Good afternoon, everybody. Thanks again for joining me. I think this is a software room, although I've been moving around all day. Welcome to day one of the tech conference. My name is Tyler Radke. I co-head the software sector. We have Autodesk here. Great to have Jim Lynch, the SVP and GM of Autodesk Construction Solutions, and then, Simon, in Investor Relations. I think I'm going to first turn it over to Simon to read the safe harbor to make this conversation even more exciting.
Sorry.
Simon, over to you.
The best bit of my day. We may make forward-looking statements during the course of this presentation. Please refer to our SEC filings for information on risks and other factors that may cause our actual results to differ materially from these statements. Okay, over to you.
Awesome. So, Jim, thanks for coming. I think you've been to our conference a few years in a row now, but it'd be great if you could just provide a background for folks unfamiliar. What do you do at Autodesk? What are kind of the key segments that you oversee?
Yeah, that's great. Thank you for having me today. Good to see everybody. So, I am responsible, I lead the Autodesk Construction Solutions organization, which is the team at Autodesk responsible for building the products, the go-to-market strategies, and the customer experience for our construction global construction solutions. And I've been doing that, I've been with the company for quite a long time, over 25 years, and I've been leading the construction business for the last five.
Awesome. Awesome. So going high level, I guess the, you know, digitization has been a theme at Autodesk for a while, and specifically, the, the building information model. You know, those have been big themes in the construction industry. Can you just talk about where we are in, in the adoption of, of digitization across the construction industry, and how Autodesk is, is benefited, and kind of how you're going to monetize the, the next wave?
Yeah, absolutely. It's a, you know, I think everybody knows it's a really exciting time for construction technology. You know, not long ago, McKinsey had a study that said that construction was, you know, only better than hunting and fishing when it came to adopting digital technologies. I think the industry has come a long way. I was part of the team that brought Revit into Autodesk back in 2003, and part of the team that really helped to socialize BIM and make BIM a household name in design and engineering. So, while we haven't made that level of progress yet in construction, I'm very optimistic that we will. I think, you know, the industry suffers from low margins, lack of predictability, lack of safety, basically high risk, and high inefficiencies.
And so our customers around the globe are very clear that they see technology playing a major role in helping them to drive a more predictable business and drive more predictable outcomes. Now, I think we've made fantastic progress at the large enterprise-level, multinational companies. I think we've made very good progress at what I would characterize as the mid-market, general contractors and subcontractors. I think where we still have a lot of room to grow there, but I think where we have tremendous opportunity is really driving change with the smaller subcontractors and the smaller general contractors. So I think, you know, from a, selfishly speaking, from an Autodesk opportunity, you know, I think it's about really monetizing all three of those segments, if you will.
The enterprise, the mid-market, and the low end or territory, as we like to refer to it, because there is a lot of room for growth. You know, we started working on Autodesk Construction Cloud around five years ago. You know, in the first couple of years, we saw construction companies around the globe, you know, acquiring, you know, one product, maybe two. And, you know, fast-forward five years later, and we've seen incredible growth of construction companies in all of those segments, embracing more you know, more and more tools and workflows that we offer. So we've made great progress, but we have such a long way to go. It's a $15 billion TAM, as you know, and I think technology has really just, you know, scratched the surface.
Yeah. Okay. And certainly Autodesk over, certainly over your career there, but over the last five, seven years, has made a number of acquisitions to enter this space. Can you kind of just talk about where we are in that maturity of the product? Because I think collectively you've spent, you know, over $1 billion in buying all these things and tightly integrating it. So where are we in terms of the collective product set, and how is that differentiated relative to the market? Maybe relative to a Procore-
Yep.
that investors are familiar with.
Yeah, that's great. You know, when we, when my boss, Andrew Anagnost, our CEO, established the Autodesk Construction Solutions organization, you know, he and I spent a great deal of time talking about, you know, where we want to take it. And, you know, it was very clear that we didn't want to just be a point solution provider. You know, we knew we had to go big on project management, and that was our first investment, really, the acquisition of PlanGrid. We knew we had to go big there to be able to compete, not only, you know, here in North America with our primary competitor, but globally, where there are other, you know, other regional competitors. So that was a big part of the strategy. But the other part-...
was really around pre-construction planning. So if you look at the acquisition of Assemble, of BuildingConnected, of ProEst, you know, of Pype, for example, those are all aimed at really helping us drive better outcomes for our customers during the pre-construction phase. So fast-forward, you know, here we are today. We've made great progress in integrating those technologies that we've acquired into a single platform. That is our vision. That's what we're executing on, making sure that everything we do is connected to a single platform. And that platform, by the way, consists of what we've built within the construction organization, but also the Autodesk Platform Services. Because ultimately, where I believe the industry is going is really connecting, you know, basically changing the way the world builds, so more manufactured approaches, off-site construction, modular construction, robotics.
