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Goldman Sachs Communacopia + Technology Conference

Sep 6, 2023

Kash Rangan
Managing Director, Goldman Sachs

All right, let's do a little Autodesk here. Is the mic turned on? Mic's turned on, right? Mic's good. Do a little Autodesk. Excellent! We have Amy Bunszel, EVP of AEC from Autodesk. So Amy, before you get started, I have to tell you something.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Okay.

Kash Rangan
Managing Director, Goldman Sachs

I'm a former mechanical engineer.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Oh, fabulous!

Kash Rangan
Managing Director, Goldman Sachs

My senior project was on Autodesk.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Wow!

Kash Rangan
Managing Director, Goldman Sachs

Yeah.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Thank you for your business.

Kash Rangan
Managing Director, Goldman Sachs

So but I've forgotten. No, no, no, I'm embarrassed to admit to you that I was not very good, but we managed to design an automotive gearbox on Autodesk back those days.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Oh, wow.

Kash Rangan
Managing Director, Goldman Sachs

I won't tell you which year I graduated from college, but, that's, that's my Autodesk-

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Well, welcome.

Kash Rangan
Managing Director, Goldman Sachs

That's my first... Even before I knew how to spell software, I had used AutoCAD LT-

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

That's great

Kash Rangan
Managing Director, Goldman Sachs

-so.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Winning the hearts and minds of students is one of our-

Kash Rangan
Managing Director, Goldman Sachs

I know, right?

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

-funnest things to do.

Kash Rangan
Managing Director, Goldman Sachs

I know.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

That's great.

Kash Rangan
Managing Director, Goldman Sachs

Yeah, yeah, yeah. So tell us about yourself, your background, and then we'll jump into some questions.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Sure. Well, I'm a recovering electrical engineer, but-

Kash Rangan
Managing Director, Goldman Sachs

Wow, okay.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

But it's been a while. So I'm Amy Bunszel. I've been with Autodesk for over 20 years. I actually came in through an acquisition in 2003, worked in manufacturing, and now I'm responsible for our architecture-

Kash Rangan
Managing Director, Goldman Sachs

Is that Moldflow, by any chance?

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

No. No.

Kash Rangan
Managing Director, Goldman Sachs

Okay.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Mine was wire harness design.

Kash Rangan
Managing Director, Goldman Sachs

Oh, okay.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Even more esoteric.

Kash Rangan
Managing Director, Goldman Sachs

Yeah. All right.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

So worked in AEC for the last 10+ years, AEC and AutoCAD. So I have our design products for the architecture, engineering, and construction field. We focus on building information modeling, which is really our big strategy in AEC. In addition to those products, I also am fortunate enough to be responsible for AutoCAD.

Kash Rangan
Managing Director, Goldman Sachs

Mm-hmm. Great. That's fantastic. You're responsible for AutoCAD as well?

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

AutoCAD as well.

Kash Rangan
Managing Director, Goldman Sachs

That's better.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

The gift that keeps on giving.

Kash Rangan
Managing Director, Goldman Sachs

Yeah.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

It's really wonderful.

Kash Rangan
Managing Director, Goldman Sachs

Yeah. That's the product that has been around the longest-

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Yep

Kash Rangan
Managing Director, Goldman Sachs

... right? Mm-hmm.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Over 40 years.

Kash Rangan
Managing Director, Goldman Sachs

Yeah, 40 years, exactly. Exactly. So, in AEC, let's talk about what excites you the most about the AEC opportunity? What are some of the secular tailwinds that you see?

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Well, one of the things that excites me the most about the AEC opportunity is just the sheer size of the opportunity.

Kash Rangan
Managing Director, Goldman Sachs

Mm-hmm.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

So at our last investor meeting, we talked about $46 billion TAM in AEC and 28 million potential professionals using our products, and that's, that's really exciting. And if I look just at the design side of things, that's $30 billion and 11 million potential professionals using our software. So in terms of having an impact, it's a great place, it's a great place to work.

Kash Rangan
Managing Director, Goldman Sachs

Mm-hmm.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Now, what are our customers facing? You know, they have a number of opportunities and challenges ahead of them.

Kash Rangan
Managing Director, Goldman Sachs

Mm-hmm.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

One of the opportunities that we talk a lot about is demand. So demand is increasing for them.

