That was great. Good morning, good afternoon, good evening. Thank you for joining us today. We look forward to spending the day with you. My name is Abhay Lamba, and I'm VP of Investor Relations.
So glad you could join us today. We hope you and the loved ones are all safe. We have a great lineup to discuss our strategy and vision with you all. As you can see from the agenda, we will go into all aspects of our business. We're going to start with Andrew and then go into details of our business with other executives.
And finally, we'll end with Scott on financial update. We do have 2 breaks planned during the agenda, and we'll hope to give you a chance to just walk around, get some fresh air and then get back to our presentations. There will be a Q and A session at the end. Please enter your questions anytime during the webcast in the client or email them to me. The entire executive team will be there towards the end of the presentation to take your questions.
And now before I go into presentations, let me share our safe harbor statement with you. I'll let you read through it. Basically, we will make forward looking statements today that reflect our current expectations. They are not guarantee of future performance, and we disclaim any obligation to update or revise any forward looking comments. Now with that, let me hand it over to Andrew to kick us off.
Thank you.
Thanks, Abhay. Good morning and good afternoon, everyone. I'd like to add my welcome to our 1st virtual IR day. As we said on the earnings call, we've made changes at Autodesk to ensure all our employees are safely working from home. We've made adjustments to ensure that our customers are being supported during this work from home crisis as well.
But one thing I want to make sure that you all understand, COVID-nineteen has not changed anything significantly for Autodesk in terms of what we're trying to accomplish over the long term. Everything we've done in the past 3 years has prepared our business for the realities we're going to be facing in the future. Moving to the cloud, shifting our business to recurring and delivering products and platforms that enable distributed workforces to collaborate on data driven solutions that create impact. And to get a good sense of this, why don't we go back 3 years ago and talk about some of the things I laid out in the 1st Investor Day I did as CEO. And some of you might recall, I talked about this notion of 5 years and 5 outcomes.
I want to revisit some of these, close out a few of them and actually set some of the other ones up for a new interpretation. So first off, let's start with the 2 that have essentially moved into a totally different phase. The subscription transition is now over. We're not going to really be talking about it in the same sense we were before. We're going to move on to other drivers of our business and other important factors that are going to create a long term opportunity for Autodesk.
We've also invested significantly in the areas of digitizing the company. Now those investments are going to persist and we're going to continue to work on digitizing the company internally. But as we move forward, we're going to talk a lot more about the outcomes and the impacts of our business model and a lot less about the initiative of digitization, which brings me to the 3 other outcomes I talked about 3 years ago. One of them was all about automating the process of design and manufacturing, the convergence of construction and manufacturing to a new paradigm and driving BIM through the entire design and make process. These trends are going to show up again and again over the next few years.
I'm going to recast them a little bit for this presentation, but my main focus moving forward is going to be on these big drivers of our business. But I just want you to look at these and recognize that the things we talked about 3 years ago, 5 years ago are absolutely the things that are important today. And also as we go back 3 years, let's take a look at how we did. On the left is all the things that we said we were going to do at our fiscal 'seventeen Investor Day. I want to now compare the actual outcomes with what we said we were going to do.
First, we said we're going to deliver $3,300,000,000 in ARR. We delivered 3,400,000,000 in ARR. We said back then we were going to deliver 5,400,000 subscriptions at a CAGR of roughly 3%. Now over the time period, we talked about consolidation and the elimination of some low cost subscriptions and we told you we were going to deliver through subscriptions higher CAGR, that's exactly what we did. We delivered 4,900,000 subscriptions at a CAGR of 6%.
Now again, 3 years ago, we said we were going to deliver a 33% operating margin and $1,400,000,000 in free cash flow. Now over the period between that FY 'seventeen and FY 'twenty, we told you we were also going to reinvest some of that money in strategic priorities and we were going to do targeted divestments of businesses that we felt were no longer important to our guests. So we actually took revenue out of the company and told you we were going to modify that to a 25% roughly operating margin and $1,360,000,000 in free cash flow. So you can see, we did what we said we were going to do. We delivered strong margin growth.
We delivered strong free cash flow growth. And what we did is we did it in a journey that looks very similar to what we said we were going to do. So this is the curve that we presented 3 years ago in terms of what the journey was going to look like. And here's what actually happened. Now the trough was a little deeper than we thought and a little wider, but you can see essentially over a multi year period, we were able to navigate the business to an incredibly large ramp up in free cash flow and a terminal state that's over 96% recurring.
Pretty impressive outcome and this really declares clearly that the subscription transition is over and I want to make sure that we all appreciate that. We're moving on to other important business drivers that are going to be creating opportunity and long term growth for Autodesk, which brings us to this next point. Why will we deliver in FY 'twenty three and beyond? And I want to take a look at a couple of factors that are going to help you understand exactly why we're going to deliver. First off, we have a much greater ability to forecast our business over a multi year timeframe than we did before.
The complexity of the business model transition is gone. We understand our business to very high fidelity. We were able to project our business over a long period of time 3 years ago, but we're even better at it now. And I want to make sure that you understand and have that confidence and our ability to forecast our business out. The ability to adapt and be agile over the multi year period that we were working through over the last 3 years, we had to change and adapt as the business conditions and our understanding of the business model transition change.
That core capability is still inside the company. Just look at how the company responded to the COVID-nineteen crisis. We adapted quickly, we moved casually and we maintained not only business continuity, but we maintained our ability to secure the opportunities that were in front of Autodesk. We also have a lot of confidence in our long term growth drivers, which is the bucket that we're going to spend a lot of time on today, looking at these long term growth drivers and how they affect our business over a multiyear timeframe. And if we look out to FY 'twenty three, these are the kind of targets we're pursuing.
We're looking at a revenue CAGR between 16% 8% over the next 3 years. We're looking to deliver $2,400,000,000 in free cash flow, an operating margin of approximately 4%, and we're going to continue to balance revenue growth and free cash flow margin between this band of 55% to 65%. And I told you that's how we manage the company. We are confident in these targets if we start to see a recovery in this fiscal year. So we remain confident with these targets.
So where is this growth going to come from? What are the incremental drivers of growth? Now to kind of give you some context, I want to look at 3 big drivers that are going to contribute to the company's growth to FY 'twenty three and beyond. 1 is the monetizing of non compliance and legacy users. That's going to continue to be the gift that keeps on giving for multiple years.
The second is the accelerating digitization in AEC. It was already happening before. After this current crisis, it's only going to pick up speed. Our customers understand what they need to do here and they know competitiveness depends on their ability to digitize. And the last one is the convergence of design and make in manufacturing where we believe we have a really strong leadership position.
Now to give you a bit of a sense for how these various factors are going to contribute to the incremental growth over the next few years, we prepared this conceptual chart. So I ask you, do not try to measure anything off this. You will measure nothing, right? It is a conceptual chart to help you understand where the flow of incremental growth is coming from. And what this essentially tells you is that short term, you're going to see a lot of incremental growth driven by digitization in AEC.
But as time goes on, the contribution from digitization of AEC, while it continues to be a major growth area, gets smaller relative to what we're doing with non compliant users and over time, the growth in manufacturing. And you also see there's other things we're going to be doing in media and entertainment and with new business models that contribute incremental growth over time. So the reason I show you this is so you have confidence not just in the short term incremental growth drivers, but that there's long term incremental growth drivers driven in particularly around manufacturing that will maintain sustainable growth for Autodesk well beyond fiscal 'twenty three. So let me give you a quick summary of some of these before we go into specifics from the rest of the team. Monetizing non compliant and legacy users.
To start off, I want you to understand that we have a much deeper understanding of this user base than we've ever had before, particularly on the non compliant user side. We now understand them not only in terms of what releases they're back on, but also the frequency of usage they have relative to the releases they're on. And what we're able to do with this information is actually target a set of customers that have a high likelihood of being converted. 7,000,000 customers sitting up in that upper right box where they're from 7 to 5 releases back and use the software frequently. And from this information, we know to great fidelity that we have 2,000,000 targetable subscriptions within our current customer base.
Just this 2,000,000 could keep us busy for years. Like I showed you in the previous slide, there's still more opportunity to mine this space. But we've got enough right in front of us that will keep us focusing and growing this space over time. And to help you understand how we're going to get better at converting this pipeline, one of the things we're doing is we're hardening our systems and transitioning to named users. We're making it harder to pirate and we're doing everything on a named user basis.
I've also kind of alluded to the fact that we've got a deeper understanding and a deeper ability to target these customers than ever before. And we're going to be driving these capabilities into our partner network so that they can work just as effectively as we do to convert these customers from non compliant to paid subscribers, which brings me to the accelerating digitization in AEC. This is absolutely driven by a set of long term trends that are not going away around sustainability, around cloud collaboration, BIM mandates and what we would call now suburbanization, given what might happen with the post in the post COVID world with some people moving into urban centers, but some people moving away into suburban centers and all the infrastructure that has to connect that cloud and spoke ecosystem around city centers and suburban centers. To unlock this opportunity, we are incredibly well positioned to drive BIM through the entire design through make process. So, 1st area we're going to be concentrating on is an area that's still not fully penetrated and that's the 2 d to 3 d conversion opportunity inside the AEC base.
BIM is not yet fully adopted and we're going to continue to drive that adoption and we're going to continue to move the building information model deeper into the make process. Now we're going to continue to support the 2 d processes on the make side, on the construction side that are out there and prevalent. I want to remind all of you long term, the model is going to be the core communication vehicle for this entire process and the model will ultimately win over the long term in terms of digitization for all of our customers. And our customers know this digitization is required more than ever. This is an absolutely fantastic example.
This is from McCarthy Building Companies and they saved over $250,000 on a hospital upgrade using BIM 360 and Revit collaboratively in the cloud. We are seeing more and more customers engage with our solutions this way. In fact, over the last 6 months, BIM 360 active projects have nearly doubled with over 25,000 active projects added. In fact, we have over 100,000 monthly active users of BIM 360 design and that's up 82% year over year. So the way people are using our products is changing.
So these tools are seeing a lot of use, they're seeing a lot of adoption and customers are going to continue to invest in these areas to digitize their processes, which brings me to the convergence of design and manufacturing. Again, at a very high level, there are a lot of secular trends that are only going to get accelerated in this new era that are driving these long term changes. Supply chain reorganization, if it wasn't happening before, I can assure you it is going to move faster. The convergence of manufacturing construction, Everyone knows construction sites have to work differently. In a post COVID world, that change is only going to accelerate.
Process digitization, mass customization and the rise of smart products all require new types of design systems. And we've been building out a new type of design and make environment for years at Autodesk. This whole notion of shifting everything from a set of disparate and disconnected tools to a set of unified solutions built on top of a robust cloud platform that connects design through make for every discipline in the chain and does so in a very networked world. And the areas we are going to lead definitively here are in cloud data. We're already ahead.
We're going to continue to be ahead In integrated tools, they capture everything from design all the way through manufacturing and in generative design. We were the first to bring generative design up to the market. We've been the first to make it practical for going straight from design requirements to manufacturing requirements and you're going to continue to see us lead in that area. So that brings me back to these long term drivers. These are the things that are going to ensure that Autodesk has a growth opportunity out to FY 'twenty three and beyond.
These are the things that are front and center for the company, the monetization of the non compliant users, the acceleration of digitization in AEC and the convergence of design and make. And you know what, layered on top of all of this during this COVID-nineteen crisis is this notion of resilience. Our customers are worried about the resilience of their business and their ability to provide impact to their customers and help their customers be resilient and have resilient outcomes as well. And that's why Autodesk is going to continue to lead in enabling our customers to design sustainably through our cloud based tools and all the capability we're delivering to help them get insights from data. And we're going to continue to lead by example when it comes to environmental and social governance at the corporate level.
I want to give you a sense for some of the things we're doing in the ESG bucket. We're already moving to 100% renewable energy over the next 10 years as a company. We also invest in our people. We've recently made everyone an owner inside of Autodesk and we spend a lot of energy working on diversity and inclusion inside our workforce. In fact, our team has donated over 26,000 hours of their time as volunteers.
This is the kind of leadership we want to put forward in the ESG space so that we can be there for our customers and a model for them. That gives you a high level sense of where the growth is going to come from. And to dive a little deeper into the details, I'm going to have most of my team come up and take you through specific parts of the challenge and opportunity. So Lisa Campbell is going to start by talking about the size of the opportunity and where we're going to be getting sustainable growth. Jeff Kinder is going to come up and talk about our business model evolution.
Amy Bunzel is going to talk about all the compelling innovation in our core products that's going to encourage people that are non compliant or legacy to continue to upgrade and be current. Jim Lynch is going to give you a deep dive into our construction opportunity and some of the things we're doing. Scott Reese is going to help you understand deeper the opportunity in manufacturing. Steve is going to tell you how we continue to realign our sales force to exploit all the new opportunities that are in front of Autodesk. And Scott Heron will end with the numbers and drivers of growth to scale that help you understand how the business is evolving.
With that, I'd like to turn it over to Lisa Campbell. Lisa?
Thank you, Andrew, and good morning. Today, I want to talk to you about Autodesk's large growth opportunity. And I want to talk to you about that in 3 parts. 1st, I'm going to review the market opportunity through fiscal year 'twenty five and some of the trends driving that growth that Autodesk is poised to capitalize on. 2nd, I'll break down the opportunity and the drivers by industry and give specific examples of why we are winning.
And 3rd, I'll give you an update on the progress we are making in understanding our non compliant user base. So let's start off with the market opportunity. To understand the market opportunity, it's really important to look at some of the trends that are driving that. Now all of you know that we operate in 3 industries: architecture, engineering and construction, design and manufacturing, and media entertainment. And what's important to note here is that the lines between these industries are blurring, and you can see that with some of these different trends.
And I want to focus on a few of these trends. In AEC, suburbanization. Now historically, we've talked about urbanization, more and more people moving to cities every week, which created a huge demand for more buildings and more infrastructure. And while we expect that trend will continue, it's important to note that with the impact of COVID-nineteen, it could lead to a suburbanization trend instead, more people living outside of cities and working remotely. But either way, global population growth show no sign of slowing down, and there's going to be a need for more infrastructure to connect and support urban and suburban centers no matter which way this goes.
And in media and entertainment, the demands for more streaming and subscription services is driving the need for more efficient content production. And we haven't really talked about media and entertainment in the past, and I want to give you some more insights into that further in this presentation. Let me give you just a quick example of one of these trends and that's the convergence of manufacturing and construction processes. So in this particular example, Knopf is a company based in Germany and it's synonymous with Jimsohn. They are one of the world's leading manufacturers of building panels and building insulation.
Their mission is to become the market leading provider of innovative and sustainable systems and solutions for buildings. And what they are doing here as you can see is they're producing modular homes in a factory setting. They're using the product design and manufacturing collection as well as our AEC collection. What's really interesting is that they can construct these buildings in a fraction of the time with a fraction of the waste of traditional methods. So this is a great example of the intersection of our industries and the kind of innovations that are happening.
So those are the big industry trends. So what about our TAM? Last year, I talked about our TAM for Autodesk in terms of design and make, and I'm going to continue to do that. So in fiscal year 2021, the current year that we're in, our TAM is $52,000,000,000 We expect that TAM to grow to be almost $70,000,000,000 by fiscal year 'twenty five, a $69,000,000,000 TAM by FY 'twenty five. And by the way, one thing that I will point out here is that I am now including media and entertainment TAM as a part of these numbers and I didn't do that last year.
And if I break that TAM down into design and make, it's $40,000,000,000 in design $29,000,000,000 in make. In addition, we have a great growth opportunity in our non paying users. Now non paying includes non compliant users as well as legacy users. And our legacy users are those users that have fallen off of maintenance. Now you've heard us talk about that opportunity in the past, where we said that the non compliant opportunity was about $12,000,000 against occurring base of $5,000,000 So for every paying user, we have about 3 non paying users and that's why this is such a big opportunity for us.
So that's the drivers and the TAM. Let's go and talk about more details of each of the industries. And I'll do a click down into all three. So just as a reminder, again, architecture and engineering and construction, design and manufacturing, and media and entertainment. For each of these three industries, I'll give you a clip down on the market opportunity, the key growth drivers for each one of them and Autodesk's unique differentiators that is helping us to win in those industries.
And I'm going to start off with architecture, engineering and construction. So if I break down that $69,000,000,000 TAM, dollars 31,000,000,000 is in design and construction. So that's the AEC part of this TAM, again, through FY 'twenty five. And that serves 31,000,000 design and make professionals. And those are the people that would be buying this software.
And I'll break it down even further for you. That $31,000,000,000 breaks down into $18,000,000,000 of design and $13,000,000,000 in make. And the professionals break down into $12,000,000 for design and $19,000,000 professionals for Make. And you can see the different disciplines as well as the different areas of Make that all of these professionals are working in. Now, if I once again focus on the AEC industry trends, there's about 6 key trends that are driving growth.
Obviously, sustainability remains top of mind, given the historic volumes of waste that we've seen in construction over the years. In the current climate of COVID-nineteen, we are actually also seeing cloud collaboration accelerate. It's really one of the only ways that a lot of these businesses have been able to continue working because they can collaborate remotely and still deliver their projects on time. And Amy is going to go into more details with you on specific programs that we put in place and some of the growth that we've been seeing. The ones that I'm going to focus on today are suburbanization, asset performance and BIM mandates.
And in particular, let's just talk about what are all of those trends actually driving in terms of projects. Well, we have more and more people moving to cities or suburban centers. So this means, again, more buildings and more infrastructure. So we have to build enough road, rail and highway to circle the earth 30 times per year. We'd have to build 20,000 more bridges each year than we are currently building.
And it's currently estimated that there are $4,000,000,000,000 worth of assets that are currently at risk. And what about the momentum in government BIM initiatives? We continue to see government led BIM initiatives have more and more momentum. Governments around the world are understanding that BIM is going to help the industry respond to more demand and produce higher performing buildings and infrastructure. And it's why more and more projects are putting BIM policies and frameworks in place and asking that those be used on construction projects.
In fact, in the last 12 months, we saw Germany and Japan, which are the number 5 and number 6 markets in the world, introduce BIM requirements. And we're going to see more and more owners from the private sector require building information modeling. And let me just give you an example of that from the perspective of BIM penetration. As a leader in BIM, Autodesk is really best positioned to take advantage of the tailwinds and embrace this massive opportunity. And I just want to point out 2 examples.