The industry is very early there, but when the industry gets there, we'll be ready for them because of that Autodesk platform, we're able to connect design, construction, and manufacturing. So we've made great progress. We have more work to do on integrating the acquired technologies. We continue to do that work, and we won't stop there. So, you know, our work consists of integrating those technologies, but also bolstering what we acquired and making sure they're best in class. And in terms of how it helps us compete, I think I mentioned it, but, you know, it can't just be about project management. That's an important piece. In some ways, it's table stakes for playing in the construction technology sector, but really, to differentiate, it's about connecting pre-construction to what happens on the job site.
And I'll take it one step further. Given our leadership as a company in BIM and in design with Revit and AutoCAD, it's about connecting design, conceptual design, detailed design, pre-construction, to what happens out in the field, ultimately to digital twins and operations and maintenance. And I believe, you know, long term, that's absolutely what differentiates us from our competitors. I think there are other things. I think our customer experience is second to none. Our customers tell us that all the time. I also think our business models are extremely flexible. There are multiple ways to buy our technology, whether it's Flex license, whether it's single user, or whether it's account-based, where, you know, our competitors, many of our competitors offer one way to purchase, which is, you know.
Construction.
Construction. Yeah, exactly.
Right. Right. Okay. That's helpful frame. You see, I think you talked about a $15 billion TAM. I mean, clearly in the design side, you know, you have the lion's share of-
Right
... of that, that architecture TAM. I guess, what's unique about this construction opportunity? I mean, how do you kind of see your potential market share in that $15 billion TAM over time? Or how... I mean, obviously, it'd be great to get 80 or 100, but-
Yeah.
What do you think is kind of realistic over time, given what you've seen?
Well, if I were sitting closer to Simon, Simon would be kicking me, saying, "You can't answer that question." So I won't give a number, but I, I will say, you know, listen, I think Autodesk's position in design, you know, helps us, accelerates our efforts in construction, but it's not, you know, we can't be reliant on that because there, the unique needs and requirements of the construction industry, you know, we have to pay close attention to where the industry is going and help the, the industry go there. I, you know, I think the global nature of the Autodesk business, the strength of the Autodesk business from a global lens, really helps us to grab a lot of that, market share as we expand around the globe. We already are, of course, we're, you know, we're growing in EMEA, in Europe.
We're growing in Asia Pacific, particularly in ANZ, Australia, New Zealand, Singapore, and Japan. And our channel partners, for example, really help us reach those other countries that today we may not have our own resources in, but we have very strong channel partners that we've enabled to be able to sell and deliver the value of Autodesk Construction Cloud.
Yeah. Awesome. And, you know, just shifting gears a little bit to the macro environment, I know we're not going to get into a mid-quarter update right, Simon? But, yeah, one of the big questions we get is just around commercial real estate.
Yeah
... exposure, you know, obviously fears of recession. There's obviously a lot of nuance, right? I mean, it's hard to necessarily approximate what commercial real estate exposure looks like for Autodesk.
Mm-hmm.
Can you just kind of talk about what you're seeing on the ground and, maybe why the... Certainly, the numbers last quarter were a lot stronger than investors expected.
Yeah.
What's kind of causing this resiliency, despite kind of this continued noise on the macro front?
Yeah. So let me start with the construction view, and I'll-
Okay.
I'll hand it over-
Yep
... to you. But I think, you know, the things that we watch in the construction business, we do watch the Architecture Billings Index, the ABI index, of course. We watch indicators from the Associated Builders and Contractors, which suggests, you know, a nine-month backlog. Customers roughly have a nine-month backlog. I fact-check that a lot, often with our global customers that I speak to regularly, and it's pretty. It's actually pretty consistent. It's, you know, backlogs around nine or 10 months, which is pretty good. We also, you know, BuildingConnected is our bidding software, over one million builders, if you will, on the BuildingConnected network, and we see bid activities continue to increase on that.