Kash Rangan
Managing Director, Goldman Sachs

Mm-hmm.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

If you look at the need, the sheer need for housing, the population growth we're expecting in the next 20 years-30 years, we just need more of everything.

Kash Rangan
Managing Director, Goldman Sachs

Mm-hmm.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

But the flip side of that is they're having trouble getting enough workers to perform all the work that they have and that they want to bid on. So that's one challenge they have. Another challenge they have is the increasing cost of materials and supply chain problems. So the good news for Autodesk is they need to apply software, software automation, analysis, to try to manage through some of those challenges they face in their business.

Kash Rangan
Managing Director, Goldman Sachs

Mm-hmm. Okay, so, Amy, from my understanding, like Revit, which is a, excuse me, a product that you're responsible for, and BIM sort of go hand in hand. So can you kind of speak to the importance of BIM mandates globally and kind of how that's impacting kind of usage of Revit?

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Yes, absolutely. So for quite some time now, Revit, which is our architecture design product, and BIM are kind of synonymous. So when a country institutes a BIM mandate, basically that's saying, "Look, for all of our public sector projects, we want you to use BIM." That largely means people are gonna start using Revit in more ways in that country. So then what happens is everybody who works in that supply chain learns Revit, learns BIM, and then as they're doing work for private sector companies, they're now able to kind of deploy that, and now the private sector owners want more BIM, and it's sort of a great flywheel.

Kash Rangan
Managing Director, Goldman Sachs

What type of penetration do we see in terms of BIM mandates globally? I know, like the U.S. is far ahead of some other countries-

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Yeah

Kash Rangan
Managing Director, Goldman Sachs

-so.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

You know, the U.K. was first, and they're one of the most mature, but even there, we're still hovering at around ±50%.

Kash Rangan
Managing Director, Goldman Sachs

Mm.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

There's still a big opportunity for more projects and more users to kind of get on the BIM, BIM bandwagon. Interestingly, just in the last month, both Ireland and Spain introduced new BIM mandates for their public projects, so we're expecting to see even more BIM adoption in those countries going forward.

Kash Rangan
Managing Director, Goldman Sachs

Interesting. And, Amy, I think just one interesting thing that came out of Autodesk University 2022 was the three industry clouds.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Mm-hmm.

Kash Rangan
Managing Director, Goldman Sachs

Perhaps just kind of talk about kind of your strategic rationale for introducing the three industry clouds and then specifically for the AEC category.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Absolutely. So at Autodesk University, we introduced Fusion, Forma, and Flow. So these are our three industry clouds for manufacturing, AEC, and media and entertainment. Those are our three primary industries. And the idea with the industry clouds is really to help our customers with the, kind of with a lot of connected data and connecting design and make. In each of our industries, we span both the early design process all the way through, you know, making and developing the end deliverable. So in AEC, what that means is we're gonna take BIM to the next level through Forma, and we're gonna do an incredible job connecting data across the entire ecosystem by making the data more granular and more accessible to our customers. That will also make it more accessible to AI and machine learning.

We're also adding workflows that are powered by automation, by simulation, by analysis, and really helping our customers focus more on the outcomes they want to deliver, whether it's a cost outcome, a schedule outcome, a sustainability outcome, instead of just thinking about, like, geometry and those kind of things.

Kash Rangan
Managing Director, Goldman Sachs

Yeah, so I think connected data is a really interesting angle, and it ties in nicely, I think, with generative AI-

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Yep

Kash Rangan
Managing Director, Goldman Sachs

and perhaps Generative Design. So perhaps you could just talk a little bit about kind of the opportunities set there and maybe how far along you guys are in, in terms of capitalizing on that.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Absolutely.

Kash Rangan
Managing Director, Goldman Sachs

See, he's so good. He's not even a mechanical engineer, but he's asking such good questions. ... mechanical engineering.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

So back to data. So data is really one of the primary, I would say, I don't know, facilitators or accelerants across the AEC industry. If we think just today, when our customers take data from the early stages of design into detailed design, through construction, and all the way to operations to create a digital twin, they're really getting the most value out of that BIM life cycle. But now we really want to take that up a notch again. We want to make it more granular, 'cause right now it's in these big monolithic files, so that they can go through that workflow faster, but also connect with ERP systems or other systems that run their business.