So I showed you BIM penetration last year, and we're seeing real good momentum in developed markets. The United States last year was 27% penetrated, it's now estimated to be 32% penetrated. Australia was estimated to be 27% penetrated, now it's 39% penetrated. So the point here is though we've seen movement in these developed markets since last year, you can still see that these penetration rates are really very low. So there is still a big growth opportunity for us with respect to building information modeling.
Now this chart shows total global construction spend by segment in 2020. The CAGR from 2020 to 2023 is on the y axis, while the value of the opportunity in billions is on the x axis. Now note that all this data is pre COVID, so these numbers will change, but it still serves as a really valuable indicator of the fastest growing and the largest segments. Transportation is the fastest growing segment. And as you can see within transportation, rail is the fastest growing area.
And rail is where we really see a great incremental opportunity for growth, and that's what I'd like to click into today with you. Rail represents a $655,000,000 opportunity for Autodesk in FY 2021 based on end user expenditure. So this is the size of the Rail opportunity that we can go after. And why is rail such a big opportunity for Autodesk? Populations are growing, cities are growing, and it's just becoming more and more crowded and it's harder to travel within cities and it's hard to travel between them.
People are looking for more efficient and sustainable solutions for the transportation of people and the transportation of cargo. Passenger travel is measured in passenger kilometers and freight in ton kilometers. So that's the number of tons or the number of passengers multiplied by the average distance of their journeys. There is a forecast right now that there is going to be a 30% increase in passenger kilometers in the next 5 years, a 20% increase in freight ton kilometers in the next 5 years, and all of that is driving the need for 172,000 kilometers of new railway to be added to the global network between now and fiscal year 'twenty four. And just to show you some of the momentum that we have, across the spectrum of rail opportunities, last year alone, we had great momentum with owners and operators of rail.
These blue squares represent the countries and projects where we have successfully sold enterprise engagements. On this next slide, you can see all of the green and that represents countries and opportunities we are pursuing with owners and operators. What I really would like to show you is an interesting rail project. This is one that really helps you understand the complexity as well as the need for more rail. So this project is called the FOLO line.
It's a 14 mile high speed railway line between Norway's capital city of Oslo and the suburban center town of ski. The line is expected to reduce 5,800 car journeys a day. It's supposed to remove 750 trucks daily from the European Route E18, and it is projected to eliminate 5,500 tons of CO2 emissions per year. And as you can see in this example, this is the construction phase from a Spanish firm called Asciona. They specialize in sustainable infrastructure and renewable energy.
And they are going to deliver a construction digital twin of this high speed railway dual tunnel entirely modeled with our infrastructure portfolio. They're using Autodesk Civil 3d as the main design tool. They're using Navisworks to create a centralized federated model that is an integration of over 100 building information model designs, and this is enabling them to have an acceleration of review and approvals, and they're also using 3ds Max for fly throughs and for renders. So why is Autodesk uniquely positioned to win in rail? Well, first, we have seamless integration between vertical and horizontal infrastructure.
So the people building bridges and buildings and stations and everything in between are all from different disciplines. They need seamless integration of our products so that they can collaborate together and be as effective as possible. And that's why we're winning against the competition because Revit is the gold standard for station design, and we now are accelerating the adoption of building information modeling for linear rail assets as well. 2nd, we have connected BIM and GIS. We have a really strong partnership with ESRI and they have a high penetration with rail owners as well as the rail ecosystem.
We have built an information exchange between our two platforms. We are breaking down data silos and we are integrating BIM and GIS that really enable civil engineers to make better planning decisions and to do better optimizations. And finally, digital delivery. We have an agile and scalable cloud based project data management and design collaboration capabilities that are used to replace legacy systems. And that's why we're poised to win and why we are winning in rail.
So let's move on to design and manufacturing.
So if
I look at the $69,000,000,000 TAM, dollars 33,000,000,000 of that is in design and manufacturing. And again, that's the TAM through FY25. That serves 29,000,000 design and manufacturing professionals. And to break that down, that's 19,000,000,000 for design and 14,000,000,000 for make. And the way the professionals break down, it's $9,000,000 in design $20,000,000 for make.
Again, here's the 6 critical trends that are driving growth in design and manufacturing. And what I want to do is I want to really focus on one of them. Now, Scott is going to be talking to you about process digitization, mass product and customization and smart products when he comes up and talks later. So I'll just focus on the convergence of manufacturing and construction. Now earlier, I shared an example of NOF, right, and they were using basically different kind of processes, manufacturing processes to the construction process.
But what if I talk about and give you an example of the flip side of that coin? How are manufacturers of staircases, sinks, air conditioning units collaborating with architects to ensure their products can fit seamlessly into the built environment. So this segment is called building product manufacturers and fabricators, and they are finding that they need the building information model to be able to design within context. And that is a $925,000,000 opportunity for Autodesk. Just to give you an example of what that looks like, imagine that you're an architectural firm and you want to design a custom overhang on this building.
This is the kind of integration that you get between Revit and Inventor and BIM 360. It allows the product designers to build things like this overhang and you can build it to the exact and changing specifications of the building and the model just updates seamlessly. No one in the industry can even come close to something like this. Another example that I would give you is a company called Clima Oprima. They're based in Croatia and they're in the business of outbidding clean rooms and operating rooms with HVAC and ventilation systems as well as other smart building systems.
With its previous competitive solution, Klima Opryma struggled to communicate with contractors and with architects. They needed to design and engineer their products in the context of the building. And you really can't do that if you don't have the building information model. So to solve that problem, they bought Revit, and they are using Revit as a tool to receive and explore BIM models for their customers and it is allowing for seamless interaction between contractors and architects. So why is Autodesk positioned to win in building product manufacturers and fabricators?
Well, for these three reasons. 1st, our tight integration between Inventor and Revit. We introduced AnyCAD for Revit and it has an associative link with its models to Inventor. That means that if the building envelope changes, the manufacturer always has the up to date geometry. The way, that was one of the most asked for features that we had for both Revit and Inventor in the past few years.
We also enable highly customized building products by using our leading cloud based engineering automation. And 3rd, we have deep knowledge and leadership in both AEC and design and manufacturing, which is a unique position. We have over 80 years of combined experience in both AEC and in design and manufacturing. Nobody else can come close to that. And that's why we are uniquely positioned to win with building product manufacturers and fabricators.
So that's design and manufacturing. Let's move on to media and entertainment. Now the media and entertainment design TAM is 5,000,000,000 and it serves 2,000,000 professionals, and that's across advertising, film and TV and games. These are the key six trends that are driving growth in the media and entertainment industry. And in particular, I want to focus on just a few of these: streaming and subscription content as well as new online platforms.
Online platforms are fast becoming the preferred means for consuming content and subscriptions is the preferred means for paying. And the two trends that you're seeing here are the ones that are specifically driving increased demand for our core content creation tools, Maya, Max and Shotgun. There's also a rapid rise in streaming and subscription content, as well as the increasing number of digital content platforms. You're seeing things like Google Stadia, Disney Plus, and Apple Arcade. Each one of those platforms needs massive amounts of content to attract and retain subscribers.
And that's what's representing an immediate opportunity for Autodesk. Audiences now expect the same quality of content on TV as they would on the big screen. So for streaming companies, this is a pretty big challenge. 1 season of a TV program is more than 10 times longer than a movie and people want the same quality of the content. That's helping Autodesk to create simpler, more efficient workflows that are allowing our customers just to better scale their production.
The M and E collection is an integral part of addressing. And as you can see here, that collection provides tools from the early stages of pre production all the way to the final rendered frame and Arnold. Now, shotgun is also an area where we're seeing growth in demand. And this is because of the need to move to the cloud and cloud collaboration. Shotgun is tackling one of the key challenges that customers are facing today and that's digital waste.
Digital waste is creating inefficiencies and a lack of collaboration between different production companies. A large movie production involves dozens of companies with hundreds of workers and they're trying to work together on visual effects. You have to have collaboration tools to stay in sync and to avoid any redundancies and shotgun helps them manage their pipeline in the cloud. So that's the market opportunity, the specific click down into each of our industries. And last, I want to talk to you about monetizing our non compliant user base.
And this is an area where we now have a better understanding and more data than ever before. It's a pretty big opportunity for us. Non compliant users, as a reminder, have not paid us, but they're using our software. And legacy customers are the ones that have fallen off of maintenance, so they're using older versions of the product. What do we know about these non paying users that we didn't know in the past that's helping us to monetize?
So I want to share a more granular perspective with you. Now, last year at Investor Day, I told you that there were 12,000,000 noncompliant users. So if you look at this grid, the vertical axis represents the number of times non compliant users have activated a session with the product in the last 90 days. So the higher up the access they are, the more they use our products and the more likely they are to convert. We excluded users who had logged in only once in the last 90 days.
We start with 2 plus all the way to 11 plus Now the horizontal access represents what version of the product they're using. So on the left, it's all versions and on the right, it's the last five versions back. So the further to the right they are, the more value they place on the latest and greatest technology and we believe that makes them more likely to convert. So the non compliant users in the top right hand corner of this quadrant represent our best targets. We have 7,000,000 users who are activating sessions more than 11 times in the last 90 days and are using versions released within the last 5 years.
And that's what we believe makes them highly convertible. Now, if we look at all versions out there, there are 9,000,000 non compliant users that are activating multiple times, right, 11 plus. We believe the viable market opportunity for non compliant conversions is in the top right quadrant, somewhere between 7,000,000 users and 12,000,000 non compliant users. In the past, by the way, I've also given you a split between emerging and developed markets, but we really don't think that distinction is important anymore because we've been able to monetize equally in emerging countries as well as developed. And Steve is going to go into more detail about how we're converting these, but the sweet spot of our opportunity is between that 7,000,012,000,000.
In addition, 2,000,000 of these non compliant users are what we call highly targetable subscriptions. And that's because these are users who we've identified that are within our paying customer base. So these are within our paying customer base and they are using non compliant products. That's why we believe they are highly targetable customers. And we know more now than we have ever known before on this non compliant base.
We're able to message them via their computer in 40 countries. We know that more than 90% of
the non compliant licenses detected are for 6
key products. And the insight we're Beacon is allowing us to build more detailed profiles of non compliant users so we can provide more targeted value messages to help drive these conversions. And this is information in detail that we've never had before. And that's why Steve will be able to give you more detail on just what we're doing and how we're being successful with convergence. So in summary, we're really excited and we're well positioned to grow.
We have a $69,000,000,000 TAM in design and make across all of our industries through FY 2025. We have incredible insight into our non compliant users than ever before, positioning us well to monetize them. Thank you for your time. And now I'd like to introduce you to Jeff Kinder, who will come out and speak to you next. Thank you.
Thank you, Lisa, and good morning, everyone. I'm Jeff Kinder, Chief Digital Officer at Autodesk. I've been here at Autodesk for 18 months to the day in fact. I'm excited to share with you some of our priorities as well as our progress in digitizing the company and continuing to evolve our business model. I'm going to talk with you today about outcomes and foundations.
That's how we've organized our digital efforts. I'll talk about where we are going and how we will get there. Let's begin by talking about our continued business model evolution. The business model is an area where we've introduced some new programs this year and given our customers a clear idea where we are heading, named users, tiered plans and flexible choice. One of the most powerful elements of a subscription model is having everyone as a named user and truly getting to know your customers.
What's more, in a named user model, serial numbers go away, licensing moves to the cloud, and usage data can be easily shared. For a long time in a perpetual license and maintenance model, we used serial numbers as a proxy for named users. But when everyone is a named user, everyone benefits, users, business owners as well as Autodesk and our partners. Our move to named users had been long planned, but in the context of the pandemic, it feels more important than ever. Work on any device in any location is an invaluable feature when you are in your home office.
And our customers have told us how thankful they are since the crisis began. Also with so many companies restructuring or laying off workers, the need for reskilling, upskilling and personalized learning has never been stronger. And here is an example of where named users are collaboratively creating and editing a model in AutoCAD. We are building a common data experience across our products which will enable broad collaboration and convergence. This is only possible when everyone is a named user.
Having named users also benefits business owners, offering them visibility into who's using software, when and for how long. They can then optimize their licensing for the growing needs of their businesses. They can better align value with usage. Employees or contractors can also easily be added to teams or projects. And just as importantly, they can be removed when they leave a team, thus giving tighter control over data and security.
Here you can see our usage reporting we rolled out in the customer account page last year to help customers make smart investment decisions. Named users are good for Autodesk and our partners too and critical to knowing our customers. When we understand usage down to an individual level, we and our partners can have richer conversations with customers about their needs, both now and in the future. Sometimes these conversations lead to customers needing fewer licenses, but usually it's the other way around and they end up growing their footprint and we see net revenue retention rate grow. We would rather have satisfied customers whose value is aligned with usage.
Following named users, tiered plans are another step in our evolution and a program we announced this year. In fact, we are launching sales of our premium plans beginning next week. As customers and businesses grow, their needs change. Tiered plans allow customers to tailor their administrative support and reporting capabilities to the needs and size of their business. Simply put, we see tiered plans as another way for customers to align value with their usage and needs.
You can see we've created 3 tiers of commercial subscriptions: standard, premium and enterprise. We've basically had Standard and Enterprise tiers for years. Standard effectively replaces our existing base subscriptions with improved support. And enterprise is covered with our enterprise business agreements and enterprise priority support. With the move to named users, our top requests from customers have been higher levels of administration, security and reporting.
Thus, we created a premium plan to fill that gap and help customers manage their large number of named users. By the way, the tiers are designed to meet the needs of different sizes of customers. However, those distinctions aren't rigid. Small businesses can choose premium if they think the features such as single sign on are important for their business. We begin selling premium plans on June 7 and we are very excited.
The next step then in our business model evolution is choice. We have developed a business offerings framework that gives our customers flexibility while simplifying the purchase decision and our go to market. We began by looking at 6 key levers of an Autodesk purchase decision product term access, plan add ons and payment. Here's how it works. Customers first decide what product they need, standalone product, a collection for their whole industry or access to the entire Autodesk portfolio.
How long do they need it? A day, a month, a year or multiple years? How do they want their users to access? Assigned or flexibly? What level of administration, reporting and support do they need?
Do they need any add ons like a manufacturing extension? Lastly, how will they pay? Cash upfront for the duration of subscription or cash upfront and then they consume tokens throughout the subscription? These levers are configurable for our go to market teams as they speak with customers. Most of our customers fall into this configuration.
Single product, annual subscription, assigned users, standard plan and cash upfront for the subscription. Let's look at an enterprise business agreement or EBA. EBA customers have the following: Access to the whole portfolio, typically multiyear subscriptions flexible access for users, enterprise plan for administration support, and after paying cash upfront, they consume from a bank of tokens based on use. You've also heard us talk before about paper use. Paper use is where we take the flexibility of an EBA and extend it to the mid market.
We are in the midst of a paper use pilot, but here's what they look like access to the whole portfolio, annual subscriptions typically, flexible access for users, premium plan for administration and support and similar consumption of tokens based on use. This configurable model or framework offers flexibility to our customers yet it also simplifies how we think about our go to market and the underlying systems needed to support the business model. That's where we're going, names, plans, choice. What investments have we put in place to get there? What are some of the foundational steps we need to take?
We need to retire legacy business models that rely on serial numbers. We need to modernize our financial and data platforms for named users and subscription. Lastly, we need to protect our systems from non compliant usage. We are in process for each of these. Maintenance and multi user are 2 legacy models that rely on serial numbers.
Combined, they currently account for 20% of our customers. To get to the point where everyone is a named user, for all the benefits I discussed earlier, we had to sunset these models and offer customers a smooth path to name user subscriptions. We are transitioning all remaining maintenance and multi user customers to named user standard subscriptions with the option to upgrade their plans. This is the path for our maintenance and multi user customers and we've made it easy. Our maintenance to subscription program or M2S ended its very successful run on schedule in May of 2020.
With the announcement of the end of renewals for maintenance in FY 'twenty two, we introduced a last chance 1 year trade in program to convert the remaining maintenance customers who hadn't taken advantage of M2S. We also announced the end of sale of multi user in FY 'twenty one and the end of renewal in FY 'twenty two. For multi user customers, we are offering a 2 for 1 trade in over the next year where they will get 2 single user subscriptions for every 1 multi user. And the 2 for 1 exchange maintains the pricing customers received in moving the subscription. We also introduced tiered plans as I described earlier and kept renewal prices flat for existing customers.
How have customers reacted? Having gone through the M2S transition 3 years ago, you might ask how And here's why. We earn the trust of customers And here's why. We earned the trust of customers, partners and you with a successful move to subscription. 2nd, we've built on the lessons from M2S and kept these changes simple with a shorter time horizon and broadly communicated.
Lastly, customers are just more familiar with being named users. Subscription services surround them. Our customers are consumers who use Netflix and Amazon. They are also business customers of Microsoft and Salesforce. They recognize that named users and subscriptions are where modern software as a service companies have headed and they want to be there.
Here is a quote from one of our platinum partners that nicely captures this sentiment. If retiring our legacy models is step 1, modernizing our financial and data platforms is a close and related second step. The sequence is partly because retiring those legacy serial number based models allows us to retire some legacy platforms. We are modernizing our data and financial platforms to grow with the business model. These systems need to nimbly support named users and subscriptions.
Data platforms must be identity based and connect users to products. I mentioned the common data experience earlier as enabling collaboration and convergence that must start with named users. Similarly, our financial systems need to support the levers I described earlier and need to move beyond SKUs to an attribute based offer model. The good news is we are making these modernization changes while continuing to grow. In fact, these changes set us up for the future.
1 of the other foundational elements for how we get there is to harden our systems to protect against non compliant usage and we have a number of efforts happening here on multiple fronts. First and foremost, it's a lot harder to be non compliant when everyone is a named user. We are also stopping offline activations and looking closely at serial trial users. Let me also show you two examples of these efforts to harden systems. First, student verification.
Student licenses have long been a potential loophole for non compliant users. This year we changed the student license from 3 years to 1 year. We've also rolled out student verification for all universities, trade schools and secondary schools across the US, Canada and the UK. We will extend verification to rest of world later this year. The second example is concurrent user limits.