So all of these things are pointing, you know, that there's... You know, our customers are pivoting.
... You know, those that were just focused on commercial are really looking at things like data centers, and other, other, other opportunities to drive their business. And I think they're finding them. Honestly, I think one of the biggest challenges for the industry is finding the workforce to actually deliver the projects. Every customer I talk to globally, really bar none, talks about the challenges that they have finding workers, and the fact that they've had to turn down projects because they can't get the workers. Which, by the way, I think is another opportunity for construction to step in, not to replace the workers, but to help make the workers that are there today more efficient and more productive. So Simon, let me, let me turn it over to you, because I know you have some very strong thoughts on commercial real estate.
Yeah, I mean, first I would say, you need to separate the commercial real estate as a capital structure-
Mm-hmm.
-from commercial real estate as an asset, sort of an interest-generating asset, a yield-generating asset. And so as a capital structure, commercial real estate has exactly the same issue as all other assets when interest rates go up, which is the value comes down. And that's a particular issue in commercial real estate because it's liquid, it's complicated, and it's leveraged. And so you've got a bunch of issues which, you know, will likely end in bankruptcy for those structures. And banks, well, some of them will end up owning them, will end up owning those, that commercial real estate. But then once that's happened, you have commercial real estate as a yield-generating asset. And there are two overwhelming indicators as to whether, commercial real estate is generating yield, and that is: how old is the asset?
If it's more than 10 years, it's much less likely to rent out if it's than if it's less than 10 years old. And is it LEED compliant, so compliant with the latest sustainability regulation? If it isn't compliant, it's much less likely to rent out than it is if it is compliant with sustainability regulation. Once you get rid of the sort of capital structure issue and the whole process around that, well, then you have a yield-generating asset. If it's generating yield, then it can be packaged and sold on. And if it's not generating yield, then something needs to be done to it for it to generate yield, which will typically involve using our software to either knock it down and rebuild it or to refurbish it.
Either refurbish it as office or to refurbish it from commercial use into residential use. So there's a bunch of stuff there. So I think the big issue, because it's really a question around regional banks, and your banking analysts will know a lot more about this than I do, but I think the bigger issue is around not so much commercial real estate per se; it's what does the credit contraction in the regional banks do to the speed of the U.S. economy, in addition to the Fed rates? So I think it's a broader macro issue, which is not specific to us, rather than a commercial real estate and Autodesk issue, specific issue.
Yeah. And, and to Jim's point, clearly, some of your big customers are pivoting.
Definitely.
They have nine-month backlogs, and so. Absolutely. Other projects. Along that line, I mean, you, you referenced-
Yeah.
Data centers, and I know, there's a lot of talk about infrastructure, but let's talk about maybe the good segments behind, beyond commercial real estate. Like, where, are you seeing both the strongest macro trends, as well as the strongest digitization trends and maybe firms that are, you know, more focused on subcategories of-
Yeah
... of construction?
I mean, I think, you know, where, where we're seeing our customers pivot, we're seeing the growth, and I think it's, you know, no secret. Definitely data centers, we talked about that. Warehouses, hospitals, schools, multifamily residential are some of the areas that our customers are turning to. Now, of course, some of our customers also perform what we call horizontal construction or infrastructure projects. So, you know, those that do both are, you know, they're really, you know, they're doubling down on the infrastructure piece as well. Not only here in the U.S. because of the infrastructure bill, but, but globally as well. So we're seeing a lot of focus there. I think for those that have traditionally done, you know, horizontal construction, for them, it's a bit trickier to pivot into infrastructure.
But what they are doing is they're getting involved in those projects by building, you know, railway stations, for example, airports, which, you know, are in fact classified as infrastructure projects.
Yeah.
But that, that, that's what we're seeing in terms of pivot.
Yeah. Okay, great. One of the things that you talked about at the last earnings call was just kind of the integration of the Autodesk construction team and the broader AEC team, and it sounded like kind of the worst was behind the company in terms of, you know, adapting to that new structure. Could you just kind of talk about the new vision? What are some of the advantages of having this integrated approach?
Mm-hmm
... that you expect to reap over the coming quarters and years?
Sure. Let me just clarify. What we did in Q1, what we did to start the year, is we moved the construction sales team over to the Autodesk worldwide sales team. This was something that, you know, Andrew and I had talked about, and Steve Blum, our COO, had talked about, really when Andrew created Autodesk Construction Solutions. Because what we wanted to do was we essentially wanted to incubate a sales team focused 100% on construction. And if you think back to our PlanGrid acquisition, you know, everybody looks at the PlanGrid acquisition and thinks it's all about the technology, and the technology and the people were a huge part of that acquisition.