And then, what we want to do is, leveraging all this, you know, cloud-structured data, we want to start, you know, training AI and doing machine learning for them. Now, the good news is, for Autodesk, we have already at least a decade or so of experience in doing-

Speaker 3

Right

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

-AI. We have Generative Design in Fusion. We have some in Revit. We have in our Construction Cloud, Construction IQ, where we create insight off of, data we have from our customers.

Speaker 3

What are the things that you do in these clouds with generative AI? I'm just curious.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

What are the things we do? So for example, in the Construction Cloud, we can look at in the Insight product, we can look at past invoices, history with clients, current situation, and anticipate for a contractor when they might be predict a problem before it happens.

Speaker 3

Mm-hmm.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

So we might know, you know, most likely this is gonna be late. We don't know it yet, but the trend is on a trajectory that we've seen before from this vendor, and you're likely gonna have a problem. And so we can flag that before they even know it. And in Forma, we're using it to do real-time analysis and simulation around things like weather, wind patterns, heat, light, things that impact how you might design or place a building on a site.

Speaker 3

Really? And how does the natural language interaction with the system work, you know?

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Well, this is not actually using the natural language.

Speaker 3

Okay.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

This is more using the kind of AI in terms of driving, "We know all these results, so we can predict the next results." But we have customers using natural language and our API, and so they're driving our API through natural language today. There's a couple of them up on YouTube, where they're driving Revit and AutoCAD by talking to it-

Speaker 3

Wow!

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Using the current capabilities that we have today.

Speaker 3

I could have done my senior thesis, like, with talking to it?

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Yeah.

Speaker 3

Go ahead. So tell us more. I mean, that's like, programmability and, code generation meets your domain.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Mm-hmm.

Speaker 3

So what else could you be doing for your engineers?

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

You know, it's an interesting, interesting challenge. Because we span so many phases, all the way from, you know, early conceptual design to operations, right now, we've been focused on my team a little bit more on the early-stage conceptual design. It's certainly an easier problem to solve because you're not dealing with, you know, "Do I have all the supports for the building to stand when I go to build it?" But you're dealing more with the facade and some of the-

Speaker 3

Mm-hmm

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

-external components.

Speaker 3

Mm-hmm.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

So that's an area certainly where we're exploring. And then, interestingly, at the other end of the spectrum, on operations, there's so much data coming off of sensors, from IoT, that are showing people how their buildings are running, that they can start doing predictive analysis and understanding-

Speaker 3

Interesting

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

you know, if a, you know, if a HVAC system might fail before it fails.

Speaker 3

Mm-hmm

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

or things like that.

Speaker 3

Mm-hmm. Interesting.

So that seems very digital twin-esque, so maybe we can talk about-

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Yeah.

Speaker 3

Autodesk Tandem and maybe just kind of touch on the adoption rates within, you know, digital twins within your customer base, kind of where you see that trending, just your broad take on it.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Right. Yeah, so Tandem is our digital twin prototype or pilot, and so we've been working with a lot of our named accounts on digital twins. And so we started with what we would call a functional twin, which is pretty much a digital version of the physical object. And so you can walk around in it. You can kind of experience it. You could arrange furniture in it. But now we're moving up the curve to things that are more like operational twins, where we're bringing in IoT data, and people are actually able to see performance of the building in the twin. And so in that case, we're finding customers are making, you know, energy-saving decisions.

You know, they're anticipating, "Where do I need to do maintenance in the building first?" So they're driving real cost savings on how they operate the building, because about half of the cost of a building is actually the operations of the building once it's already built. So that's real material value for our customers. And then, the cool thing for Autodesk is, with these digital twins, we have one customer, Windover Construction, who they started building the twin as they were doing construction on these projects, and then realized, "Oh, I can actually monetize this by turning it over to my customer-

Speaker 3

Mm

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

- and helping them operate the twin once I've built it." So they're building a new line of business. And then, for Autodesk, the serial owners, so the, the huge companies that own lots and lots of buildings, they're also new potential customers for Autodesk, 'cause they're gonna wanna build their own digital twins for all of their assets as well.

Speaker 3

Yeah, digital twin seems like such a huge efficiency unlock. So, like, from your perspective, like, where are we in terms of market adoption? Because we hear from a lot of different companies that they're, you know, exploring Digital-

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Mm-hmm

Speaker 3

twin products and functionality, and it seems like a pretty fragmented space, and people are angling into it from a lot of different ways. So I'm curious, kind of, your overall take on the topic.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

That's very true. So, you know, for us, I think the key unlock for us is most of this data is in Revit.