Non compliant usage is much harder in a named user subscription model because there are no serial numbers to pirate. However, new forms of abuse can crop up such as user sharing and login credentials. Our Fusion team has approached this problem in a creative way. When a user exceeds the number of active sessions allowed, Fusion puts up a user friendly message that lets the user know and gives him or her options to continue and be logged out of the other session, stop and stay logged into the other session or suspend the other machine. What we are seeing is users sometimes forget to log out and this protects their work, or customers need more licenses and now they know to get them.
Interestingly, the Net Promoter Score for customers who received this message actually went up. I've shared a lot with you because our digital transformation is in full swing. Let me recap. We think about our priorities in terms of foundations and outcomes. Some of the critical foundational work we are doing to support our growth includes sunsetting old business models, investing in data and financial platforms and hardening our systems, and we're progressing on each of those.
When we think about where we are going, we are driving toward a future where everyone is a named user, tiered plans are tailored to customer needs and flexible business models align value with usage. You may ask where we are in the digital transformation journey. Here's the way we think about it. This is a multi year effort. As Andrew said, we have our digital investments in place and they are ongoing.
We will see benefits along the way. We break the digital transformation into categories, business models, digital experience and modernization, and we think about our efforts and investments over 3 horizons, new systems and processes, new experiences and models followed by digital maturity. The horizons overlap. We are currently in the latter part of the first horizon and early stages of the second. In that last term, digital maturity is important.
As the pace of technology marches forward, digital transformation is never finished. It just moves to a state of maturity and ongoing investment to extend our lead. That's the mentality we have. We believe our digital investments will extend our lead in our industries and for our customers. Thank you.
And we will now take a short break. When we come back, Amy will speak to you about how we are innovating and driving growth in our design portfolio.
Welcome back from the break, everyone. I'm excited to be here today to share with you how our design portfolio has been innovating and differentiating to drive growth. I'm going to highlight 3 ways we are leveraging innovation and competitive differentiation to better serve our customers and drive growth in our design business. 1st, whether someone is an architect, engineer or animator using our products, they'll enjoy continued product innovation that increases their productivity, creativity and overall satisfaction. In addition to growing our design business, we have numerous ways to support expansion into adjacent opportunities with targeted workflows.
Becoming a named user on our current products offers distinct advantages over older versions used by our legacy and non compliant base. There is an ever widening gap in capability between the current releases with their connected cloud services and our older releases. Let's talk about how we've been innovating for our subscriber base. But first, why innovate here? Well, with over 4,000,000 subscribers at the end of FY 2020 on our design products, we have a huge base of customers and these tools are critical to their livelihood and competitiveness.
And with approximately 400,000 subscribers on our older maintenance model at the end of FY 'twenty, we have an opportunity to help these users move to our named user subscription model and enjoy those benefits. And our reach is even broader than that. There are approximately 7,000,000 professionals who list AutoCAD as a skill on LinkedIn. To give you a sense for just how often AutoCAD is mentioned as a valued skill by professionals relative to our competitors, the next largest has fewer than 250,000 mentions. And of course, our ecosystem expands well beyond AutoCAD.
Revit Skills had over 1,000,000 mentions Inventor over 500,000 and 3ds Max over 660,000. That's a lot of people depending on our products. One commitment we have to our users is to continually modernize their experience, creating cohesive experiences within and across our products. A benefit of that is ease of learning for our users and faster development for Autodesk as we use more code internally. Over time, our products are converging on a state of the art user experience that accelerates customer productivity.
Let's take a look at how this type of modernization manifests itself in AutoCAD. Last year, we introduced 4 ks support and a new dark theme to make it easier on the users' eyes. The AutoCAD mobile app on iOS is now leveraging the same core engine that drives the AutoCAD desktop application, speeding development and ensuring data fidelity. And performance is always a crowd pleaser with our customers. So we've improved graphics performance by 10x and sped up many frequently used commands.
The ability to use AutoCAD data in our 3 d products makes AutoCAD an on ramp to 3 d and lowers barriers to entry. In fact, 51% of Revit users also use AutoCAD. Users of our purpose built industry tools like Revit, Inventor and Civil 3d can easily incorporate data coming from AutoCAD into their designs. On the manufacturing front, we are rolling out new levels of cloud connectivity for Inventor and Vault. Even before COVID-nineteen, customers' expectations on flexible data access were growing exponentially.
Customers expect to access their data and interact with it anywhere and on any device, and that's exactly what we're delivering. We are completely rethinking how we present data stored in Vault based on use case and device type. In the near future, we will be leveraging machine learning and AI to present insightful information on the data, not just the data itself. Our investments in Maya and Arnold are dramatically reducing rendering times. And with faster cached playback, artists can iterate and try out new design ideas more quickly.
And all this is built on top of over 60 new features in Maya to help animators work faster. In addition to growing our business and our existing products, we have numerous opportunities to support expansion by leveraging new product capabilities. I'll highlight 3 here. 1st, BIM 360 design, a popular add on for Revit and other design applications 2nd, targeted capabilities for building product manufacturers and fabricators and third, rail system design. BIM 360 design enables customers within the same firm and across multiple firms to work together on a hosted version of the Revit model.
Different teams and disciplines can add and modify their contributions with all collaborators seeing changes in real time. Customers like McCarthy Building Companies are saving significant amounts of money by having their project teams collaborate via BIM 360 design. BIM 360 design was growing rapidly prior to COVID-nineteen, and we have seen accelerated growth as remote workforces needed new ways to collaborate. They will not want to go back to less modern and inflexible ways of sharing data. They'll want to collaborate from anywhere with anyone, and they will need to ensure business continuity and resilience for the future.
Customers access Revit Cloud Worksharing via BIM 360 design subscription, and these have been steadily increasing. So far, much of our usage has been in the U. S. And last quarter, we enabled customers to store project data on an EU server. This lowers barriers to adoption for our EU customers who may wish to store data locally.
Now in the wake of COVID-nineteen, many of our Revit customers have been forced to work from home and explore new ways of collaborating. We have seen over 200% growth in projects for our commercial BIM 360 design customers. And with the introduction of our extended access program, we have also seen tremendous growth in trial users. We have only just begun to activate the Revit installed base. To date, we have only penetrated 17% of the Revit installed base.
We have a great opportunity in front of us. Last year, we also added support for Civil 3d, enabling Civil 3d users to enjoy the benefits of collaborating on a model in the cloud that was accessible to the entire project team. And last quarter, we added support for Plant 3d to the offering. These will be additional sources of growth for us. As you heard from Lisa, building products manufacturers and fabricators represent another significant opportunity for Autodesk.
We have many customers that create custom content like architectural chair railings that need to be designed in the context of a building and many others who create equipment like air handlers and boilers that is ultimately deployed in a building needs to be considered during the building design process. These customers need to work across both Revit and Inventor. Imagine you are an architect and you need to design a custom overhang for a portion of this large building that was designed in Revit. In the past, it would have been difficult to isolate just the parts of the Revit model you needed. With our latest releases, it's possible to take only what you need, so you can do your design in the context of the building geometry.
Behind the scenes, Inventor is now able to more deeply understand and respond to that Revit data. Now because we're referencing the part of the model we are interested in, this means any changes made in Revit will be seen in Inventor. So you are never out of sync or working on the wrong version. No one in the industry comes close to this type of data flow between manufacturing and AEC. We are not finished yet.
If you remember from Liza, rail is another $655,000,000 opportunity over the next 3 years. Building on our strength in design, we have added new purpose built functionality that extends this capability into rail track design. Customers can leverage the full Autodesk portfolio by integrating the track layout with the station design, which is unique to Autodesk. We have also introduced Dynamo into the workflow, which allows customers to automate specific tasks that are unique to rail. As we look to the future, we plan to expand the rail modeling capabilities to include turnouts, crossings and electrification.
Subscription to our current products has distinct advantages for our legacy and noncompliant users. There is an ever widening gap in capability between our older releases the current release with its connected cloud services. With over 1,800,000 active non subscribers, converting our legacy base to subscription remains a huge opportunity. Our legacy base can be thought of in 2 groups, each with about 900,000 users. Those on product versions more than 5 years old and then those from 1 to 5 years back.
We have better and more modern telemetry on the 1 to 5 year back cohort. For example, we know that over 50% of this group uses the product more than 45 days per year, with most of them at over 60 days per year. So they are actively engaging with the product, but missing out on what we have added over the years. As Lisa mentioned, our noncompliant users currently outstrip paying customers by more than 2:one, and some are also using older products that lack the latest and greatest capabilities we've delivered over the past few years on the desktop. Noncompliant users also do not get access to our cloud capabilities.
If we look at the last 5 years, there is an ever widening gap of new capability that customers using older products are missing out on. I'll highlight just a few of these. Shared views, introduced for Inventor subscribers first and now available across the portfolio. It quickly became the most widely adopted cloud enabled collaboration capability in our design and manufacturing product line. Broad performance enhancements across the portfolio like a 5x speed improvements in Maya by enabling multithreading And the inclusion of specialized toolsets within AutoCAD.
So AutoCAD subscribers have access to industry specific features and libraries for Let's look at a few other new capabilities. Included in the subscription to AutoCAD and AutoCAD LT are our exceptional AutoCAD web and mobile applications. We've reenvisioned AutoCAD to be multi platform and AutoCAD customers can now work anytime and anywhere. They can use AutoCAD on a Mac or PC, in a web browser or on a mobile device. And part of that anytime access is access to your data, no matter where it is stored.
This came in incredibly handy over the last few months as we saw usage of AutoCAD Web soar by 42% from February to April. Today, there are over 10,000,000,000 and our partnerships with Dropbox, Microsoft and Box. This year, we are pleased to announce our partnership with Google Drive. They have shared with us that there are over 9,000,000,000 DWG files stored in Google Drive and over 1,500,000 DWG files e mailed each day. Take a moment to think about that, 1,500,000 DWG files emailed in Gmail each day.
Today, customers can open their files from Gmail and Google Drive directly in the AutoCAD web app to view their files. And if they want to edit them, we lead them to our purchasing options. This is unique to Autodesk and AutoCAD on all the leading storage platforms, and you need to be on the current releases to leverage this. Let's take a look at what a modern CAD application looks like. These modern use paradigms and platforms are not available to our customers on older versions of AutoCAD, making these companies less productive than their competitors while vying for the same business.
You've heard us talk a lot about generative design for manufacturing, and now we are bringing it to AEC. With our latest release, customers like Sammoose can take advantage of the value of generative design in Revit. It would take one of Stamhoo's designers 4 hours to design one of their stores using their standard layout practices. Now in the span of 15 minutes, they can gather the information, submit a generative design job and receive 40 optimized design options that meet their design criteria and expand their solution space. Interestingly enough, most retail and office spaces are about to go through a massive redesign to better adhere to physical distancing guidelines.
These generative design tools will make that work less cumbersome, enable faster exploration of many layout options. Customers on legacy versions of Revit will need to update if they want to access this feature. This year, we have continued to enable our customers to realize more sustainable outcomes in their work and focus on reducing total carbon and greenhouse gas emissions. In November, we supported the launch of the embodied carbon and construction calculator, EC3, in collaboration with Skanska, SeaChange Labs and nearly 50 partners aimed at reducing the embodied carbon in the built environment. By integrating BIM 360 with EC3, we have enabled Revit users to use their existing model data to make informed, climate smart decisions on the building materials they choose.
Skanska is using EC3, Revit and other Autodesk Construction Cloud solutions to complete Microsoft's Redmond Campus refresh, the first large corporate use of EC3. Skanska's early estimates are realizing embodied carbon emissions reductions of up to 30% without significant additional financial impacts on the project, helping Microsoft achieve their commitment to be carbon negative by 2,030. In summary, we continue to innovate in our design products, creating more competitive separation and driving renewals. In addition to growing our business and our existing products, we have numerous opportunities to support expansion by delivering new product capabilities. Subscription has distinct advantages for our legacy and non genuine base, and there's an ever widening gap in capability between the older releases and the current releases with their connected cloud services.
Thank you. And now I will pass it over to Jim, who will talk about accelerating momentum in construction.
Thanks, Amy. FY 'twenty was, by all measures, a landmark year for construction at Autodesk. I spoke to you last year, we had just started our journey as Autodesk Construction Solutions and we were very much still 4 separate companies. Today, we're aligned as 1 Autodesk Construction Solutions organization, 1 product team, 1 sales team, 1 marketing team and 1 customer success team. We're 1 team working together with 1 mission: to help construction teams meet the world's rapidly expanding building and infrastructure needs, while making construction more predictable, safe and sustainable.
And as one team, we're only getting stronger. In fact, in FY 'twenty one, we've increased Autodesk Construction Solutions spend by about 20%. We'll increase headcount by more than 25% and we're expanding internationally with a focus on plan, grid and assemble in EMEA and APAC and the launch of BuildingConnected in Australia and the UK. But before I go into our FY 'twenty one plans, let's take a minute to review our strong FY 'twenty results. During FY 'twenty, each of our product lines, BIM 360, PlanGrid, BuildingConnected and Assemble, had record quarters for gross new business and we ended the year with around 50% year over year growth.
The strong momentum carried into Q1 FY 'twenty one, though tempered by COVID-nineteen. In addition, when looking at the last five quarters, we have tracked a revenue expansion rate of approximately 125% to 135%, representing the year over year increase in annualized value of ACS subscription revenue from our customers that existed a year ago. This is identical to how some of our competitors calculate their net revenue retention rate number. ACS products saw more than 50% increase in monthly active users and were included in more than 190 enterprise deals. This clearly demonstrates that go to market synergies are effective at driving growth at the named account level, and each of our products hit impressive milestones last year.
PlanGrid crossed $100,000,000 in ARR and is now used on nearly 2,000,000 projects around the globe. BuildingConnected now manages an average of $56,000,000,000 worth of project bids each month with 14 of the top 20 ENR ranked general contractors using Building Connected to manage their bid processes. And BIM 360 has seen an 85% increase in active projects year over year. And last, but certainly not least, we unveiled Autodesk Construction Cloud at Autodesk University, showcasing to more than 2,000 customers the future of construction at Autodesk. What this all adds up to is one thing, momentum.
Today, the construction industry is in a much different place than it was 6 months ago. The good news is that construction is restarting in cities like Boston, New York and Dublin. While we have seen bidding for new projects slow, we expect demand for healthcare facilities, industrial facilities, federal projects and infrastructure projects to rebound quickly. For sure, the crisis has led to creative thinking and increased interest in the role technology can play in helping to bridge the gap between digital and physical workflows. I'm hearing 3 distinct themes when talking with customers.
First, they're exploring what job functions can or should be done remotely. As Amy mentioned earlier, it's no surprise that we have seen significant growth across users and new projects in BIM 360 design. 2nd, customers want greater visibility into what is happening and what needs to happen on-site. We're working with our technology partners to explore how we can help customers track workforce information and support social distancing. For example, smartvid.
Io has an integration with BIM 360 that pulls photos taken on-site and analyzes them using visual AI to automatically calculate compliance with social distancing, face masks and other safety requirements. Finally, we're hearing about an increased interest in accelerating prefabrication and modular. COVID-nineteen will accelerate alternative methods of construction and industrialized construction overall. Industrialized construction has been an area of investment for Autodesk for several years and one we're uniquely qualified to address. Adopting the processes of prefabrication and off-site work will become increasingly important for our customers as the industry looks to decrease workers on the job site and increase resiliency.
Autodesk is committed to helping the industry advance with these new processes. Now I'd like to share our construction strategy with you. In FY 2021, we are guided by 3 key objectives: 1st, deliver the Autodesk Construction Cloud 2nd, drive expansion and 3rd, provide an exceptional customer experience. It all starts with Autodesk Construction Cloud. Our long term product vision centers around Autodesk Construction Cloud, which is made up of 3 pillars: advanced technology, a builders network comprised of general contractors and subcontractors more than a1000000 strong and the power of predictive analytics to bridge projects from the earliest phases of design through planning and building and into operations.
Since unveiling Autodesk Construction Cloud in November, customers have shared their excitement. As you can see in this quote from Emera FIVE from Windover Construction, the future is not departments working in silos, but connected across all disciplines to build more efficiently, sustainably and safely. Today, I want to share more with you about the advanced technology pillar and what customers can expect in the future. Our product team is focusing on 3 objectives: drive unification to a single solution, offer best in class capabilities and deliver meaningful workflows. Ultimately, our vision for Autodesk Construction Cloud's advanced technology is to evolve into a single unified platform powered by Forge that has 2 main elements.
The first is a suite of best in class applications for each construction phase. These apps will support specific workflows like design collaboration, quantification, bidding, project management, field collaboration and turnover. The second element is a shared data platform built on BIM 360 Docs and Forge that interconnects these apps and facilitates seamless movement of data between them. Realizing this vision requires significant effort. However, we're not starting from scratch.
We have all the building blocks in place and we'll put them together in 2 phases. In the first phase, we'll build the BIM 360.space shared data platform and a construction app on top of that platform that will utilize the best in class capabilities of our field and project management solutions. In the 2nd phase, we'll move our preconstruction apps to that shared data platform, creating a consistent user experience. Expect to hear more about our single unified solution later this year. Now let's talk about the best in class capabilities we've added to the products our customers are buying today.
Last year, we added more than 250 enhancements across preconstruction and site construction, and we have aggressive plans in FY 2021 targeting more than 200 new enhancements in our current products in the first half of
the year alone.
Let's start with site construction. Today, I want to call out the significant investments we've made in project management. With the most recent release, BIM 360 has increased connectivity across project management and cost management workflows with the ability to link RFIs to PCOs and connect issues and RFIs to meeting items. We're also connecting our cost solution to ERP systems. We've delivered several capabilities to increase efficiency and visibility into critical project information like RFIs and submittals, support on mobile, pay applications, cost forecasting and a broad set of APIs.
We now have an extremely competitive project management solution, which we continue to make stronger and our customers agree. In this quote from Mandy Leiker Parekh, one of the top general contractors in St. Louis, he highlights the numerous enhancements made to the tool and his excitement around keeping connected with less email. I also want to highlight a specific customer use case. Media Construction, one of Atlanta's largest K-twelve school construction companies and a PlanGrid customer was looking for a very specific RFI workflow.
The PlanGrid team reached out to one of our channel partners with a local presence and a proven track record in supporting these project management workflows in BIM 360. Working together, the PlanGrid team and our channel partner demonstrated the power of our project management workflows, beating out one of our top competitors and landing us a 3 year deal and the net new BIM 360 build and cost customer. It's clear we have a lot going on in site construction, but that is just one part of our construction portfolio. Preconstruction is where we really differentiate from our competitors. And given the new challenges the industry faces, there is going to be more emphasis on preconstruction than ever before.