But the other part of the acquisition that I was deeply, deeply attracted to was their sales motion, this, you know, ground up approach, if you will, because Autodesk has traditionally been, you know, really strong, top down. But I really like the PlanGrid approach of going to the job site, you know-
... getting the project manager to give it a try, give it a credit card, and then expanding from there. And so we wanted to incubate that idea within Autodesk Construction Solutions. So as we did the acquisitions over the last five years, the sales teams that came in through those acquisitions stayed as part of the construction sales team. But we always had the vision and the plan to, at some point, integrate it back into the larger Autodesk sales organization. And the reason for that, really twofold. The main idea is: How do we get more feet on the street? And so by moving the construction sales team back with the worldwide sales team, we drove more efficiencies. And what do I mean by that?
Well, over the last couple of years, we had, you know, account executives from the construction side that would be in construction companies selling the construction portfolio, waking up every day, only selling construction. The same time, we had worldwide sales account executives selling the design portfolio. So, you know, in many of these accounts, we had two account executives or even account teams selling, and so we really wanted to streamline that. At the same time, the same was true on the other side, right? We had in design, on the design side, you know, that's where the worldwide sales team shined. And in some cases, we would bring in some construction sales teams to help sell some of the construction portfolio. Now, we have one account owner on both sides. We have overlay teams on both sides.
So the account executive that's responsible for selling into a contractor has an overlay team that helps him sell design and vice versa. So drives more efficiency. That was one of the things we wanted to do. The other is just, you know, particularly as it relates to our channel. As you know, Autodesk sells both direct and indirect through a global, worldwide channel network, partner network. And so two years ago, we turned on part of the channel in the construction side of the business. We wanted to be very, very select. Autodesk today has over 1,500 global channel partners. For construction, we started out with about 20. We've since, you know, increased that number up heading towards 50. But ultimately, what we wanna do is we wanna tap into that network globally.
And so that's the other value of moving the construction sales team back into or over to the worldwide sales organization. So as Andrew talked about during the earnings call, there are a few bumps in the road as we work through quota and account assignments. You know, and we've worked through those, and we're heading back in the direction we wanted to head back in. So-
Okay.
That's essentially what we did.
Yeah, and not losing that bottoms-up approach then.
Not losing, no. That's the other thing.
Yeah.
We still have that, and you know, we'll continue to grow that because it's an effective way to sell into construction. It really is. As is top-down, by the way.
Yeah.
It's not one or the other. It's, it's really that, you know, two-pronged approach, if you will-
Yeah
... that I think is, you know, helping us to win.
Right. Right. Okay. Okay, great. I guess one bigger question on the AEC side of the business, which I know is not. The design side is not quite your focus area, but-
But I spent a lot of time there.
Yeah, you know it.
Yeah.
But as we think about Autodesk's long-term targets, not to ask you a financial question, but you know, there's kind of a nice balance of pricing uplift versus unit growth. Just as we think about the long-term drivers of unit growth within AEC. Obviously, lots of contractors that they can come onto the platform, that's great. But I guess on the design side, what are you kind of seeing on, you know, the unit growth? Obviously, you have non-compliance users you can continue to monetize, but how are you just kind of thinking about the ability to get that unit growth over time? What are kind of the levers that you have?
Yeah. I'm gonna let you start-
Okay.
And then, I can fill in the blanks.
It's, it's really a bunch of things. Adoption of BIM, building information modeling, the penetration there is still relatively low relative to the size of the opportunity. So we talked about, for example, in our Q4 earnings call, how U.S. Departments of Transportation are beginning to adopt BIM into their workflows, and that opens up a new significant opportunity within U.S. infrastructure, which is currently populated by one of our peers, mostly. And we know that's an opportunity because other public sector infrastructure in other countries have already done it, and we had a realized opportunity there, too. So that's one opportunity.