Speaker 3

Right.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

What we feel that makes Autodesk unique in this space is we can help make that Revit model really digestible for a digital twin. Almost create an easy button and a glide path to go from, you know, the Revit model directly into the twin, and then start getting value quickly. Whereas, what we see elsewhere is more of a hodgepodge collection of lots of disparate data, trying to create something that might be valuable. Since we have the data in our system already, we can make it kind of go on an easy ramp to the twin.

Speaker 3

Fascinating. And Amy, maybe just touching on kind of civil infrastructure, right? You guys have the Civil 3D product, which I believe you're responsible for, and there's, you know, pure-play competitors in the market that do civil infrastructure. So just want to get a sense of kind of your competitive differentiation within the civil infrastructure category.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Yep. So not, not surprisingly, it's again, it's that depth and breadth. So we bring building information modeling to civil infrastructure. So, you know, the conceptual design, the detailed design, the construction now, and then, ultimately, the digital twins. And we have digital twins in water for infrastructure right now, but, so that's one way we do it, and then also we do it with, depth and capability. So for the last five years or 10 years or so, we've been investing a lot in road and rail, so organically building that on our own, and that's paying off because we're showing a lot of momentum in the DOTs now.

Speaker 3

Right

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

In terms of, you know, winning competitive swap outs there. And then in water, we went pretty deep in water with the Innovyze acquisition.

Speaker 3

Yeah.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

That gave us this end-to-end, best-in-class capability, when we combined it with our core civil functionality. That's another great place where we're kind of leaning into infrastructure.

Speaker 3

Yeah. So you have Innovyze, you're going deeper in road and rail. This all seems to tie back to a lot of, like, the public infrastructure-

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Mm-hmm

Speaker 3

infrastructure investments like IIJA, right? So can you talk about maybe kind of how many of those projects you think are kind of shovel-ready today, if you will, and, you know, how much momentum you expect from a lot of these?

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Yeah.

Speaker 3

And maybe not even just in the U.S., but on a global scale.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Mm-hmm. So not many of the projects are shovel-ready today, so we have yet to really see the growth that we'll probably see from that. But what is happening today is there's requirements on a lot of those projects to digitize the design and operations process. So you're not gonna get that funding unless you have built digital processes to make sure we don't get into this aging and crumbling infrastructure problem again-

Speaker 3

Right

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

So we can do the maintenance. So that's where we think for Autodesk, the biggest opportunity is everybody's gonna be on this path to digitization in order to win much of this new business.

Speaker 3

In the developing markets, like, any perspective on kind of how that's shaping up from an infrastructure investment perspective?

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

You know, the developing markets are interesting. We highlighted in our last earnings call that India is-

Speaker 3

Mm-hmm

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

... is definitely a bright spot for us. And, if we look at overall construction spend, the majority of that is happening in infrastructure there, and so we're in a good position there as well.

Speaker 3

It started with my senior project. I mean,

So I had a question for you. The compute demands for digital twins, how much of a role does the cloud play in handling the compute demands as you get into more compute-intensive, graphics-intensive projects?

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Well, the good news about Autodesk at graphics and digital twins is we're really good at making those graphics consumable.

Speaker 3

Mm-hmm.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

So, part of what the team is doing in terms of, you know, optimizing the Revit data for the digital twin, is to make sure that it is lightweight.

Speaker 3

Mm-hmm

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

... and that you're only bringing what you need to, to sort of solve the problem you want to solve-

Speaker 3

Mm-hmm

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

With that digital twin. So that's definitely working in our favor.

Speaker 3

Got it. And with digital twins, do you see, What kind of opportunities do you see in Europe and Asia? Because we hear a lot about these projects in Asia, as much as you see them happening in the U.S. But is there any rate of adoption differential between these geographies, and what does the pipeline look like?

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

You know, I haven't seen a rate, a rate of adoption-

Speaker 3

Difference

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

challenge there at all.

Speaker 3

Yeah.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

For me, it tends to be about having an owner-

Speaker 3

Mm-hmm

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

—who understands the benefits of that digital twin.