We've made several enhancements to our preconstruction portfolio during the last year. For example, we've recently incorporated PlanGrid, BIM 360 DOTS and Forge technology into the BuildingConnected platform to launch a new quantity takeoff module, completely new functionality for Autodesk Construction Cloud. We'll continue our efforts in pre construction, focusing on design, collaboration and coordination, model conditioning and quantification and finally, bidding and qualification. Our 3rd product objective is to deliver meaningful workflows. Alone, these products are best in class and now collectively as part of Autodesk Construction Cloud, they offer more opportunities for integration and automation by connecting workflows.
When you look at where we started at the beginning of FY 2020, we had workflows between BIM 360 and our design products as well as Assemble. And over the course of the year, we added a number of new integrations, strengthening the ties between our products. Now, as we look to FY 'twenty one, Autodesk Construction Cloud will introduce more integrations, creating stronger connections supported by a common data environment in the forged development platform as the foundation. For example, recently we announced Autodesk Construction Cloud Connect, allowing customers to integrate key workflows like issues or shared documents between BIM 360, PlanGrid and BuildingConnected as well as other integration partners. Autodesk Construction Cloud demonstrates the breadth of our portfolio, the depth of our capabilities and the connectivity between our workflows.
This is an important theme that differentiates us from our competitors and has been resonating with customers. 1 firm that sees the value of Autodesk Construction Cloud is CRB. This year, CRB celebrated its 30 50th anniversary as a global consulting design and construction services firm. CRB knows that successful project execution starts the moment they win a job and they look for ways to maximize efficiency by connecting work flows from start to finish. The company has fully adopted Autodesk Construction Cloud, putting Assemble, BIM 360, BuildingConnected and PlanGrid to work across all parts of their business.
Using our BuildingConnected to PlanGrid workflow, CRB seamlessly transfers complex data from the design and planning phase into the hands of workers on the site, saving them at least 2 weeks of work on each project and improving communication with their subcontractors. They also use Revit and BIM 360 to co opt the 1 model and enhance collaboration with trade partners. And they use Assemble for progress tracking and connecting to Power BI to improve their monthly reports. They digitize quality and safety reports using PlanGrid, making it easier for teams to respond in real time. And underpinning it all, they use BIM 360 Docs as a common data environment to push data across the workflows.
Companies like CRB are embracing connected construction and creating more confidence in transitioning from design to plan and build. Our second objective is to drive expansion. We all know that construction represents a huge opportunity for Autodesk. In FY 2021, we're making investments in product sales, marketing and customer success to aggressively grow our business in Europe and Asia. To be sure, we're going to focus our efforts in those countries where we're ready and poised to win, like the UK, Ireland, the Nordics, the Netherlands, ANZ, Japan and Singapore.
And we're already seeing success in these markets. For example, earlier this year, Daiwa House, Japan's largest homebuilder and the long term Autodesk customer, expanded their account to include PlanGrid, representing one of our first major deals for PlanGrid usage in Japan. We also know that for success internationally, we need an ISO certified common data environment. This is a European requirement and is an absolute must. BIM 360 DOCS and FORGE form the centerpiece of our Common Data Environment vision and we are further improving it by adding support for ISO 19,650.
For BuildingConnected, we'll focus our expansion efforts first in Australia and later in the year in the UK. In North America, our building connected network is now more than 1,000,000 construction professionals strong. Beyond our global expansion, we're also continuing to pursue new opportunities in adjacent segments. 3 important segments have been targeted so that we can expand our opportunities, which includes owners, subcontractors and infrastructure. Utilizing the land and expand model, we've seen a 45% year over year increase in ARR within the owner segment.
We have also seen traction in the subcontractor market and looking at PlanGrid alone, we have seen a 34% year over year increase in ARR. Finally, we continue to push within the infrastructure market. As you heard Lisa say earlier, infrastructure is a great opportunity for Autodesk with significant growth in segments like rail transportation expected by 2024. Thanks to new enhancements within BIM 360, we've seen a 76% year over year increase in ARR. In fact, late last year, we announced collaboration for Civil 3d, allowing subscribers of BIM 360 Design and Civil 3d to work collaboratively with project partners at any time and from anywhere regardless of team location and discipline.
This makes designing and constructing airports, rail stations and other complex projects with vertical and horizontal structures simpler and more efficient. Also, earlier this year, we announced our investment with OREGO Software. OREGO is a construction technology company that is very much geared toward owners for capital management and project management. Think of airports, transit systems, state departments of transportation and public works departments. Orbital's forge based integration with Autodesk Construction Cloud will give both public and private owners a single technology platform for designing, planning, constructing and operations of infrastructure and private assets.
The investment in Aurigo has created excitement in the industry. Our partnership with Aurigo and new integrations like collaboration with Civil 3d provide great momentum in industry segments beyond the general contractor. Finally, our third objective is about providing an exceptional customer experience throughout their journey with Autodesk. Our job isn't done once a deal is in and we know that a strong business success a strong customer success program is critical to the long term success of our construction business. As we move into FY 'twenty one, we're bolstering our efforts to better partner with customers to help them achieve their desired business outcomes.
Under new leadership, we've redefined roles and responsibilities to drive a coordinated customer experience and the customer success team will now play a greater role in onboarding, driving renewals and identifying expansion opportunities. We're already seeing the added value a strong customer success partnership can bring. Take for example, Barton Malo. Barton Mahlo was an ENR 100 general contractor. In 2018, they purchased BuildingConnected and BIM 360 and was soon introduced to a customer success manager.
The customer success manager worked with Bart and Milo to understand their business objectives, agreed on an implementation plan and map our technology to their workflows. Then, they implemented training plans and developed customized plans to jump start new users. Thanks to this effort, Bart and Malo has published almost 200 projects and managed nearly 5,000 subcontractors in Autodesk Construction Cloud products, estimating they have eliminated at least 4 weeks of work from their qualifications process. This strong product engagement led to a significant expansion within both products, results that were driven all through our customer success organization. Guided by these three objectives, I'm confident that we will become one of the global construction industry's preferred cloud solutions.
And I see 3 key differentiators that sets us apart from the competition. 1st, our leadership in building information modeling and authoring tools such as Revit and AutoCAD, opens the door for customers to easily work with Autodesk Construction Cloud. Next, the breadth of our portfolio. Autodesk Construction Cloud provides customers with the most complete solution available. It offers more opportunities for integration and automation through connecting workflows, provides a robust network of construction professionals and reduces risk today and in the future with predictive insights.
Finally, our global presence allows us to expand into international markets efficiently. Our strengthened sales team in EMEA and APAC will only accelerate that momentum. We are looking at construction in a more connected way than ever before. Our solutions are built for every customer in every industry at all stages of the building lifecycle. I am confident that in FY 'twenty one, Autodesk will be the technology to transform the construction industry.
Now I'd like to hand it over to my colleague, Scott Reese, who will share our growth opportunity in manufacturing.
Thank you, Jim. It's so good to see all of that momentum in construction. It's such an exciting growth opportunity that we have. So speaking of exciting growth opportunities, now we want to take a few minutes and talk about the opportunity that we see in manufacturing. And Lisa touched on how we see the market playing out.
We see the TAM through fiscal year 'twenty five growing to over $33,000,000,000 in size, and that gives us access to over 29,000,000 design and manufacturing professionals. Now we do see a lot of convergence happening over the next several years in this space. But if we take a look at the design side of this, we see that as growing up to $19,000,000,000 and then the other $14,000,000,000 coming from the discrete manufacturing side of it today. But again, we do see a lot of convergence playing out over the next several years, but it's important for us to see kind of the personas that will participate in this process. I showed you this slide last year.
And really what we're depicting here is that there's an existing approach to this market, but we also see a disruption coming. And that's where we see the opportunity for converging the process of designing something with the process of making it. And we've made a big investment there that we want to continue talking about the progress that we've seen. But I would be remiss if I didn't remind you of the position that Autodesk has in this space already today. So the design and manufacturing market is kind of broken up into sub segments today.
We talk about the CAD space, the CAM space, the CAE or many people refer to that as simulation or the PLM space. And we have a good position across that entire lifecycle today. Now if we look at why do we win today, we are outpacing growth in our core products in this space today than any of the competitors in the market. So let's take a look at why we win. We have a big position in industrial machinery.
In addition, if you think about building products, the products that are manufactured that ultimately end up inside of a building, we also have a really unique position there. If you think about customers who are designing those buildings in Revit, it's a pretty natural thing for them to leverage Inventor to design the products that go into those buildings. And then also in process manufacturing, we've always had a big position in process manufacturing. And if we take a look at one of those process manufacturers, they don't get much bigger than BASF in the chemical processing side of things. And the interesting thing about BASF is it's representative of what we're seeing in a lot of our customers where they have a big position with our core products, but they're also adding our newer products.
In this case, Fusion 360 BASF recently added over 2,000 seats of Fusion 360 to start augmenting the workflows they get from our core products, bringing in generative design, bringing in augmented reality and really helping them collaborate with their suppliers as well as across departments. So BASF is a good example of customers we expect to see a lot more of where not only do we have a big position with our core that we're continuing to grow, we're also augmenting with our cloud products. So again, we have a big position in manufacturing today where we continue to outpace the competition. We're going to spend the majority of our time talking about this disruption that we see. We want to talk about what's causing that disruption, talk about what our customers are going through and how we are helping them respond and thrive to that.
You'll hear us talk a lot about generic design and convergence and what we're doing to automate a lot of those processes. So first, if we take a look at kind of the secular trends and pressures that our manufacturing customers are encountering, I think that will kind of tee up the landscape that these customers are operating within. The products are getting smarter, processes all across the spectrum are digitizing and supply chains are reorganizing. So if we look at that in a little better detail, when we talk about products getting smarter, this is something that as consumers, our expectations have just changed. There was a time where a manufactured product was predominantly a mechanical object.
But as consumers, our expectations are that they're connected now. They have software running in them. They have electronics. Of course, they have mechanical. But it's really the combination of those three that it's required to drive innovation in a new manufactured product.
So undoubtedly, this is a consumer trend that manufacturing customers are having to respond to and we're helping them. But also, we are in the age of digitization across all of our industries and manufacturing is no different. Now manufacturing has been ahead in digitization in some regards, but even those processes are getting re digitized. And as we bring in robotics and automation, digitization continues to evolve. But don't forget, if you look at like the machine shops and the job shops, there's still a lot of paper involved there.
So there's a big opportunity to digitize the shop floor as well. And then supply chains are reorganizing. Now more than ever, we are realizing the impact and the role of the supply chains. And moving forward, we see that manufacturing companies are going to look a lot less like what you see on the left here. They're going to look a lot less like a production line and a lot more like what you see on the right, which is job shop where you're taking discrete jobs and execute them more locally to the point of consumption.
So manufacturing of DALLE is going to become a lot more distributed in the future. Now if we look at the traditional process of what it took to bring a product to market, it's this very serial, very linear approach. You have an idea, you put some geometry behind that idea, you simulate it to validate if it's going to work and meet your expectations, but then you go out to manufacturing. Now what's the problem with that? If you look at every step along the way, there's data that's lost, there's rework that's encountered, and the workflows are just very disconnected.
So the later in this process that you need a change or you discover a problem, the more expensive it becomes in sorting that out. So when you think about customers' ability to respond to those secular pressures that they're undoubtedly encountering, this serial process is problematic. Now we've seen this coming for a while and this is why we've made the big investment in Fusion 360 where we are converging the process of designing something with the process of making it. It's the first of its kind. No one has ever focused on this complete convergence.
Infusion 360 is getting a lot of traction, so we want to talk about the why and the what behind that. Now when we talk about convergence, it can be a little bit ambiguous as to what we mean there. So I want to get very clear. Over the past several years, we have acquired and built out a lot of the intellectual property that it takes to fill out that spectrum of conceptualizing a product, designing it, simulating it and manufacturing it, be it a manufacturing process or 3 d printing or subtractive, we own all of that intellectual property. And we have very intentionally converged all of that intellectual property into a very cohesive workflow inside of one application, but maybe more importantly, on top of a cloud based data backbone.
So I want to talk about that. So first, let's look at convergence and the impact of that. Now this is a company called Festool and what they need to do is they need to add some electronics into their saws. These saws are stolen on the shop site, job site all the time. So they wanted to add a thumbprint reader.
And inside of Fusion 360, again, back to convergence, we've converged mechanical design and electronic design. So not only did they design the handle to incorporate a thumb reader to operate this all, they have the complete capability they need to design the electronics for it, again directly within the context of the mechanical object itself. But here, not only are we designing the PCB board, we're also simulating it and then taking that straight out to manufacturing. You can see here where we're leveraging some thermodynamics to understand the heat that those chips are going to emit and understand the impact of that over the life of the product. So again, converging mechanical, converging electronics and converging manufacturing is really what made the difference here for Festool and this video hopefully shows you exactly how that works.
Now you didn't see me leave an application, you didn't see me send files around all in one application, a single user or even a team of users were able to complete that workflow with the data flowing seamlessly across the disciplines. So what's the impact of that? Companies like Festools are getting better products to market faster than ever before. All of that data loss, gone. The rework, gone.
All of those curves are now smoothed out and the time to market is shorter than ever before. So that alone is disrupted. It's the first of its kind in our market. But this is where it gets even more interesting. So now that we have all of these capabilities converged into a single application on top of a common data backbone, we can start to automate them, we can drive those capabilities algorithmically.
And that's what we call generative design. So let's take a look at that same saw from Festool and an example of how they are leveraging generative design in their process. So what you'll see here is I'm going to recreate the base for this saw. I want to take some weight out of it to make it easier to move around. But I don't want to I can't compromise on its rigidity and its ability to perform.
So I have some pressures that it needs to be able to accommodate, some forces that I need to be able to define. Maybe I care about materials and I have a certain number of manufacturing capabilities or techniques at my disposal. And then from there, I've defined the requirements and then Fusion 360 actually generates the geometry that is most optimal to the set of requirements that you've defined. So this is not topology optimization. Fusion 360 has generated from those requirements the actual geometry.
And then again, all in one environment, I'm not passing data around, the data is all in the cloud, it's all cohesive, it just naturally then flows out into the manufacturing process. It's conversion, it's automation, it's generative design, it's the first of its kind. So this is where you start to see exponential gains. You put in the requirements and let Fusion 360 do the work. You cut out a lot of the time that it takes to flush out a design, leveraging historical serial means.
Generative design is the future and it is in Fusion 360 alongside of all of those end to end capabilities. So again, all the conceptual, mechanical, electrical, simulation and manufacturing capabilities are in there now being driven as part of generative design. This is a big deal for our industry. Okay, now let's talk about this notion of digitization because this is an important element of how everything in those two videos just happened. Now, I don't want you to lose sight of the capabilities of having all the conceptual design, mechanical design, simulation, all of those capabilities, that is key.
Just having a cloud data backbone itself, those are table stakes. Everybody has to have that. But I want to make sure that you know that everything you just saw in Fusion 360 is built on top of a multi tenant cloud platform that enables that data to flow seamlessly across the entire workflow. Those are table stakes, but they do break barriers that we've historically seen. Historically in that serial process, you're emailing files around and losing versions.
It's kind of chaos in a lot of regards. In Fusion 360, the data is in the cloud and it flows seamlessly throughout the process. Now, the mechanical notion of what we've done here or the technical side of it is a big deal in and of itself. It's very disruptive. But the business model that you see in the design and manufacturing space tends to be just as old as the technology.
It's been pretty much the same business model for 25 plus years. In fact, if you went out to our competitors and amassed all of the technology required to execute those videos, not only would you be buying from all of these folks, you'd have a very disconnected workflow and it would cost you upwards of $50,000 with the hopes of accomplishing something in the future. Now the Fusion 360 business model, we believe, is the business model of the future. You have a low entry point to get access to all of the capabilities you need to do everything you saw in those two videos. $4.95 per year per user gets you access to those capabilities.
Now we do have extensions on top of that for those users who need advanced capabilities. And then generative design is consumption based pricing. So you don't pay for it upfront in the hopes of achieving an outcome. As you achieve those outcomes, you pay. Low entry price to get access to all of the capability and then you pay for outcomes.
This is the business model of the future. This is the one that partners with the customer and drives their success. It's been very, very popular. Okay, so we've shown you this chart of monthly active users for the last couple of years. So I wanted to obviously show you the continuation of that.
We've seen continued growth in our monthly active users. So I want to reveal to you the number. At the end of Q1, we had 645,000 monthly active users. Okay, this is a reasonably young product. We've had it for the last 6 years or so, and we've already amassed 645,000 monthly active users.
Now compared to the numbers that you might hear from some of the others trying to enter kind of this future space and kind of piecemeal ways, if you will, this dwarfs anything out there. Fusion 360 is helping our customers respond to those secular pressures and the adoption and the growth in that adoption continues to show it. So let's take a look at some of those companies. Festool, I just showed you a couple of videos where they're doing awesome work leveraging Fusion 360. They used to use Creo from PTC, but they recognized that that wouldn't help them get to the future where they need to be.
So they saw CAD electrical capabilities and manufacturing capabilities all inside of Fusion 360. They swapped out Creo, they went to Fusion 360. Shaw Flooring, one of the world's largest flooring manufacturers. Now, this is also a long time Autodesk customer. We have a great relationship with Schall that goes back years years.
But they wanted to bring in some collaboration capabilities and they thought Onshape might be the way to do that. They quickly figured out that Fusion 360 not only had that cloud data backbone that they were seeing in Onshape, but it also had the actual capabilities of conceptual design, mechanical design, simulation, manufacturing, all built on top of that cloud data backbone, that's what they needed. They bought 50 subscriptions. Gibson Guitars, one of the world's most recognized names in music, used to use SOLIDWORKS and Rhino for all of their shape descriptions and design. But when they saw the electrical CAD integration inside of Fusion 360 having those mechanical and electrical capabilities, they quickly moved over to Fusion 360.
Now one of the interesting things here is that the business model with SOLIDWORKS was limited to them. They could only have 5 users on SOLIDWORKS, and they moved to over 20 subscriptions of Fusion 360 out to every one of their engineers and they moved away from this model where they were just sharing licenses back and forth. So driving a lot of efficiency in their operation. Fast Radius, this is a manufacturer of the future. These guys are exciting.