You know, more broadly, in infrastructure, you've got new existing verticals like road, rail, and airports, and then we added water recently as well, so sort of adjacent verticals, adding new adjacent verticals within infrastructure. You've then also got new verticals within, you know, architects and engineers. So one we talked about a few quarters ago is electrical engineers. There's about one million electrical engineers globally. Our penetration there is about zero. And through our partnership with Schneider Electric, which we announced at AU last year, we're hoping to increase it from something greater than zero over time. Just to put that number in context, Autodesk, as a whole, has about, what, six million subscriptions in total.
one million incremental users in what you would assume was our most well-penetrated market is in itself quite a significant opportunity. Still good opportunities for us to grow, even in what you would assume was our most penetrated market.
Okay. And that's one million electrical and-
Correct.
Okay. Okay. Which obviously are used in construction projects.
Correct. I think the first point that you made, Simon, around BIM, you know, BIM adoption continues to grow. It will continue to accelerate as we see more and more BIM mandates across the globe.
Yeah. Yeah, absolutely. I wanted to hit on the Generative AI topic, which, you know, I think for Autodesk, I think you were using the word generative well before Generative AI, to talk about generative design, but-
Yeah.
Specifically, I'm curious how you... And you have a conference coming up, well, I'm sure we'll hear more, but how are you thinking about injecting generative AI capabilities, both in the Construction Cloud side, you know, helping those workflows, as well as the design side?
Yeah. So let me answer the construction, and then I know you-
Okay.
-get all excited about-
Yep
the GenAI initiative. So I think, you know, from a construction standpoint, this is the other thing that's super exciting, the conversations that we're having now with some of our larger customers. You know, they've really progressed in terms of what they're looking for. Everybody is talking about data. One of my favorite quotes this past year is, we had one of our customers say to me, "We consider ourselves a data company that builds buildings." And that is the mentality that we're seeing more and more. 'Cause they realize they're sitting on this goldmine of information if they can figure out how to tap into it.
I think that's where Autodesk can play a role, again, because it's not just we don't just have the project management information, but we have, as we continue to tie these workflows together, we have the design information, the pre-con information, the site information, ultimately, what goes out for maintenance and operations to Digital Twins. So the idea of applying AI, generative AI, to drive more efficient workflows, smarter search, you know, more insights, our customers are always saying, "If you can just help us predict issues and prevent issues before they take place," you know, that's worth gold to them.
Mm-hmm.
So that's what we're doing. That's where we're going, specific to construction, and you're gonna hear a lot more about that. But let me hand it over to you, 'cause I know you like to-
Yes
... clarify gen, you know, our Generative Design, where we started a couple of years ago on the manufacturing side to GenAI.
So, I've only been in the company three years, but a number of people who come up to me and said, "Oh, the first time we heard about generative design was when Autodesk talked to me about it five years ago." So a lot of the stuff that people are talking about today is stuff we've been doing for years, already leading the industry, but it's not really what I'd describe as generative AI. It's more of a sort of parameters-based, sort of machine learning-based type of product. The generative AI is more sort of on the creative side, coming up with something new. There can be a problem with that sometimes, that can't actually be built, sort of from an engineering, physics perspective, but that's something that we need to address.
But the, the key point is to get to generative by AI, there's a bunch of rail tracks that you have to lay before you can even start doing it. And the most important thing is that we've begun laying those train tracks years ago as well. So sort of put it into really two buckets. One is around sort of the data itself, and, and so Jim sort of began to sort of touch on some of this, which is, first of all, the vast majority of our customers' data is locked in either a digital or, in many cases, a physical cupboard, and is not amenable to, AI, you know, or machine learning. So it has to be put into the cloud, but you have to have a destination, a structured destination.
So the fact that we already have our industry cloud set up and have a destination for our customers' data to go to, whereas most of our peers haven't even begun to do that, it means we're already well established in some of that first step. The second step, again, which Jim alluded to, is having the breadth of data that you have access to. The vast majority of our peers have single workflow data, which they're essentially moving on-prem products to the cloud, whereas we have access end-to-end to the vast majority more data, end-to-end process. So our data advantage as we move to the cloud gets much bigger relative to our traditional industry peers. And then thirdly, it's around your access to the data, and the access to the data is dependent on really two things.
One is your legal access to the data, which is determined by your end user agreements, because, again, we've been thinking about this for some time. We're in good shape as it relates to that. But then it's around your ethical access to the data and what you should be able to use. And so one thing that makes us wince a little bit is when we hear a bunch of companies saying, "Oh, yeah, we're gonna make a bunch of money out of AI," when it's not actually their data, it's their customers' data. And it's how you bring, you know, with your customers, and help them create value from their data, you know, enabled by and powered by, Autodesk, because Andrew was talking about on our sort of Q2 call.