Speaker 3

Mm-hmm.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Because at the end of the day, they're the ones who have the long-term sustaining benefit and value from the twin, and if the owner is asking for it, their whole supply chain will line up to make it happen as part of the, part of the deliverable.

Speaker 3

Yeah. And stepping back, what is the—I know you talked about the demand picture, right?

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Mm-hmm.

Speaker 3

Right at the front end. What is the demand picture for commercial construction? So if you look at San Francisco, you get a very different view. Like, people are, companies are leaving, people are leaving the state, that sort of thing. But, what is it like in the rest of the world with regards to appetite, demand for commercial construction?

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Yes, I work right up the street, so I-

Speaker 3

Yeah

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

... I fully, fully understand what's happening in San Francisco. I was asked today a lot of questions about, you know, commercial, because it is definitely... New commercial construction is definitely a soft spot in the market. But what we're seeing is our customers are pretty nimble, and they're able to, you know, flex their business and go after the projects that do exist. And so globally now, more than 50% of the new projects are actually renovations. So we're working on, you know, what do we need to do to our portfolio to help our customers, you know, win and compete on these renovations?

Speaker 3

Mm-hmm.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Some of that is investing in things like point cloud scanning and existing condition assessment, looking at sustainability calculators so we can understand how much—what happens if I tear down the building versus keep the building-

Speaker 3

Right

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

... and so there's a lot of work happening there. So people have moved to the renovation from the net new. And then also reimagining. I've read some really cool articles about how to turn, you know, high-rise buildings into apartments, you know, from offices and-

Speaker 3

Is that something you're actually seeing in your business?

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

No, I'm just, you know, fast companies writing articles about these things.

Speaker 3

Yeah.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

But I think what's important is there will be opportunities to transform what already exists because that's, I mean, we usually talk about it, the greenest building is the one that's already built. And so thinking about ways to leverage that is, you know, better for the planet, but it should be, you know, cheaper and faster than some new things.

Speaker 3

Amy, the 50% of buildings or of projects, of renovation projects, is there a way to contextualize and compare it to, say, a few years back, how much that percentage was?

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

You know, I don't know.

Speaker 3

Yeah.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

My guess would be prior to COVID, it was... We were running around building a lot of new things.

Speaker 3

Yeah. And now that-

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Yeah

Speaker 3

It's tilted more towards renovation.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Yeah. Well, and the other thing that's happening is there's some legislation in the EU around renovating the older building stock in Europe. Like, if you just think about any of those beautiful old cities in Europe, like, those buildings are horrible when it comes to heating and cooling, and they all... But they're historic, and they're gonna be there. So how do they-

Speaker 3

Right

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

preserve the building but make them more energy efficient? And that was accelerated, I think, partially by the, you know, the energy crisis that happened-

Speaker 3

Yeah

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

You know, when the war broke out, so.

Speaker 3

In Europe, when you go stay there, during the fall, they say, "Just open the window.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Yeah.

Speaker 3

... That's air conditioning?

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Yes.

Speaker 3

Amy, I know this doesn't fall directly under your purview, but I wanted to ask a little bit about Autodesk Construction Cloud.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Mm-hmm.

Speaker 3

Maybe from the perspective that, you know, look, you clearly have relationships with a lot of the largest construction design firms, right? So it seems like a pretty low-hanging fruit opportunity, if you will, to kinda cross-sell construction management software to your existing base. So can you kinda speak to that opportunity, what you're seeing, what's net new from a customer perspective versus penetration within the installed base, et cetera?

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Yeah. So, absolutely. And one of the things we did in the beginning of this year was combine our sales teams from the Construction Cloud and the mainline Autodesk sales team, so that we could better take advantage of that opportunity. 'Cause we really felt that our one of our superpowers in construction is the fact that we also have the design data. And so taking that design data and deconstructing it so that it can feed the construction lifecycle process, is something that is sort of unique to Autodesk to be able to do that. So that's been a big focus area for us. When it comes to my team, in AEC, there's this notion of a common data environment.

So this is sort of a data backbone that all of the, all the many stakeholders would participate in, and that's Autodesk for us, which is part of the Construction Cloud. So we already have our design customers, you know, populating that backbone with the design data, and it was kind of a natural process to sort of incorporate some of the downstream construction processes, too, there.

Speaker 3

Do you think that's a distinct competitive advantage relative to maybe some of the pure play?