This is a 3 d printing shop where you send them your work and then they basically send you a finished product back. They used to use SOLIDWORKS. About a year ago, they added 18 subscriptions. Q1, they added 25 more. Q3, they added 25 more.
Q4 they added 50 more, they have 118 subscriptions to Fusion 360 now and they're doing it because of the complete end to end workflows, including additive capabilities. And let's not lose sight of education. Last year, I talked more about education. We have continued to see great adoption in education, and Fusion 360 just works the way these students think. And the intern at Airbus was no different.
And the intern chose Fusion 360 for his hydrogen powered octocopter drone because the generative capabilities helped him explore thousands and thousands of options in the time that the historical means would have let them only explore 1. Fusion 360 is the choice for the future generation of engineers. Now we talked about monthly active users, but we have never talked to you about commercial subscriptions for Fusion 360 before. So we wanted to change that and talk about that a little bit this year because it was something that we're really excited about. Now this star shows where we made a small investment in go to market for Fusion 360.
And what we wanted to do was test the market's willingness to pay for Fusion 360. And you can see by the other side of that star that they responded. And I'm happy to tell you, I'm going to tell you for the first time ever how many subscribers we have on Fusion 360. And right now, we have around 85,000 paid subscribers on Fusion 360, right? So usage is one thing, 643,000 users, a lot of students in that.
So you can tell that the future generations are preferring Fusion 360, but we're also showing that the market prefers Fusion 360. These are 85,000 paid subscribers. So compare that to any numbers that you see from anybody talking about a future solution in this space, this dwarfs any number that you'll see. It's not even close. Fusion 360 is the future.
Okay, so let's go back to this cloud based data backbone that I touched on. This is a big deal, so I want to make sure that we don't lose sight of it. It's not just a big deal for Fusion 360, 60, it's a big deal for all of Autodesk as well as the entire market. So remember, Forge is available and attractive to not only internal to Autodesk, but also our customers are really starting to leverage it to bridge workflows and their internal processes as well. And let's not lose sight that it also gives us the ability to drive a third party ecosystem as well as deepen strategic partnerships with companies like ANSYS and Apriori.
So with ANSYS, with Forge, they're able to get direct access to that same Fusion data model that Fusion itself has access to. So, you know, ANSYS is a preferred supplier in the simulation space and now we're able to partner in ways that we've never been able to partner before. And the same goes with our priorities, bringing in costing data, really building out this robust workflow all on that common cloud data backbone. So, Forge is a big deal for us moving forward as well. I want to make sure I gave you some insight into how the Fusion 360 workflow is really being made possible.
Now last year, I talked to you about traffic flowing through Forage just to show how it's maturing. We had about 45,000,000,000 annual calls this time last year, and I told you that doubled over the previous year. I'm telling you again, we doubled it again. So over 90,000,000,000 calls went through our Forge platform. So an API is basically software talking to software.
So it's a good placeholder for traction in that cloud platform. So we're really happy about that. Okay, you can tell we're excited. And why are we excited? We're excited because we are positioned to win.
We know our customers are going through these secular pressures, these secular trends that they're having to respond to. We've made a big investment over the years to help them respond. We knew this was coming. So we're excited because we are positioned to win and we're seeing that traction. It's a big growth opportunity, dollars 33,000,000,000 over 29,000,000 professionals.
We're excited. It's a big opportunity. This is a market that's poised for disruption. The technology a lot of these companies are using is 25 years old. The business model, 25 years old.
It is time to change and Fusion 360 is ahead of the curve. And we have traction. We've been at this for a few years now. We are not just getting started. We have over 85,000 paid subscribers.
This is not just usage, these are paid subscribers. So we have exceptional momentum. You can see why we're excited. Hopefully, you're as excited as we are about it. Okay, thanks so much.
I look forward to the questions that you have in the Q and A. But now we're going to take a short break and when we come back, we're going to hear from my good friend and colleague, Steve Blum. And Steve Steve is going to talk to us about what we're doing out in the field to realize the full potential of the growth opportunities we have. Okay, well, see you in a few minutes.
Okay. Welcome back, everyone. I hope you had a refreshing break. As Scott mentioned before the break, I'm Steve Blum, and I am looking forward to sharing with you how Autodesk is delivering growth in FY 2021 beyond.
So today, I want to step you through 3 key things. I want to give you an update on our customer engagement strategy and how we continue to evolve our go to market segmentation approach in engaging with customers. I'm going to give you an update on our non compliance strategy of monetizing non compliant users and accounts. So Lisa share with you the size of the opportunity earlier. I'm going to give you an inside view of how we go about monetizing those users and accounts.
And I'm going to give you an update on our partner strategy as I always do. All right. So let's first start with an update on the customer engagement strategy and our go to market engagement model. Over the last several years, we've been talking about our continued expansion of account based sales, marketing and customer success. And we've been doing that through field based sellers with named accounts and mid market accounts.
In FY 2021, we've introduced a third account based sales and marketing segment, which we're calling strategic territory accounts. And these are accounts that are going to be called on by inside sellers, but those inside sellers are assigned specific accounts as opposed to a geographic territory. So we'll now have named accounts, mid market accounts and strategic territory accounts where the sellers whether field based or inside based are assigned accounts as opposed to territories and they work collaboratively with their account based marketeers that have account specific marketing messages and an engagement model for the entire customer success lifecycle. We continue to have territory accounts as well and they are geographically arranged and supported by our inside sellers and our inside sales hubs. Now for all 4 of these go to market segments, we combine both human touch and digital touch.
Of course, in the account based sales and marketing approach, we have higher human touch and lower digital touch, where the opposite is true with our territory accounts, where there we have a high degree of engagement with digital means and a much lesser degree of human engagement. But we do apply both human and digital engagement for all 4 of the segments. So even in named accounts, we are applying digital touch points to stay engaged with all of the users within each of the named accounts. Our partners play a role in each one of these segments as well. In named accounts where we're selling enterprise business agreements and we're selling them direct to the named accounts, we are working collaboratively with our partners to have them do some of the service delivery.
So they help execute on some of the customer success plans that are attached to our enterprise business agreements. For our mid market strategic territory and territory accounts, our partners play a bigger role. That's where they're actually driving the sales process. Most of the transactions in those segments are done through our partners indirectly unless they're done on the e store. And our partners are taking the responsibility of driving services at scale and delivering customer success at scale.
Digital sales used to actually be called out as one of our go to market segments, but we realized it's merely not a segment, it's an approach and it applies in all 4 of our go to market segments with the highest degree of digital sales happening with our territory accounts. But even in our account based sales and marketing segments such as even named accounts, we do find there are situations where named accounts will have individual users purchase on our e store for some incremental license requirements, especially if they're not on an enterprise business agreement. So earlier today, Jeff gave you an update on the different subscription plans and we now have 3 different subscription plans that we're bringing to market. These subscription plans are pretty aligned with our go to market segments. So, our enterprise plan, which is a component of our enterprise business agreements is very much aligned with named accounts.
And when we do it in our enterprise business agreement with the named account, we build out a customer success plan that's delivered on and owned by our own customer success managers and designated support specialists. The new premium subscription plan that we're rolling out here in June is really targeted to the mid market. And the implementation delivery of it is done collaboratively with some onboarding specialists from Autodesk, but a lot of the infield in front of customer implementation being done by our partners. The standard subscription plan is continuing to be focused on for our territory accounts and our strategic territory accounts and that's where our partners take the lead on delivering in field support. And we take an at scale approach digitally from Autodesk and apply our own human resources, our customer success specialists, when we recognize that a company may be at risk of non renewing.
We want to make sure that we get them to a healthy space overall. So here's how that at scale customer engagement model works. So when a customer first purchases a new subscription, we're going to have a digital outreach to them and we're going to help them go through an onboarding process to get them up and ready and to help them understand how to access all the benefits that the subscription plan has for them. Then together with our partners, partners doing things out with the customers in the field and through our own digital means, we're going to have persona based experiences and content that we'll be sending out to all of our users. So help them basically understand how to become more productive and more proficient with the use of their subscriptions.
We'll continuously be evaluating the health of all of our customers through our early warning systems. And when we recognize a customer may be at risk of not renewing when their contract expires, we will ask one of our own customer success specialists to engage proactively with the customer to see why are they falling behind or where may they not be having the great level of success we'd expect them to have and to help those customers drive back on a strong adoption curve and be in a strong and healthy position to renew their contract when their contract comes up for expiration. And we've been having great successes through our account based sales and marketing approaches overall. And I wanted to give you one example of that today. So I'm going to share with you a little bit about Arcadis.
Arcadis is a leading global design and consultancy firm and they're one of our named accounts. And in fact, they've been in the program for a while and they're already on an enterprise business agreement. Through execution of our customer success plan as part of the enterprise business agreement, we've been providing them with insights on how to transition their different teams and projects and locations around the world from 2 d to 3 d, as well as implementing some new methodologies such as generative design or moving most of their projects to building information modeling. They have an enterprise business agreement. So as a result, they have access to all of our software, but they are large users of products like Revit, Civil 3d, InfraWorks, BIM 360 and Fusion 360 now as a result of focusing on implementing generative design.
One of their key goals, one of their business outcomes they're looking to strive for is to become a digital front runner in their industry and they're relying upon us as a partner to help them go through a digital transformation process so that they are positioned for success and gain a competitive advantage in their marketplace. And the relationship has really grown to a point where it's very, very healthy, and we've had some great successes with them. And as a result, when their contract came up for renewal this past year, we were able to renew it with a healthy growth of billings being over 50% larger than the prior contract. So once again, we're showing that by developing these strategic relationships with our customers, by focusing on their business outcomes and by executing on customer success plans, we can help them have more success in their industry, which produces more rewards for Autodesk as well. Okay.
Now I'm going to move on to our non compliance strategy and how we're focusing on monetizing non compliant users and accounts. Now this has been a multiyear strategy and a multiyear journey. We've been sharing with you the progress as we've been working our way through each of the steps. If you recall back in FY 2019, we focused on identification. What can we do and how do we identify where non compliant usage is occurring?
And we did that through capabilities we built into the product through a beacon that identifies when a license is a non compliant license. Last year in FY 2020, we started to enhance our usage of that data and also grew our capabilities of messaging and products so that we could make non compliant users aware that their licenses were non compliant and we can start messaging how to rectify the situation or what ramifications would be if they did it. Our focus for FY 2021 is to drive scale on the approach and to increase and ultimately accelerate the number of engagements through optimized programs so that we can get them more non compliant users and accounts than ever before. We have multiple ways of engaging with non compliant users through this process. We get to all non compliant users where we have products available in market that have the in product messaging capability.
So anywhere around the world where we have introduced in product messaging, we can communicate with those non compliant users, even if we can't identify specifically who they are. Now when we can identify who they are, we can identify what accounts they're a part of, we can then email them because now we have that contact information. Then we can have outreach that provides them with their usage data. We encourage all non compliant users through the engagement process to do a self audit So they can identify for themselves where non compliant or non genuine software is being used so that they can go off and buy genuine software on their own. And when we have larger accounts that we can identify, we hand over those that information to our license compliance team so they can engage directly with our end customers.
Now I will mention that during this unusual time of the COVID-nineteen, we've asked our license compliance team to take a softer, more gentler approach right now. But they're building a very large pipeline of opportunities that they will reengage with as we get to the other side of some of the challenges all companies are facing right now. When we identify a non compliant user, but we cannot identify what account or company that user works for, we work through this workflow. Once the license recognizes, hey, this is a non compliant license, we can begin the in message in product messaging. And we've shared with you what that in product messaging looks like with few examples here.
So these are examples of a non compliant user of AutoCAD, where we're first telling the user, hey, it's non compliant usage, You should go to our e store and buy a genuine copy of the software. And they continue to use it. We remind them that they're going to lose access to their copy of AutoCAD and eventually we actually turn off the access. And the goal here is to direct them to our e store to purchase genuine software. Sometimes they actually opt to call a local reseller and purchase the software that way.
That's just fine with us. That's still a monetization event. We've been driving momentum and growth in our ability to drive these digital conversions and we're now at a point where we can message in product within 40 countries around the world. And we can message in the 6 key products that basically amount for over 90% of all non valid licenses that are detected. What's interesting is when we convert these non compliant users through these digital means, the product mix for the non compliant sales conversion is pretty much similar to the product mix that we have for our overall sales of products.
So people are converting to the products they're using, not just the lowest cost products available. And here's five examples of completely digital campaigns that yielded results where we went from identification all the way through monetization. And you can see it, we have 5 different countries represented. License totals vary from in these five examples, 100 licenses down to 5 and you can see the products that were purchased. They include things like AAC Collection, AutoCAD and AutoCAD LT and Revit.
So again, we're having great success here. We're going to continue to scale this. When we identify non compliant users and we can identify what company or what account they work for, then we can collect more data and we have more insights that we can use. And at that point in time, we can actually reach out with emails to share with the users in that account the non compliant usage information. And for the larger accounts, we turn that information over to our license compliance team, where they'll engage directly with the customer to help them convert from non compliant or non genuine software to genuine software.
Their goal as it is with all of our customer companies that are using non compliant software is to educate them on the value of using genuine software. Now again, we can identify very small accounts as well that are non compliant. And for the small accounts, we direct them to the e store to make their digital purchases or to a reseller. Throughout FY20 on the earnings calls, we talked a lot about the successes we're having in driving growth and scale in our license compliance sales teams conversions. And in fact, throughout FY 2020, we had approximately 3 times the number of non compliant license deals that were $500,000 or above.
And I don't know if you're wondering, well, how do you do that? Well, we do it through a couple of different vectors. First, we've been investing in this area and we added approximately 25% more license compliance sales headcount onto the team during FY 2020. And while we've been doing that, we've continued to refine the analytics and the analysis and the end product messaging, which has reduced the average cycle time for converting a non compliant user to a genuine piece of software by about 30%. And when you increase capacity by approximately 25% and reduce your sales cycle time by 30%, you can drive about 3 times the number of large transactions.
So we've had a really great result there, which we're going to continue in FY 2021 and beyond. Here's one example of one of those conversions. It was for a very with a very large company in China. Once we identified their non compliant usage, we reached out to them and we're collaborating with them. And we help them recognize that they were putting their own business at risk.
By using non genuine software, they were actually not protecting their own IP, which they found to be a large risk that they could not afford. And as a result, they worked with us to buy genuine software, which resulted in a $2,800,000 deal, which included 3 year subscriptions of AutoCAD, 3ds Max and Maya. So again, this is just a great representative example of the kind of conversions we can drive when we have the data and we use our license compliance team to engage directly with the end customer. Okay, let me move on now to our partner strategy. In FY 2021, we've rolled out one global framework and I've been giving you updates through the last numerous years about how we've been evolving our partner framework and driving representing all the key things we want to engage how we want to engage with our partners in 1 program.
And those programs focused on driving growth in new business, expansion in our existing accounts as well as driving high revenue retention rates and also in sending our customers to invest. And we need them to increase their focus incent and reward our partners just not on transactions, but on incent and reward our partners just not on transactions, but on value based activities. So our performance incentives in this new FY 2021 global framework are focused on rewarding new business, really driving expansion within the existing accounts and high revenue retention rates. We've continued down the path of moving more of the partner incentives to the back end. So we can actually attach those incentives to quarterly growth targets.
So an incentive focusing on growth. We can put some of those incentives on value added activities that produce better results in our renewal rates by focusing on adoption mid term within contracts. And we can reward partners for overachieving against their targets by giving them progressive payouts. We are ending the sale of maintenance as we've announced already publicly. And as a result, we want all of our partners to focus on moving the remaining maintenance companies over to subscription.
So we're no longer paying back end incentives on maintenance this year. But we are introducing our brand new premium subscription plans, which we think our customers are going to love. And we know our partner is going to play a key role in both selling and supporting those premium plans. And of course, we're going to be incenting and rewarding our partners for the sale and implementation of those plans. As I mentioned, we need our partners to continue to add more resources, especially selling resources and customer success and consulting resources.
And we build out a co funding plan. So when our partners add resources in particular areas, we can co fund the 1st year of those investments. And overall, we're incenting our partners to add more resources because there is more total dollars in the partner ecosystem than we've had in the past few years. We also are investing in partner enablement and focusing on building out capabilities within our partner community to drive adoption and effective use of all of our subscriptions. We're holding quarterly workshops that focus in on core consulting skills and deliveries such as BIM deployments or leading discovery sessions to find new workflow and work stream opportunities within our partners' customers.
We have introduced a partner services hub, which has downloadable consulting IP. So you can see an example of what that looks like here on the right side of the slide. Our Autodesk Consulting Services teams have continued to build out world class IP through the consulting deliveries they're doing with named accounts. And we now have the team focusing on packaging up that IP and making it available to our partners so that they can build out their own consulting practices and customer success practices. And we continue to invest in skills training to help our partners focus on specializing in particular industry workflows.
We've also added new partners into our partner ecosystem, a new type of partner. We're introducing new global system integrators that are services only partners. They're not interested in buying and reselling the software. They just want to actually sell high value services and do system integrations around the sale of Autodesk software done by either Autodesk directly or our partners. And then we think this is a great success for our customers, for our partners and for Autodesk.
And the one example I wanted to highlight is the relationship we've built with Capgemini. They've built a forge based solution approach doing system integrations and digital transformations and in fact they've even integrated in their own Reflect IOD offering, which is a cloud enabled platform for building and infrastructure operators. And this all sits on top of Ford. So, they're adding significant value in certain industry segments where they're experts overall. And we see this as a win again, as I mentioned for everybody.
And they're very excited about the business and the business relationship with Autodesk and they're continuing to add more resources to build out their own Autodesk Consulting business. Finally, just a quick update on the scale and coverage that we're getting from our partners around the world. We currently have approximately 1300 reseller businesses around the world, representing Autodesk in approximately 175 different countries. And I wanted to highlight a new scale metric for you because in the past I focused pretty much just on sales resources. For every Autodesk sales resource, how many selling resources do we get through our partners.
But selling resources are not the only critical success resources anymore in our world. We need to have sales resources, technical resources, customer success resources and consulting delivery resources throughout our partner ecosystem for us to continue to drive growth in a scalable fashion. So, I am now measuring the number of partner employees that focus on sales, technical sales, customer success and consulting deliveries compared to each one of those people I have at Autodesk. And we have about 3.5 times the number of people that are paid for and represented by our partners compared to every employee I have at Autodesk. And that's great scale and we expect that to continue to improve over time.
