its thriving Mac platform.

  4. Posted by:
    October 28, 2008 08:52 pm EDT

    REVIT is owned by Autodesk – is it not.
    If Apple are chasing 3D design and documentation app – do you think they would want REVIT.
    When I first saw REVIT by its original English developer, I thought it was quite impressive,
    However when I saw it again later when owned by Autodesk, it seemed to have gone backward in terms of ease of use.
    surely CATIA , ARCHICAD or BoA are better options?

  5. Posted by:
    October 28, 2008 10:07 pm EDT

    The problem is Mac based CAD can’t compete with Autodesks products (in an aggressive way, leading to a higher market share) since architects don’t want to try something new and step out of their comfort zone. They will stick to autocad and maybe move on to revit, only because it’s made by the same company.

    I’d like to see Apple purchase autodesk, but i’m worried that they might let certain apps stagnate (Shake comes to mind… still waiting on its successor: “Phenomenon”). Also I’d hate to see current Mac based CAD developers go under, they have been good to us.

    Also if Apple did purchase Autodesk they would have to diversify their product portfolio and include more economical and extreme high end machines (at lower prices too). I can’t see studios paying premiums for a Mac (ok even if the cost of ownership is lower) and they might move on to other software.

  6. Posted by:
    November 16, 2008 05:30 pm EST

    Autodesk at any price isn’t worth it, if Apple starts to take cad seriously a small to medium size software company, ie.. Powercadd, Vectorworks, Archicad would be the best cad software companies to buy.

  7. Interesting that Ralph over at WorldCADAccess is trying to figure out what PTC is worth and says that at just over $1.25 billion Autodesk could buy it and have a serious rival to Solidworks. With $25.5 billion Apple could buy all of Autodesk’s rivals combined and still have billions left over. Or as as Morgenstern suggest buy Autodesk itself.

  8. Posted by:
    Tim Olson
    November 18, 2008 05:15 pm EST

    Apple buying AutoDesk does not seem consistent with their current successes: put an innovative user interface on quality consumer devices.

    Historically, Apple does not seem to acquire much, buy back stock, or pay dividends. Listening in on their recent earnings call, they seemed to hint they plan to invest in R&D. Jobs perked up when one industry analysts suggested that he could hire all the available engineers in Silicon Valley with his excess cash. The CFO also seemed to suggest they were on a mission to reduce manufacturing costs to address pricing pressure from competitors.

    One consumer device that Apple has not faired well with is Apple TV. Yet it seems to be a key hub for informational content with tons of potential. If Apple were to spend some of its cash on an acquisition, maybe a purchase of TiVo would now make sense.

  9. karidogramm,

    Your comment that Mac CAD can’t compete with Autodesk products because architects will not step outside of their comfort zone is most unfortunate if true. The reality is this industry is filled with innovation — from Siemens’ Synchronous Technology and Parasolid, to Graphisoft’s “original BIM” in ArchiCAD to Google’s SketchUp. Innovation does not just exist within the corporate halls of Autodesk. And it is high time industry professionals wake up and smell the coffee!

    Stagnation around de facto methods, tools, processes and technology is what got Detroit’s Big Three into so much trouble. Surely yes, there is excellent innovation at Autodesk — a lot of it existed in companies they acquired (think Alias for example). But if what you are saying is Mac CAD doesn’t stand a chance because architects will only embrace that which they know (AutoCAD and Autodesk) I would disagree.

    They already proved they would when they embraced @Last Software’s SketchUp.

  10. Posted by:
    May 20, 2009 07:31 pm EDT

    I work with AutoCAD Architecture, Revit Architecture, ArchiCAD, VectorWorks, and SketchUp, and in my opinion, they are all very good programs. I disagree with the author when he says Autodesk’s programs are fairly mediocre. They are powerful and innovative. Revit and ArchiCAD are on a par with each other as are VectorWorks and AutoCAD. Be aware also that Autodesk has a broad range of products. They are big in the movie industry where some of their programs run on Macs.

    I am transitioning from AutoCAD and Revit to VectorWorks and ArchiCAD solely because I want to eventually work only on the Mac platform. I would love it if AutoCAD and Revit ran on Macs, and Apple buying Autodesk would bring that about. I doubt that Apple will though. Apple and Autodesk both have great in-house innovation (and they both buy outside expertise), but their cultures are different.

    Apple is great because it focuses on doing what it does better than anyone else, and they could lose that if they try to spread their magic too thin.

  11. To clarify…it was said that “some” Autodesk apps are mediocre. It was not said or implied that “all” are. I would very much agree that Autodesk has several ranges of excellent software applications. But not all are and the company has a tremendous amount of applications now. So the question is: what would Apple pay for those and would they not be paying a premium for some applications? In other words, could they get better some place else?

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