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Absolutely. Absolutely. And we're also seeing, you know, a lot of strength, as you guessed, in our, you know, named accounts of the very large companies that, quite frankly, were already design customers, but now they have an even, you know, bigger reason to invest across the board in Autodesk.

Speaker 3

When you take advantage of the synergies from a product development standpoint, how do you also reckon with the buyer being very different? The construction buyer, construction project is done very differently than the design project.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Yep.

Speaker 3

How do you get these folks to align with each other, and they agree that the same design provider should be the one that's handling the construction project?

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Well, one good thing is that our business model is really flexible, and it's not one-size-fits-all. In fact, in construction, we have a couple of extra business models that we don't necessarily have in design, because we know that in some cases, the construction companies wanna buy software differently. Versus in design, we're much more, you know, pure subsc-- you know, pure subscription-

Speaker 3

Mm-hmm

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

... and, kind of named account play. So that's one thing. The other aspect is, we have this new Flex program, where customers can buy, like, a small amount of tokens and then use them for whatever they would like. So this allows existing customers to go and try new things with a very low barrier to entry.

Speaker 3

Right.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

We're seeing that as another way where, you know, we can kinda cross the differences between those two-

Speaker 3

Mm-hmm

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

- types of users.

Speaker 3

Are you seeing that Flex program, like, serve as sort of a conversion funnel to more significant agreements, if you will, once they, you know, you capture that long tail?

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

We hope so. It's very early days on Flex, but basically, if you use the software more than a certain number of days a month, you're gonna wanna switch over to a subscription.

Speaker 3

Right.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

So it's definitely priced so that there's a point by which it makes more sense economically for you to go to, to a subscription.

Speaker 3

Understood.

Yeah. I just want to understand a little bit about the hiring environment in your AEC end market. You did hint at labor shortage.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Yep

Speaker 3

- that sort of thing. How are your customers able to find talent in this constrained market? And the role of automation, otherwise, in a labor-constrained market, your thoughts.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Yeah. You know, it's, I think it's like many of us, they're looking-- In some countries, they're importing workers from other-

Speaker 3

Mm-hmm

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

countries. I think many of our customers are leaning into, this is a longer-term play, but educational programs.

Speaker 3

Mm-hmm.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

You know, Autodesk leans into education and retraining programs, and trying to help people learn new skills so they can participate in that. But you're right, part of it is not gonna be solved by more people, it's gonna be solved by better deployment of software and better automation.

Speaker 3

This is, in design, not in construction?

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

It's in, kind of in both.

Speaker 3

Okay.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

I mean, it's absolutely in both.

Speaker 3

Yeah.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

I mean, there's even the architecture firms are finding that they're, you know, struggling to find enough, you know-

Speaker 3

Really?

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Yeah, there's

Speaker 3

All these jobs that are gonna be displaced by generative AI, I mean, we should retrain them to be your customers, right? I mean...

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Well, we have a slightly less harsh perspective on generative AI. We-

Speaker 3

What is your perspective? I'm curious.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Well, we really think, for our customers in particular, that AI will be more of a co-pilot-

Speaker 3

Yeah

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

like, you know, like it is for coders being described. But like an AI on your shoulder, something that... Again, we want to get rid of all the mundane, non-value-add work, and then free people to do their, the creative work-

Speaker 3

Mm-hmm

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

But then help them do that faster.

Speaker 3

Mm-hmm.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Because our customers can only generate so many different sort of conceptual designs or different concepts to a stage where they can show them to their customers. If they can do ten times more of that, you know, they can get a better relationship with their customer and more, and more value. In fact, one of our former early success stories, his name I'm forgetting at the moment. What is the name of it? CUBE 3. They piloted Forma in an early-stage conceptual design couple projects, and they found that in half the time, they were able to deliver more creative and more valuable solutions to their end customer.

Speaker 3

Mm-hmm.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

And so, you know, both parties were winning there. So there was value generated on all sides. So definitely it's something they want to deploy in their, you know, mainline workflow going forward.

Speaker 3

What does that, like, pricing uplift look like? I mean, if you're getting 50% productivity yield on, on something like that, is that ASP accretive? How do you guys think about that?