So to summarize, we are well positioned to drive growth in FY 2021 and beyond. We know that there's some challenges out in the marketplace, but through leveraging and working through our account based sales and marketing and customer success approaches, continuing to build strong long lasting strategic relationships with our customers. We're continuing to monetize our non compliant users and accounts and that's a big opportunity for growth, not just in FY 'twenty one, but for many years to come. And we're continuing to work very collaboratively with our partners to focus on driving expansion and growth within their accounts as well as high net revenue retention rates. So thanks again for joining me here today.
And it is now my pleasure to introduce to all of you Autodesk's CFO, Scott Herring.
Thanks, Steve. Today, I'll walk you through 3 main areas. First, we'll reflect on our journey through the business model transition and how we delivered on our promises. 2nd, how we've built a resilient and well diversified business. And third, how we're well positioned to deliver sustainable growth in the long term.
Before I dive in, I'll reiterate our recent guidance for fiscal 2021, no change from what we shared last week. Okay, on to the first chapter. Here we'll look back on our performance during the business model transition, discuss how we were able to deliver on our promises and talk about how our focus on key metrics has changed as we've exited the transition. Fiscal 2020 was the culmination of a successful period of transition for us. We delivered outstanding metrics, not just because we were able to execute, but also because we're able to adapt along the way.
We went from being around 40% recurring to 96% recurring revenue over the space of little more than 4 years. We grew revenue and billings to all time highs and delivered a free cash flow number that more than doubled our previous record. And as you look closer at our free cash flow trend, what stands out to me is how remarkably close line is to our initial projections at the beginning of the transition. Again, that wasn't luck. It reflects our ability to drive results amid dynamic conditions and as Andrew referred to earlier to adapt accordingly along the way.
While free cash flow was a primary focus for us, ARR was also a key measure of success during the transition and the tremendous growth we saw was also in line with our initial projections. Here you can see how our business pivoted away from maintenance and towards subscription at a steady pace through the transition. While ARR was a key focus for us during the transition, heard us talk recently about the limitations of ARR and the volatility caused by ASC 606 accounting rules. Looking back, you can see that the reported revenue was still very lumpy in the early part of our transition and the ARR metric gave you much better insight into the mechanics of the transition. But now that 96% of our revenue is recurring, it no longer provides you any more information than total revenue.
So we'll stay focused on revenue going forward and should you need to derive ARR, it's simply done by multiplying the recurring revenue by 4. Another metric you've heard us talk about more recently is remaining performance obligations or RPO and in particular current RPO. RPO is a measure of the volume of the business we've transacted that hasn't yet been reflected in the P and L. It fuels future growth in revenue. At the end of fiscal 2020, we built up well over $3,000,000,000 in RPO with around $2,400,000,000 sitting in current, which will flow into revenue in the next 12 months.
Speaking of new metrics, we'll be focused on going forward. As we evolve from a company and transition to a growth SaaS business, the key metrics we focus on are changing. Our prior focus on metrics like ARR, subs, ARPS, M2S and spend will be deemphasized. These metrics served us well during the transition, but have less relevancy today. Instead, we will increase focus on metrics like revenue, net revenue retention rate or NR3, RPO and current RPO, free cash flow and operating margin, which are more relevant indicators of our performance in this new growth phase of our business.
While we're proud of the results we delivered during the business model transition, it's important to reflect on how we've also built a resilient and well diversified business. Current economic environment is challenging for everyone. Our business is much different than it was back in 2009 though during the global financial crisis. In fact, our business is far more resilient than it's ever been. We have a business model which is 96% recurring revenue.
Our customers need to stay current on their subscriptions if they are to keep using our products and the increasing secular and countercyclical facets of our business will buffer us even during a downturn. We're well diversified across a number of different vectors, including geography and our product families. This diversification mitigates our exposure to the impact of localized downturns in specific countries or markets. In addition to geography and product families, we also have diversification across the types of customers and industry segments we serve. As we highlighted in our recent earnings call, less than 15% of our revenues come from small businesses.
The industries of our customers are also wide ranging. And while this level of diversification helps minimize risk, it also puts us in a unique position to help customers benefit from the convergence of processes and technologies across these industries. Recently, we've seen plenty of volatility in the various economies around the world, giving us the opportunity to demonstrate our resilience. Last year, we called out 3 specific markets which were exhibiting signs of instability: Germany, the UK and China. Here's a view of what we saw in Germany as their economy struggled last year.
Despite the economic challenges faced by our customers in that region, we saw total product subscriptions as well as multiyear subscriptions continue to grow in our design business, which is extremely encouraging. Same was true in the UK where the pace of growth slowed a bit starting back in calendar 2019, probably due to Brexit concerns and our business continued to grow despite the macro and geopolitical climate there. And finally, the picture is similar in China, which represents a small part of our overall business, but is a very large and growing economy. You can see our business also performed well there before hitting some headwinds driven by both the trade slowdown between the U. S.
And China and the impact of the previous multiyear promotion coming up for renewal in Q3 of fiscal 2020. So what about this year against the backdrop of the global pandemic? Well, despite downward pressure on new business, our renewals business held up remarkably well. And because the majority of our business is renewals, we saw the total product subscription counts still showed modest growth during these unprecedented times. Here's a magnified view of the Q1 by week and extending into the 1st 2 weeks of May.
Again, despite the tremendous challenges faced by our customer base, we were pleased to see total product subscription counts grow during this period. And that speaks to the criticality of our products and helping our customers achieve their goals. This chart highlights 3 key phases we saw in the quarter: pre COVID performance, sales performance at the peak of COVID shutdowns and finally when parts of the world started reopening. As you can see, we continue to grow our subscription base through all three of them. Let's take a look.
As you can see through week 7, we kept growing strongly as momentum from Q4 continued and all of our regions and product segments kept performing really well at this time. China was dealing with the impact from COVID, but it's a small part of our business and you cannot even see its effect on our overall business. Then around week 7, various parts of the world started to enter into lockdowns and our new business started to be impacted, while renewals held up well even in this period. And you can see the slowdown in new business started to impact our pace of growth, but the growth never stopped. Let's pause for a second and think about that.
Almost the entire world was shut down. It was impossible to step out and meet customers and companies were struggling to enable their employees to work from home. In that background, our total subscription count kept moving higher. We continue to benefit from the adoption of our cloud enabled products, our hyper local presence via partners, our strong customer relationships, our online presence and the stickiness of our solutions. The slope of this curve during this period underscores the resilience and strength of the business model we've built over the years.
And now moving to the last phase starting around week 12 of the quarter and continuing into the early parts of May, This phase coincides with businesses beginning to reopen in parts of the world. Our business accelerated as different economies reopened. The acceleration we saw was not just a quarter end phenomenon, but continued into this quarter. Many of you have asked us what gives us confidence that we can benefit from economic recovery and demand is not lost, but delayed. The trends you see here are very encouraging and support our view.
In summary, what this slide indicates is first, we have a resilient business model that can withstand extreme economic dislocations like those that we just went through. 2nd, strong renewal rates at such a large base offers a great foundation for us to build on even when new business experiences headwinds.
And finally, demand that
is being impacted in the current environment is not completely lost. As businesses return to work, they are buying our solutions due to their strategic importance to our customers. In addition to our more resilient business model, we're now far better positioned to benefit from countercyclical and secular drivers, particularly in our growth businesses. Our increasing footprint in these end markets will drive growth in the long term that is less sensitive to economic cycles.
You heard the rest
of the team talk about how we're well positioned to benefit from the significant opportunities in infrastructure, construction and the convergence of design and make and manufacturing. These are all markets in which we have a strong competitive foothold and can buffer any wavering economic trends. And lastly, we continue to have a big opportunity to convert non compliant users. While you saw us take our foot off the pedal last quarter, the work to monetize the base continued. We expect to continue benefiting from this as soon as business activity normalizes.
Resiliency also comes in the form of a strong balance sheet, managing our share count and a disciplined approach to capital allocation. We continue to be committed to supporting the growth of the business both organically and inorganically, while managing share count solution through our effective stock buyback program. Now let's talk about how we're well positioned for sustainable growth in the future. First, despite our fiscal 2021 results being impacted by COVID-nineteen, we remain confident in meeting our fiscal 2023 targets. These are the same targets we shared at our last Investor Day, but note that we have reframed our previous ARR target of $5,600,000,000 into the corresponding revenue range.
Through fiscal 'twenty three, we'll grow revenues by 16% to 18% annually, achieve $2,400,000,000 of free cash flow and drive operating margins to approximately 40%. We'll also balance growth and profitability yielding a combined revenue growth plus free cash flow margin of between 55% 65%. Last year, we showed you a framework for the key drivers of revenue growth over the coming years. Here's an update on that view. We segregated the drivers between volume and price to illustrate that our overall growth will be balanced across these two variables.
Aside from that, you'll notice that the growth drivers and their relative contribution are largely unchanged from last year. And while we are committed to growing revenues, cash flows will continue to be a primary focus as well. In growing our free cash flows to $2,400,000,000 it's important to highlight the relative contribution from net income increase as we go forward. Growth in deferred revenue will remain a meaningful driver of free cash flow, but net income will play a growing role in driving our cash flows. To summarize our confidence in achieving our fiscal 'twenty three targets, here we highlight several key elements.
First, it's clear the world is moving toward
Customers
are very Customers are very sticky. We have strong momentum with converting non compliant users and that will continue. The opportunity in construction is significant and our broad product portfolio is a key differentiator for us. We've proven our ability to manage our expenses effectively as we head into a period of target investments. And finally, our ability to forecast over a multiyear period has continuously improved.
We've talked a lot about growth through fiscal 2023 and how we will get there. Let me spend some time on how to think about our business beyond fiscal 'twenty three. Many of the growth drivers we have talked about for fiscal 'twenty three will remain in effect significantly after that as well. Some of these are applicable to the overall market, but majority of them are specific to Autodesk that will help us deliver growth significantly above market levels. Looking at the overall market, AEC is ripe with opportunity.
BIM mandates continue to drive market opportunity and overall penetration remains low. Infrastructure investment is on the rise due to the need for both new assets and the repair of existing assets as Lisa pointed out. And urbanization, sub urbanization trends will continue. Manufacturing is also evolving, products are getting smarter, manufacturing processes are digitizing and supply chains are quickly being reconfigured, all of which generates incremental growth in the manufacturing market. In terms of Autodesk specific drivers, monetizing non compliant legacy users, you heard today about the size of this opportunity and how we're well positioned to capitalize.
Our increasing ability to leverage intelligent usage data, close license compliance deals and make advances on multiple fronts, as Steve mentioned, will fuel ongoing momentum. The accelerating digitization in AEC, you also heard from Jim about how we're uniquely positioned to capture the opportunities in AEC, leveraging the breadth of our portfolio and our international presence. And on the convergence of design and make and manufacturing, as you heard from Scott Rees, as manufacturing reinvents itself, our comprehensive cloud based solutions, the deep connection to BIM and the related convergence of industries and our flexible business model will enable us to win in the long term. And with that, we're confident of double digit growth beyond fiscal 2023. And as you think about your peak times Q models, it's important to emphasize that this growth is supported by both volume and pricing drivers.
Again, we have Autodesk specific drivers and overall market drivers. On the overall market, we'll continue to benefit from the underlying growth of 4% to 6% out into the longer term. Autodesk specifically from a volume standpoint will continue to gain share from our competitors as a result of the investments we're making. We've shown you the massive opportunity to convert non paying users and this will continue into the long term. And we will get volume expansion in construction and manufacturing.
On products that grow renewal base will yield increases in price realization. We'll continue to optimize product packaging and drive customers to higher value offerings. Jeff showed you some of the areas we're looking at evolving our business model such as our recently announced premium plans and we'll continue to drive toward a more evenly balanced channel mix that drives margins upward. So to wrap up, we talked about our successful transition journey and how we delivered on our promises made during that period, talked about how we built a resilient and diversified business, which provides a buffer against economic turbulence, and we talked about our ability to drive sustainable double digit growth into the long term and the multiple sources of growth that give us increasing confidence. Thank you.
And now I'd like to turn it back to Andrew.
Thanks, Scott. So to wrap up, I want to take you through a few things and summarize some of the important takeaways that you've got during this day. First off, I want to help you understand that Autodesk has an enormous opportunity in front of it. Not only do we have an end market in design and make that's worth over $69,000,000,000 from a software perspective, but we have 14,000,000 users that are not paying us in our installed base right now, 14,000,000. So between these two things, there's a huge opportunity for Autodesk to grow today, tomorrow, up to FY2023 and well beyond.
I also want to reiterate what our fiscal 'twenty three targets are. 16% to 18% revenue CAGR, dollars 2,400,000,000 in free cash flow, roughly a 40% operating margin and again a sum of revenue growth and free cash flow that stays between 55% 65%. We are confident in these targets at this point and I want to make sure that you understand that it is our goal to achieve these to the same degree that we achieved our FY 2020 targets that we set over 3 years ago. We also spent a lot of time talking about why we will deliver in FY 2023 and beyond. And I want to remind you of some of these things and just kind of encapsulate a few of the important details that you heard from the team today.
First off, we have a much stronger ability to forecast our business over a multi year timeframe. It's increased. Don't have the complexity of the business model transformation anymore and we have a lot more understanding and depth with regards to how our business functions. We have also built in a very agile and adaptable organization. Not only we're able to adapt and change during the business model transformation, we've certainly proven our ability to adapt and change during enormous shocks like the COVID-nineteen crisis that we're in right now.
We also have confidence in our long term growth drivers. In fact, we have more confidence in our long term growth drivers now than we ever did before. And we spent a lot of time talking about where the growth will come from and how it's driven by these drivers. And again, to summarize, what are they? Monetizing non compliant and legacy users.
The accelerating digitization in AEC, it was already accelerating before, it's going to accelerate even more as we go into next year. And this convergence of design and make in manufacturing. And to help you understand that, we highlighted not only how we have greater understanding of the non compliant user base and how we're able to target them with a lot more fidelity than we ever were able to do before. But you also heard from Amy, how we're modernizing our products so that people do not want to be left behind. The products of the future, even in our core portfolio are going to be radically different than the products of today.
We also spent a lot of time talking about winning in construction. Jim helped you understand how the leadership of design and BIM is critical to how Autodesk has been executed in this space. In the end, the model is ultimately going to be the driver of value in the AEC space. The breadth of our portfolio, it spans from the office all the way to the field and allows us to touch every aspect of the process, particularly in critical high value processes like preconstruction. And you also heard about the global presence and support we're building around our construction ecosystem.
The Autodesk Construction Cloud is going to be the premier solution for helping customers in the AEC space fully digitize their design through construct processes. This is the future and we've invested heavily in it and I hope you got a lot of confidence from Jim about what we're doing and where we're going. We also spent a lot of time talking about how we're bringing design and make together in manufacturing in the cloud with a fully unified end to end solution for design and make with an incredibly robust multi tenant cloud layer built underneath it. We also made it increasingly clear how our leadership position is growing and getting firmer. It's a $33,000,000,000 opportunity.
The market is poised for disruption and we have more momentum than anyone else in the space with over 85,000 commercial subscribers for Fusion alone. So when you look at these long term drivers, you can see we're already off to a great start. You can see that these are the same kind of drivers we've been chasing for 5 years, just moving faster. The monetization of non compliant users, the acceleration of digitization of AEC and the convergence of design and make and manufacturing, All of these things are going to be moving faster and they're all now sitting on a backdrop of resilience. Our customers want to know their business is going to be resilient in the future and that they can help their customers have impact and build resilience into their businesses as well.
And that's why we're working so hard to enable our customers to design sustainability and lead by example in the ESG space so that they can see where we're going and be the same model for their customers. And that's why over the next few years, you're going to see us emerge as the leader in design and make. And with that, I'd like to turn it back over to Abhay for our Q and A.
Thanks, Andrew. And thank you everyone for joining us for the Q and A session. Hope you found the presentations useful. And if you haven't already, please submit your questions through the Q and A link on the web client or email them to Shannon Iden or me. So Andrew, our first two questions come from the virtual first show from Dave Lee Shower from Griffin Securities.
First, Autodesk is on a trajectory to activating the equivalent of over 1,000,000 licenses a year and your active base made by our estimates exceed 8,000,000 by fiscal 2024. Will you have the requisite infrastructure capacity for that volume? And relatively, when you speak of the eventuality of a consumption model, do you mean a consumption only model or will it be a hybrid? Andrew?
Okay, great. Thank you, Abhay. Thank you, Jay, for that question. Always first. First off, let me address the first question.
The short answer to the first question about infrastructure is yes. Of course, it's a little bit more complicated than that, because there's yes that we've got a lot of the infrastructure in place now, but yes, we also have a plan to build out the infrastructure that we need to continue to build out. It's an area of investment for us. One of the proof points you want to pay attention to is the sudden surge in cloud based usage that we saw as we headed into the COVID crisis. We absorbed that surge with no perceivable downtime to the customer, total reliability throughout and ability to deploy onboarding efforts to a broad swath of customers in a very short period of time.
So that gives you a sense for how prepared we are for surges in volume. We've built a pretty robust platform to date. That said, there's more work to do. There's more work to do as we integrate profile and named users more deeply into our infrastructure. And we also have some work to do with regards to standing up additional sites, data centers in local geographies.
Now those are still data centers that we use through AWS, but that's part of our infrastructure expansion and the elasticity and resiliency of what we're doing. So we will be ready. We're aware of this and we've proven ourselves during this crisis. Now to your other point about consumption, our main goal here is to offer choice and flexibility. So what you're going to see is consumption is going to be one of the ways that our customers can choose to buy and pay for our software, this kind of pay per use model.
But it's going to be part of the broader portfolio of subscription offerings with various different terms that go from day to month to year as well as different capabilities that allow them to pay on a per consumption basis. So choice, choice is the key theme here. And I think our customers are going to be really happy with the world we're moving to and the variety of choice we're giving them in terms of modern cloud based approaches to business. And by the way, Fusion is front and center, a shining example of this brave new world.