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Well, right now, in this early conceptual design piece that we're doing, you know, Forma's $1,000, it's $1,000 a year. It's included in the AEC Collection, 'cause we thought it was really important that our Revit customers got access to Forma. And this is not, this particular operation is not expensive. So I think as, you know, as things evolve and, you know, we will make sure that we're getting properly compensated for the value and the expense of what the capabilities cost.

Speaker 3

You touched a little bit on simulation earlier. Can you just expound on kind of Autodesk's role in the simulation world? Is that a place that you've historically played or are increasingly moving into?

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Yeah, in a few different ways. So in manufacturing, we've always had a bunch of different simulation and analysis capabilities. We have a very strong partnership with Ansys-

Speaker 3

Right

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

in manufacturing. In AEC, similarly, we have, we have a lot of different capabilities and some partnerships, but I think in AEC, where we're really strong is, you know, structural steel, kind of the things you'd expect, structural steel, and more recently, a lot of sustainability analysis. So, carbon, all our customers are trying to understand the impacts of their choices on the carbon footprints of their buildings. And then, the early sustainability questions about, you know, if I position a building in a certain way with the windows a certain way-

Speaker 3

Mm-hmm

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

... like, what happens to the heating of that building or the cooling of that building? And so, we have tons and tons of different analysis and simulation capabilities in AEC. And those things tied up to, you know, a generative AI, start to add-

Speaker 3

Right

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

value in combinations we haven't even thought about yet.

Speaker 3

Interesting.

Could you open up?

Yeah

... to anybody who has a question? If you have a question, just raise your hand. And as you think through your questions... I had a question on your channel partners, and the direct versus channel. Maybe could you expand on the dynamics there? Is there the company is becoming more and more direct-

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Mm-hmm

Speaker 3

... relied, right? How does that play out? What does that allow the company to benefit from as you go direct? Can you talk about the benefits-

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Yeah

Speaker 3

... the deal sizes, ASPs, retention, et cetera, the benefits the company is thinking about?

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

I'll start, and maybe Dan can add. For us, broadly, you know, most of our business still comes through the channel.

Speaker 3

Mm-hmm.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

The channel is a huge partner for us and our customers in global reach and global scale. However, we do have a portion of our business that's fairly transactional, and so we've been growing quite nicely with our e-store and how we do business over there. Then we have the named accounts, which are a very high touch, you know, very strategic, and, you know, very valuable part of the Autodesk business. So the channel fills this gap in the middle, where we're never gonna be able to get to all those customers, and they do serve as trusted advisors for these customers, just at a different scale than we can. Did you want to add anything, Dan? I did okay?

Speaker 3

Amy, maybe just a higher level one. You oversee a lot of different, you know, design, products within the AEC portfolio. You know, like, what, what is the most exciting opportunity from your perspective if we were to stack rank all these different product, road, rail, Innovyze,

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Oh

Speaker 3

... just across the spectrum, what gets you excited?

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Okay, so one personal one and one not a diff one.

Speaker 3

Yeah.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

So, we get involved in the coolest historic preservation and reconstruction projects ever. So, you know, the Notre Dame project is just really-

Speaker 3

Wow

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

... it was a horrible tragedy, but it's inspiring to be able to be involved in, you know, rebuilding that, you know-

Speaker 3

Saw it literally a couple of months back.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

... fixing, you know, how the whole restoration of the Plaza with the Eiffel Tower is very cool. But for me, when it comes to the growth, you know, the infrastructure is pretty fascinating to me. And in the last two and a half years, I've learned a ton about water, and I think... Every project in infrastructure has water associated with it, even if it's just trying to figure out drainage, you know, off of a road, right?

Speaker 3

Right.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Water is everywhere. Doing it well is when you do it great, it's great. When you do it poorly, it's a disaster, right? There's too much of it in many places, not enough in others. So I think the amount of innovation that we can bring to our customers working in water and the projects that are gonna happen in water is necessary and really inspiring, you know, gonna drive growth for Autodesk.

Speaker 3

Got it.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

All right.

Speaker 3

We'll give you 56, 55 seconds of your day back.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

All right. Thank you.

Speaker 3

Unless there are any questions. Yeah. Thank you so much. We'll see you all at cocktails, I believe, shortly after 5:00 P.M. There's a reception. Thank you once again.

Amy Bunszel
EVP of Architecture, Engineering and Construction Design Solutions, Autodesk

Thank you. Thank you.

Speaker 3

Thank you. Let's give a round of applause.

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