Thanks, Andrew. The second one for you and Steve. Could you comment on the role of tech data and the increasing percent of Autodesk's revenues from that relationship? And what do you think would be the net margin effects for Autodesk and resellers of your front end, back end channel compensation rebalance?
I'm definitely handing that question to Steve. I'm not going to comment on that at all.
All right. Thanks, Andrew. And thanks for that question, Jay. So a couple of things. 1, so for everyone's information, Tech Data is a distribution partner of ours.
So they're 1700 partners I mentioned in my presentation. But most of those 1700 are value added resellers. They're engaging with the end customers. They're doing solution selling and things like that. We have a much smaller number of distribution partners around the world.
In most of the markets around the world, we work through what's called a 2 tier distribution model, where our distribution partner purchases products from Autodesk and then resells them to our VARs who then resell them to end customers. And that's what Tech Data does. So we have a very strong and growing relationship with Tech Data. We've got a great relationship with a handful of other distribution partners as well. Tech Data has been expanding and growing and they actually have a global footprint.
And part of the reason that our overall business with them has grown is because they've increased their footprint and they're leveraging some common capabilities that have provided value to our VARs in different parts of the world. And so as our business grows, their business is growing along with us. As far as the changes in our partner programs, we don't talk about specific net margin changes and impacts to our partners or to ourselves. We don't set the net margins for our partners. Our partners ultimately earn their money based upon the value they're presenting to customers and the value that the customers are paying back to them.
But I do want to take this as an opportunity to talk about why are we moving more money to the back end. As I mentioned in the presentation, we can do multiple things. First of all, we can reward our best partners that are driving growth or driving the highest net revenue retention rates overall. And we can associate dollars to specific outcomes as opposed to them just being tied to any transaction that's being made. So our best partners win by having a value oriented approach to our end customers.
I also mentioned that we now have the ability by having dollars in the back end to start rewarding our partners on non transactional activities, things that are driving adoption. So Jeff talked a little bit about the pay per use and the pilots and things, and we have some partners that are helping to get those pay per use pilots set up, and we're rewarding them for getting those environments set up. It's a value added activity not associated with the transaction. So you're going to see us to continue the trend we've been on for the last several years of moving more of the partner incentives to the back end, so we can target them to the highest value activities and reward the best partners we have in our ecosystem.
Thanks, Steve. Our next question comes from Sterling Auty from JPMorgan. Andrew, you mentioned the 2,000,000 non compliant users that could drive growth for years. But if you add 500 ks to 800 ks per year, doesn't this get soaked up in just over 2 years?
Okay. I'll start commenting on that and then I'll pass it over to Sterling. Do you think all of our seats are coming from non compliant usage conversion? Honestly, I just have to poke at you about that one. There's new business growth built into these numbers and there's quite a lot of robust new business growth.
Remember, our price points have changed where customers are moving to our solutions. There's expansion in some of our key markets. The rise of BIM in various markets is leading people to relook at their solutions. There's real new business growth in here. Those seats you see us adding don't all come from non compliant activity or conversion of users into paying customers.
They come from general market expansion, share shift, our new construction solutions and things associated with it. Now with regards to how many we can actually could I let Steve comment on how the engine works and what the constraints are on the engine and how it will expand over time. Steve?
Yes. Thanks, Andrew. So, thanks for the clarification. We want to get to doing 500,000 plus in this area overall because it's a large base, but that's a very large number. As I mentioned earlier in the presentation, we really when we can identify who the users are in their accounts, so we actually know the companies they work for, that's when we can have outreach from our license compliance team overall.
And we're seeing great conversion and growth there. As I mentioned, 3 times the number of transactions that were $500,000 and above. And we're doing that by increasing our sales capacity and reducing the overall sales cycle time because we're getting more information, we're getting more analytics. So the constraint really how do we get to more of these folks is by continuing to work on our data analytics, by finding ways to identify more of the users and identifying them to accounts. Because when I actually say when we identify a user, but we can't identify them as an account, what I'm really saying is we know there's usage going on, but we have no idea who that person is.
We don't know who they are. We don't know who they work for. We don't know anything about them. But we're gaining more insights as we continue to build out our capabilities in product and match it up with our data sets overall. And as we continue to be able to correlate who those users are with accounts, our ability to reach out to them goes up and our conversion rates will go up.
So this is why we're on this multiyear journey overall. And as Andrew said, this is going to be one of the key elements of growth in our new business for many, many years to come.
Thanks, Steve. Our next question comes from Phil Winslow from Wells Fargo. So, early in the presentation, you mentioned that there were 1,800,000 legacy users. I believe that compares to the 1,700,000 that you discussed last channel, Day. Could you provide some color on those users?
And how do you think about the rate and pace of converting those active legacy users? Andrew, you want to take it?
Sorry, I was on mute.
Yes. Here
we go. Another Zoom cliche for the day, the first one. That's an excellent question. What I'm going to do is I'm going to immediately turn that over to Amy because I think she was the one diving deep most deep into this topic. So Amy, take it from
here. Thanks, Andrew. So it's important to understand that the legacy base is dynamic. Every year we convert some while also adding new users to this group. For example, any maintenance customers that churned in the past year was has been added to that cohort.
And another thing is that for the 1 to 5 year back group, we're actually measuring this group based on their usage of the product. And as I mentioned before, over half of the users are using the product more than 45 days a week. And in that group, most of them are even using 60 days a month sorry, 45 days a month. Now these are active users. So that means they're missing out on new desktop and cloud capability that's available in the current versions.
These are things like major performance improvements, generative design and all the cloud collaboration capabilities that require you to be on a subscription in the current version. So that's going to help accelerate people moving to the new version. Another thing is most of these users are on older file formats. So for example, we changed the AutoCAD file format about 3 years ago And these older file formats will age out over time and people will no longer be able to collaborate and work within their ecosystems as time goes by. So all of these things will help us move these users up to the current versions of the product.
Thanks, Amy. So we've got next couple of questions from Adam Borg from Stifel. Andrew, you mentioned confidence in fiscal 'twenty three targets assuming a recovery starts this year. How should we think about the fiscal 'twenty three target should the recovery not start this year?
Yes. Okay. So, first off, I'll let Scott answer part of this when I'm done, but I want to kind of start off with talking about where does the confidence come from and what are some of the factors that play into this. So first off, remember we're tracking our business very carefully by weekly active usage of our products and by new businesses and how it new business growth and how it cascades from areas affected throughout various stages of this crisis. As you might have heard us say several times, we said in the earnings call and we'll say it again, we've seen this as the as the crisis hits and a rise both in weekly active usage and new business as you head out of head into the later stage of the crisis.
And it cascades across regions. APAC, we're seeing recovery on those metrics. Europe, we're starting to see recovery. The U. S.
And North America, not so much yet. It's kind of hitting a stability point, but not turning up yet. That pattern gives us a lot of confidence because we know if we see a similar even if we see a resurgence in the fall, it's going to follow a similar pattern to that, all right? Matter of fact, we would hope that the governments and agencies involved will have better control on how the fall will unfold versus the initial reaction being caught off guard to some of these events. Now that said, I wanted to just add a couple of more things before I hand it over to Scott.
First off, we model in such a way that we don't need a full recovery in Q4 to maintain our confidence. We just want to see signs of recovery in Q4 to maintain our confidence. And I just want to reiterate, how can we be confident in our long term models? Remember when we began this journey, we were forecasting 5 to 6 years in the future. We built buffer into our models because we knew in a 5 to 6 year timeframe, there was going to be some kind of economic dislocation.
We were already well into an expansion that was going longer than previous expansion. So we thought about this as we went into our models and there's no surprise that we left room. Now Scott, I think you have some additional color you'd like to add to this.
Yes. Adam, I have I
talked in my presentation about some of the drivers that give us confidence out through fiscal 'twenty three in terms of the non compliant usage and the growth of our cloud based products and the continuing momentum that we have in the construction space. And as you can imagine over the last several months, we've been running multiple scenarios. And as Andrew touched on in his presentation, we've gotten continuously better at our ability to model the business. And I can talk about the things that we've done there, but we've gotten continuously better at that. So having run those multiple scenarios all the way out through fiscal 'twenty three adds to our confidence.
And finally, the thing I'd add is something that we've talked about in the past, but I think it's also important to your question about confidence. As we look out to fiscal 'twenty three and beyond, more and more of our free cash flow comes from the P and L in terms of net income. And so, our diligent spend management also increases our confidence.
Thanks, Scott. So, the next question from Adam was, what advantages do customers have by combining Autodesk Construction Cloud with design tools like Revit, Civil 3d versus competitor solutions with the Autodesk design tools? Andrew, do you want to take that?
I'm going to turn that question over to Jim, but I just want to say 3 things before BIM, BIM, BIM and its integration with pre construction planning and other types of upfront activities. But Jim, take it away.
Thanks, Andrew. I think you nailed it. That's really what it is. It's the idea of being able to take that rich building information, modeling information from Revit and bring that into the pre construction process and then applying a technology like assemble technology to condition that model, to get the information, to get the quantities out of it so that you can accurately cost the construction project. And it's then taking that information, making sure that information in that model is accessible on the job site.
This is where Autodesk is uniquely positioned. Our competitors just can't get the richness of the model as we can. We know the model, we know Revit, and it's that workflow, it's that connectivity from design to pre construction to site construction that ultimately is the huge differentiator for us.
All right. Thanks, Jim. So next question from Saket Kalia from Barclays. Andrew, can you talk about any early observations you have on premium subscription? Roughly what percent of your base do you think could benefit by upgrading to premium versus staying on standard?
Okay. First off, Saket, premium is not fully launched yet. So I just want to be really clear about that. And with that, I'm going to pass it over to Jeff, so that he can give you a little bit more color on how we're looking at this opportunity. Jeff?
Thanks, Andrew, and thanks, Zach, for your question. As Andrew said, premium launches next week, but there is a lot of excitement internally and the feedback from partners and customers has been very positive, strong interest. We're in the rollout. As Steve said, we're targeting a mid market customers and we believe premium offers significant value to customers with large numbers of users. That said, the offering can be appealing to anyone.
Some of the features like single sign on can be appealing to anyone. It's early days, we're not ready to share expected penetration data on premium, but over time you can expect us to target a broader set of customers.
All right. Thanks, Jeff. The second question from Saket is for you, Scott. Can you go one level deeper on why you feel like your ability to forecast over a multiyear period has improved?
Sure. And again, thanks for
the question, Saket. It's something that we've continually refined over the 5 plus years that I've been here. So as you can imagine, we started with a pretty sophisticated model that predicted the $1,350,000,000 in free cash flow last year and then what led to our $2,400,000,000 commitment for fiscal
2023. But what
we do every quarter is as the quarter closes and there are slight variances or obviously we dig through an enormous amount of detail because we go and make refinements for the model. And so we've continued to add layers of sophistication into that model such that it became too unwieldy for itself and it now runs in a cloud based solution. But it's having refined it now quarter after quarter, seeing things that are changed either adding sophistication or tightening down the way we add in assumptions going forward has given us a much sharper ability to forecast where we're headed. So, I feel like it's a process of continual improvement that's got us to where we are and I don't expect it to stop.
All right. Thanks, Scott. Next one comes from Keith Weiss from Morgan Stanley. How much of your business today is related to rail opportunities? Don't recall ever hearing about this before.
Lisa, you want to take
it? Yes. Thanks. So, Keith, just to remind you, Autonomous has been serving the infrastructure business for over 30 years. And as you can see from the chart I showed earlier, transportation is the fastest growing.
And there's really 3 components to transportation. There's road and highway, there's ports, airports and sea ports, and then there's rail. Now 2 years ago, I gave you examples of where we're winning with road and highway, especially some traction we have with DOTs. Last year, I talked about airport traction and momentum. This year, I gave you more examples with rail.
One of the reasons why I gave you more examples with rail, even though we've been winning and serving them for several years, is because one, we have a great strategic relationship with ESRI, which has really helped us with relationships with rail owners and ecosystem. And as Amy was sharing with you, we have some amazing integrations between our vertical BIM products and our horizontal BIM products. And we're seeing a lot of traction now because of BIM mandates, policies that are coming out like that. The building information model is becoming more and more important in those projects.
Thanks, Lisa. Next question comes from Jason Celino from KeyBanc. Can you add more color into the top benefits of named user accounts for the individual user and more importantly for the customer? And if there are any other examples of public software companies who completed similar transitions to named user accounts.
All right. So I'm going to hand most of that over to Jeff, but I want to make one comment real quick because we live through a pretty significant benefit for our customers as we went through the COVID crisis. It allows you to very quickly distribute where your work is happening. Most of our customers were able to turn off the lights at the office and turn on the lights in their house by logging on. And that is incredibly powerful.
Not a single one of our competitors was able to keep up with that capability during this crisis. Beyond that, named users allow 2 factor authentication and they're much more secure in terms of traceability and access into various projects. So there's a lot of high level things that we saw right in the middle of this crisis that our customers said, okay, I got to admit this was really good for me. Jeff, why don't you add some of the things that you're passionate about as well?
Sure. Thank you, Andrew. Thanks for your question, Jason. For individuals as named users, I would think about portability, collaboration and learning. Named users, individuals can have their models and libraries follow them from work to home device to device.
As Andrew said, that's especially important in the context of the current pandemic. On top of that collaboration is critical. Projects using our Autodesk software can involve dozens, sometimes hundreds of collaborators. And we've seen in the software development world ourselves that collaboration and named users unlock efficiency. I mean, I gave a recent example to folks in our company.
Think about GitHub acquired by Microsoft bought in 2018. GitHub, every user is named and a known actor and you could easily track who commits code, who makes changes, enabling collaboration in real time. With named users, we in terms of benefits for the individuals, we can also recognize users for their accomplishments and help them gain mastery across products and skills. You asked about business owners and customers as well. They see great value because they get better visibility into who's using products when and for how long.
And they can optimize their
licensing, but they can also identify
where they need to hire recently who looked at named user data and noticed revenue per head differences between 2 offices. When they dug into that to the user data, the two offices were using our Autodesk products differently. So they changed their training and their processes and led to an incremental $3,000,000 in profits for that customer. Now we aren't alone in seeing this value. Several public companies have made similar transitions.
I mentioned Microsoft earlier with GitHub. Named users are also now core to Office 365. We also have Adobe and Intuit. And Salesforce is built around named users as are Slack and Zoom. So our customers are seeing named users everywhere.
Thanks, Jeff. Next up, we have one from Tyler Radke from Suricu. How are you thinking about the sustainability of about 40% ARR growth in construction management? Are you seeing any share gains versus prokoa?
Okay. So I'll start. I'll comment a little bit on that and then I'm going to hand it over to Jim to talk about Procore. Look, one of the things I want you to remember about our portfolio is that it's very broad. It stands from things in the office to project management in the trailer to site execution to capabilities that start early in the process and go all the way to the very end of the process.
That breadth of the portfolio and of course the BIM wave that's going to be washing over the market for the next 5 or plus years are critical aspects of what's going to sustain our growth. We believe that we touch more of the important aspects of the solution than anybody else. Now with regards to Procore and Share and associated with that, Jim, why don't you comment on where we're at with regards to competitive landscape?
Yes, that's great, Andrew. First
of all,
I would also add, our global expansion opportunities this year help us sustain that growth as this expansion within existing accounts, because we have that broader portfolio now. And then finally, competitive takeaways, which leads to the Procore point. So we're definitely gaining share on Procore. I talked earlier today about the revenue expansion rate that we saw last year, anywhere between 125% and 135% versus theirs, which is around 119%, 120%. That's one measure that suggests we're catching up.
We also our growth that Andy just talked about, that shows great traction going into this year. I would also want to mention that we're winning against them now. We invested heavily this past year in our project management connectivity across the workflows. So the idea of connecting project management to cost change or cost management really key. So we have an extremely competitive solution now in our project management offering.
So you combine that with we also have flexible pricing and business models, which is going to be critically important for this for the construction industry as we move forward. This idea of a project based pricing is just going to be very, very hard to maintain. And I think our flexible pricing has started to make a difference and we expect that to continue. So the answer is we're absolutely gaining share on Procore and I fully expect that to continue.
All right. Thanks, Jim. Next one is from Matt Hedberg from RBC. And are there any areas within manufacturing that still need to get built out or be it built or buy? How do you think about the competitive landscape in manufacturing in both the high and low end of the market and where you can be most disruptive.
Yes. Okay. So I'm going to hand that question over to Scott Rees and let him talk about where we're coming with Fusion in this manufacturing solution. Scott?
Yes. Thanks for the question. And there's a lot packed in there. Hopefully, one of the things that you take away is we will be relentless about covering the end to end solution and reimagining the way that everything end to end is done. So kind of packed in there, we will always be looking at some combination of build, buy and partner.
But think about the way that we're building out everything that we're doing across Fusion is on this cloud data backbone. That's not to be underestimated. Again, those are table stakes, but beyond enabling the end to end workflows inside of Fusion itself, another thing that that brings is it enables the partners to participate in the workflows just like our own Fusion development team. So our partners like ANSYS, for example, is already integrating with Forge and participating in the Fusion workflows and bringing in simulation. Simulation tools aren't parts of the workflow that people swap out easily and ANSYS has a strong position there.
So we're proud to be able to partner with them with our cloud workflows. Also, Aparari, for example, the leader in cost simulation, being able to bring that in. So we'll of course continue to build, buy and partner, but partners will absolutely play a key role here. But just take away from this that we will be relentless in our pursuit of becoming the leader across all design and make and manufacturing.
Thank you, Scott. Another question for the other Scott. How should we think about inorganic contributions to sustainable double digit growth outlook beyond fiscal 'twenty three? Yes, it's
a great question. And just to be clear, as I talked about double digit growth beyond fiscal 2023, that's revenue, profit and free cash flow out beyond fiscal 2023. And while there will always be opportunistic build versus buy, tuck in style acquisitions, those targets that I've given you are based on our current product portfolio out to fiscal 'twenty
three and beyond. Okay.
Atlantic Equities. You from Atlantic Equities. You have strong position in CAD and TAM, but less so in simulation. How easy will it be for you to fully automate workflows in manufacturing without having a strong simulation offering? Can you offer fully integrated solutions using simulation partners like ANSYS?
Or do you need to do more M and A in manufacturing?
Yes. So first off, let me talk about the fact that we do have solvers. We have simulation solvers built into Fusion right now. That's why generative design works in Fusion. There are solvers that capture a lot of physics.
However, what I want to say is we want to make sure we provide our customers best in class and the solutions they want for whatever the underlying simulation capability needs to be. That's one of the big drivers of the partnership with ANSYS. And we do believe we are going to be able to provide deeper breadth to our customers through our partnership with ANSYS and its connection with Forge. And what I'd like Scott Reese to do is comment a little bit on how some of these solutions come together and how they integrate because partnership is going to be part of the answer here.
That's absolutely right, Andrew. And one of the things I probably should have touched on earlier is, when we think about one of the biggest elements of what we're doing with Fusion, the technology is a piece of it, but giving people access to technology they just simply didn't have access to in the past is just as big. And giving more and more customers access to those simulation tools, be it from directly inside of Fusion or from a partner like ANSYS is something that we believe is highly differentiated in the way that we're building things out.
Scott, another one on manufacturing from Dmitry. Some of your large manufacturing clients like Boeing have announced large double digit headcount reduction. How do you expect headcount reduction in manufacturing to affect the number of seats that those customers are buying from you?
Yes. So first off, there's 2 dimensions to okay. Boeing is not necessarily laying off in the core R and D efforts, the things that start up early in the process. They're laying off more in the production side and the throughput, mostly because of softening demand for their products and productions issues with some of their aircraft. So we're still going to be selling solutions into their design and research areas.
However, one of the things I want you to note is that we don't have a huge footprint in those companies with regards to our core manufacturing portfolio. But the way these companies are changing and the way the world is shifting to the cloud and distributed tools, the shrinking of their manufacturing teams and their manufacturing forces plays to the future that we've been articulating for over 5 years. We're highly integrated, highly, highly distributed and highly cloud based tools that have not only automation, but insights built into them are going to be critical to their processes. So long term, this refactoring of how manufacturing works play to our strengths. We're much more prevalent in the rest of the manufacturing ecosystem, but we show up more and more in these bigger companies as they look to retool themselves.
And you see numerous examples of that with our partnerships with large automotives and large aerospace around reimagining how they do things. So, Scott, did you want to provide any additional color on how you see manufacturing evolving?
I think you covered it pretty well there, Andrew. I mean, that end to end solution is going to be the key differentiator in this open ecosystem. The way data has flowed in the manufacturing workflow in the past, it's almost embarrassing as to how much waste is in those workflows today. And that's just something with Fusion completely goes away, whether you're using it direct within Fusion or within
an element of what our partners are bringing.
Got
it. Thanks, Scott. And participants, if you really want to ask any more questions, just e mail them to me or send it to or enter them in the web client. Next question comes from Ken Wong. Andrew, you mentioned new business models in the chart showing shifting revenue mix over time.
Can you elaborate on what is being considered?
Yes. So, one of the things that we're doing is we're expanding our offering to offer customers more choice, right. So that consumption is part of the process with regards to new business model, the move to named users is part of the move to in business models. So you're going to see new options and new opportunities for our customers to engage with Autodesk. If you look at the way Fusion is structured with its combination of annual subscriptions, short term subscriptions, results based pricing where you just pay for an outcome, those kind of business models are going to mainstream throughout our entire portfolio.
That mainstreaming is going to drive growth in various parts of our business that don't see those models in there yet. So what I would do is I would encourage you to try to understand what we're doing with Fusion and how that might evolve to cover our entire portfolio over the future. And that's kind of the things we're talking about.
Thank you, Andrew. Next question comes from Steve Koenig from Wedbush. Your subscription transition is complete, but it's a gift that keeps on giving because it increases customers' lifetime value and boosts Autodesk's growth rate as new subscription revenue layers into the model. The higher you can drive customer retention, the longer those benefits keep helping Autodesk. Can you comment on where your attrition can head longer term and how long can we continue to see the benefits of the model transition?
Yes. So I'm going to we might this might actually cascade from me to Scott Heron to Steve Blum as we talk about some of the work we're doing on divestiture. Obviously, we think renewal rates are critical. I mean, we're delighted that they're maintaining stability during this transition. We do think over time, they're going to trend up more to be like what we've historically seen in our maintenance products.
But Scott, do you want to comment on what our expectations are and how we look at this long term? And then Steve, I suggest you comment about what we're doing to actually engage these customers and keep them current with us.
Yes, sure. Steve, Koenig, you said it right. It's the gift that keeps giving. I expect the benefits of the model transition to continue out through fiscal 'twenty three, which is consistent with what we've said in the past. To put a finer point on what we're doing on retention before I hand off to Steve Blum, we're actually focusing on retention on churn in absolute terms, not on a percentage basis, because I think you get a much greater ability to focus on exactly where you're seeing bits of attrition and so that we can mobilize and actually attack those problems.
So we don't just look at it on a percent basis of retention. We talk about it on both the revenue and a seat basis internally. We also focus on the absolute number of churns so that we can get a really fine point on that. Steve Blum, I'll let you weigh in on kind of the activities that are driving that.
Yes. Thanks, Scott. And I mean, this is obviously an important area that's part of the reason why I talk a lot about our customer success cycle overall and how we engage with customers throughout the entire period of time that they're using our software. We have our own customer success specialists that we use to evaluate the health of our customers using the early warning systems to make sure if there's something going wrong, we can reach out to them and make sure they become healthy and are using the software effectively. We're rewarding our partners on net revenue retention rates and moving more of the dollars to the back end to help support that overall.
So this is a really big focus area. It's part of the reason as well why I focus the scale, how much scale we're getting from our partners, not just on sales resources, but on the technical resources, on customer success resources and even the consulting delivery resources that drive engagement up overall. So you're right, this was a great question because this is the gift that keeps on giving as long as we're taking the right actions to ensure our customers are effective using the licenses, the subscriptions during the term of the contract. Because by doing that, not only do we drive higher retention rates, we minimize churn, but we also think can drive expansion into the account. And that's truly the gift that keeps on giving.
Thank you, Steve. Next question, a couple of questions come from Heather Bellini from Goldman Sachs. First one is about transition to NIM. While you pushed this out pushed out when this goes into effect, how should we think about the uplift you can expect on average when a company moves from shared licenses to named
users? So first off, I'll mention one thing and then I'll hand it over to Scott. One of the big uplift drivers here is going to be premium subscription, all right. It's going to be the tool that helps our customers manage named user environments much more robustly. As of the rest of the mechanics and their financial impact, I want to have Scott Heron weigh in.
Scott?
Yes. Thanks for the question, Heather. The program that we had announced and then subsequently delayed was a 2 for 1 trade in program. So for each multi user subscription, you can trade it in, a customer can trade it in for 2 named users. And we arrived at that 2:one ratio by looking at the actual usage across a broad swath of our customer base.
And that's the average. So it's obviously it's a bit of a bell curve, but the midpoint of that bell curve is about 2 users. So my expectation from a modeling standpoint is that that's roughly trade in ratio. I expect it to be somewhat neutral. There will be some on either end of that tail, but I think they offset each
other and come back to the
There will be someone either end of that tail, but I think they offset each other and come back to a pretty neutral transition. The benefits to the customer are the ones that we talked about earlier. It's a significantly more resilient, significantly easier to use, significantly easier to manage model type and it's consistent with every modern SaaS company as being on a named user basis. So, we did it more because it's better for our customers than it drives any particular uptick in the business in the modeling of our business.
Thank you, Scott. The other question from Heather is how does your integration between your BIM products and your construction offering differ from the integration that COCO has when connecting to your BIM software with their platform?
Yes. So let's be clear. Procore doesn't have a BIM integration. What they have is a BIM viewer with a property editor, okay? If manufacturing companies ran their model based processes that way, they would not be competitive today, let's just be super clear.
Integration of BIM is much deeper than that and it requires you actually integrating the model into the entire process and automating processes that are driven by the model, not extracted from
the model or viewed from
the model. So Jim, do you want to wax a little bit more on that topic for Heather?
Yes. I mean, I think you nailed it, Andrew, and I think we talked a little bit about it earlier, but just let me reiterate some of the points I made. It's exactly right. I mean, what Andrew said is exactly true. And so our ability to actually take that BIM model and make it useful during the preconstruction planning process is a unique opportunity that we have.
That's what led to the acquisition of Assemble, right, because Assemble takes that building information model and allows the construction team to actually add additional value, additional detail, ultimately helping them extract more accurate quantities, which leads to more accurate cost information and hopefully more achievable schedules. And then that information flows right down in out to the job site. And in fact, almost equally as important is when there's a change on the job site and that information needs to get back not only to the pre construction planning office, but back to the design office, we also have that capability built in. And that's only going to get better by the way as we build out this common data environment that I talked about earlier, build that out on top of the forge platform. So we've got a great connectivity story today, but I can tell you it is only going to get better and further separate us from our competitors.
Yes. Thanks, Jim. And Heather just followed up on that one. How hard would it be for Cocoa to do the deep integration the way you are referencing?
I'll let Jim answer that since he does it every day.
I think it will be very challenging for them to do that. And I would say, if you look at Procore's point solutions, they're really focused around what happens on the job site and around the financials piece. And so a big value, a big part of the value that we deliver is connecting that model information to the pre construction planning phase. And as we know, Procore has very little to offer in pre construction. So as Andrew said, the value for them for that model is really almost limited to viewing.
So I would say it would be extremely challenging for them and it would cause them to go in a different direction for them to really get the most value out of that building information model.
Yes. And I want to go back to something I've said before, because I think it's super important. The analogy to how manufacturing played out is critical for us to pay attention to here. In manufacturing, what happened is, as people realized that integration with the model was critical to their processes, they started choosing an end to end stack that went from the front design process all the way to the manufacturing process. And these standalone players that existed out there that were kind of like doing little bits of the management and flow process, they all disappeared over time.
And there's a reason for that because the end to end integration of the model into the process is highly valuable to their efficiency and their ability to be nimble and dynamic and deliver in new ways with a lot less resources and less material and more sustainably, frankly. So let's remember that analogy to manufacturing as we talk about where the construction industry is going.
Thank you, Andrew, and thanks Heather for the follow-up. Next question is from Blair Cooper. Interested in the rationale behind the very competitive pricing with Fusion 360. And if you have seen any competitive response, given there is such a change in pricing compared to what is currently offered, does that impact the $33,000,000,000 TAM you have put out there for manufacturing? Any more details on how generative design component is priced apart from being consumption based?
Yes. So, Scott and I are going to answer this. I'm going to tee it up a
little bit. Yes, the entry point for
Fusion is very disruptive and it's intended to be that way. The terminal state in terms of what a user will pay for Fusion subscription is going to be different. I'll let Scott comment on how that stacks. Remember, we've moved our entire business to subscription. Our inventor based business is on subscription, the fusion based business is on subscription and we see nobody else building out the kind of robust integrated cloud based multi tenant platform that we've built and especially in the SOLIDWORKS space where there really isn't a strong alternative.
So what we see regardless of what happens at the TAM, what we see is shift to share shift coming our way and we're already seeing it. We're seeing some of these older un networked solutions without the cloud infrastructure, without the end to end start to come our way. But I want Scott to comment on what is really the terminal value of a Fusion customer over time as this product rolls out broader and broader and broader. So Scott, why don't you tell them about that?
Yes. Thanks, Valera and thanks, Andrew. So there are really 3 key elements to the business model and what you end up with isn't less you actually end up with a more successful customers and that's where we're focused. Look at Gibson Guitars that I shared, they were running in a suboptimal form with SOLIDWORKS. They could only afford 5 seats of SOLIDWORKS, they had 20 engineers.
So they had 3 quarters of their engineering team running in a suboptimal way. With Fusion 360, they were able to get all of the capabilities that they needed to all of their engineers, kind of across the stack. So they're going to be a better company because of it. Now the 3 elements to the business model, I think are important to pay attention to. 1 is the access point that gets for $500 a year per user, they get access to all of those end to end capabilities.
But for those who need the more advanced capabilities, we have the expansion packs as well. So those users can require every user to be over served with capability that they just don't need. There's a base level of capability every engineer in that department should have. And then the way generative design is priced and simulation will be the same is, it's consumption based. The more you use it, the more that you pay And generative is actually priced for outcomes.
So just using it is a pretty low price, to be honest. It's when you use it and you're satisfied with the outcome, that's when you pay a higher price. So not only is it consumption based, it's success based. So the entire business model is just one that's focused on making a more successful customer.
Thank you, Scott. And on Gove, I think the next one is for you as well. It's from Jabil Shower again. You have more than 4 times as many active Inventor users as Fusion 360 users. Is there an upsell or attachment opportunity in that base?
Yes. Hey, Jay. So good question. And this was a key reason that I went back and reflected on our position with our existing portfolio today, because we already have a big position kind of across this stack. So what that means for customers is that Autodesk is the safe choice because with the collection in particular, remember they get Fusion 360 as part of the value of the collection.
So they have all of the capabilities that they already know and love and value today, but they also have all of the future workflows that they want to bring in. And so we see the big opportunity as one is share shift, for example. So a lot of our competitors have stopped sharing unit numbers for obvious reasons, but for the data that we have, we show that across Inventor and Fusion, we've outsold SOLIDWORKS from a unit perspective for 3 quarters running. So that's where we see the big opportunity coming from is from share shift. We definitely want to take care of our existing base and we see Autodesk as the safe bet for them.
Again, relentless on becoming the leader across design and make and manufacturing and share shift is where we believe a lot that's going to come from.
Jay, I just want to add something. We at Autodesk, we are world class at bringing our customers to the future. No one has brought more AutoCAD users to 3 d modeling than Autodesk when you look across the Revit portfolio, Inventure portfolio and now Fusion. We are going to be relentless at bringing all of our customers to the cloud on the most modern and capable systems that are out there. We have this muscle.
We're very good at it. And this integration of this opportunity is going to help bring all these customers forward as well as provide incremental opportunities.
Thank you, Andrew and Scott. Our next question is from Howard Glacier. Why are you best positioned to take advantage of the opportunity for building construction relative to SOLIDWORKS and our Nemetek? Why has this potential not been realized thus far and what changes now to make this
happen? Yes. So there's a lot changing. And by the way, it's interesting how you characterize the players in this space. So I'll talk about this a little bit.
But I think you're talking about the industrialized construction piece, the move to prefabrication, to modular construction, to pre gold types assemblies, basically applying industrial methods to construction. This has taken a while to change because it's a very complicated industry with very complicated processes. What's changing now, and by the way, this COVID crisis is only going to accelerate this, is now people cannot build sustainably into the code and to their customer requirements using the old methods that they were using before. That's why you're seeing BIM accelerate with the mandates and the acceleration of BIM is going to start to accelerate this industrialization. And the interesting thing is SOLIDWORKS is not even well positioned to play in this space.
Matter of fact, most of the building product manufacturers are using our tools to drive their processes for designing components. So we know these customers well and we know how the information flows between a product model and a model that you're going to manufacture something off and a building information model, which is something you're going to build. These are different things and we've done a lot of work to understand how information flows across those two things. Think Nemechek doesn't have any modern forward facing solution right now. They had Bluebeam, which is just another desktop solution for handling punch lists and work associated with that.
So they really weren't focused on the full digital process. But Jim, I'll let you talk a little bit more about how it moves away from just the piece of who's doing the industrial work to the whole entire process?
Yes. So Andrew, just Howard, thanks for the question. It's a great question. Andrew, I think you said it, the answer really well. I would just say underscoring Andrew's point is, 1st and foremost, our leadership in design in BIM is going to be absolutely critical here, right?
Because listen, the design work still starts in Revit, but then ultimately has to get out to the shop floor and then out to the construction site. So it's about our leadership and design in VIM. It's about our strong offering and compelling offering in manufacturing. And it's about our breadth, depth and connectivity of our construction portfolio. Bring those things together and we are uniquely positioned against Nemechek, against SOLIDWORKS, against STAS.
So really nobody has the breadth of that offering as we do.
Thank you. We have another question from Luke Morrison. Can you talk about how you think about monetization of the Forge platform and how that could evolve over time? Yes, I'm going to pass
we're and where we want to go. Right now, we're not concerned too much about that, but that will change over time.
Yes. Thanks for the question. Definitely something that we're paying a lot of attention to. But right now, like Andrew talked about, we're focused on enabling these new workflows like you see in BIM360 design, like you see in Fusion 360, like you see across all of the different cloud based portfolios, figuring out how to make our partner successful. Steve Blum shared some successful partner integrations earlier and capturing that data and really understanding the value created.
IVForge as yet another large untapped opportunity for growth in the future. It's something that we're definitely focused on customer success right now and paying attention to how people use it and how they derive value from it.
Thank you, Scott. And our last question for the day comes from Andrew De Gaspery from Berenberg. If the urbanization trends over the last few years reverse due to recent events, how is the Autodesk toolset positioned in an environment where demand rises for, say, single family homes? How much of suburban rural construction is digitized at this stage?
Yes. So first off, this is a great question. It's going to be a 2 parter. I think I'm going to have Lisa talk about some implications. But let me paint this in a context.
You got to be careful about the assumptions you make about this. Suburban urbanization and the hub and spoke model that might evolve from that won't result in the same kind of classical single family home construction that you see. You couldn't house all the people if you did that. All right. There it would be impossible.
There's not enough land. You can't sustainably do it at this point. So you're going to see different types of construction rising up in suburban areas. It's going to look a lot more like more distributed urban construction. So you might see more high rises and suburbs if this plays out this way.
And by the way, it's highly speculative as it does. But also what you're going to see is an increasing need for high frequency infrastructure, not only between the hub and spoke of urban and suburban centers, but suburban to suburban. And I'd like Lisa to comment a little bit on that, because that's something we've been looking at for quite some time. So Lisa, why don't you chime in?
Yes. Thanks, Andrew. I agree. Basically, we're not seeing any slowdown in all the projections for what the population is going to be over the next few decades. So no matter what, if we're building in more suburban areas, maybe the buildings will look different, but you're still going to need those buildings and they're still going to need the BIM model.
And you're still going to need the same type of infrastructure. You're going to need water networks. You're going to need rail networks. But this time, this may be to go between areas as opposed to within. And so we're going to see the same kind of demand.
It just might look different in a different location, but we don't see any impact on the demand or the capability of our tools to be able to handle that.
Thank you, Lisa. And that will be the end of our Analyst Day webcast. Please feel free to reach out to the IR team if you want to follow-up on anything. Thanks for joining us today and looking forward to speaking to you soon. Bye bye.