It's really that ethical component that is a sort of key area of focus for us.
So that's sort of one element to it, the data side. And then the second area is the scaling side of it, is how do you scale AI in a way, that is sustainable, from an efficiency perspective? There are really two important initiatives there. One is, all the work that we'll be doing on Autodesk Platform Services. So for those of you that also cover, Intuit, it's a very similar process that we began a couple of years ago, which Intuit started sort of four or five years ago. The reason I mention them is that Raji joined us from Intuit a couple of years ago, really with the, goal of doing three things. One is allowing our customers to build more on our platform. Secondly, to allow us to move from file-based data to cloud-based data.
And thirdly, to allow us to have many more common components and a common platform, so build once, use many times, to be able to engineer more efficiently. And so that will enable us to do many things, one of which is to scale our AI efforts over time. But the second component is also to make sure that you have the right pricing model, because if you try and put high compute workflows and products through a subscription pricing model, you're gonna blow a hole in your margins pretty quickly. So you have to have a variable consumption-based pricing model.
And again, that's something that we've been doing for years as part of the EBAs, you know, and two years ago, in our mass market version, which is Flex, is having that consumption-based pricing to make sure that you have a price attached to the higher compute cost as you create, high-value AI workflows. So all of those train tracks, the most important thing is, you know, take time. We are well advanced in absolute terms, but also even more and even better advanced relative to our industry peers, in all of those areas.
Yeah, and I guess that, like, as you think about the monetization of that, is it – and I think it sort of ties back to the release of these cloud data models that you highlighted at AU, but is it just attracting more users to the platform? Is it more consumption-based pricing? How do you kind of think this gets monetized over time?
It's really around how we help our customers realize value from their data. In some ways, the data that we you know help our customers get access from is a unique data set. So all of the large language models which are being built are built on publicly available information and is therefore more of a commodity. The data that our customers have is very much more valuable because it's industry specific and is unique to those unique to those industries and is precise in what is a very... And what the reason we talk about multimodal models, we don't care so much about the relationship between words as the relationship between objects which is another order of complexity.
You know, and how a sort of piece of rebar relates to a sort of pipe, and how those two things interact with each other. So it's not just about how words interact with each other, it's how objects interact with each other. And having the, you know, with our customers, the data to be able to make those relationships and establish those relationships is gonna be enormously valuable.
Yeah. Yeah. Okay. So going back to kind of the one of the issues you mentioned that are impacting customers, Jim, is the—we've talked about a lot about the staffing challenges, labor challenges. I think one of the interesting things about Autodesk, through its history, is it's particularly on the design side, it's done a great job of offering free products for universities, the education sector, which ultimately creates those paid users over time. How are you kind of thinking about that on the construction side? You know, obviously, a lot of construction workers don't go through the traditional college route—
Yeah.
But maybe through trade industries, offering training to get kind of the next generation of construction workers trained on Autodesk Construction Cloud.
Yeah, it's a great question. It's a really important question. I mean, obviously, we do offer our construction software free to universities, to construction management programs. But you're right, I mean, a lot of the labor that's going onto project sites, in particular, are not going to Wentworth College for project management. They're coming out of a technical or vocational school. So we wanna make sure that we continue to partner with unions. We partner with unions across the U.S. and in Europe to make sure that they not only have the software but that they have the assistance they need to help the workers of tomorrow embrace some of these tools. So we're investing there. We have been investing there.
We're also, you know, we've been very active in, in, our Autodesk learning site, if you will, our construction learning site. We've seen enrollment increase of last year, like 188%. So there is a deep desire for individuals and teams to learn this technology. So we wanna make it available to them, through the unions, through the universities, and through, you know, sites like the construction learning site, which is, you know, we continue to push content up there. But it's a big task.
It's a really big task, and you know, I think our customers are looking at it very, very seriously and thinking about how they can invest to bring more labor into the-
Yeah.
into the industry.
Okay, great. We have a few minutes left. Just wanted to see if there's any questions from the audience. Yeah, Scott?
Sort of a natural question. So we're talking about some of these initiatives, IRA, Build Back Better. Are, you know, are you able to sense that tilt then in your billings activity or booking activity?
Um-
So the IRA is a cherry on a much larger cake. Which is total construction infrastructure spend, is that there are $billions and billions. Even before the IRA, there's $billions and billions spent on infrastructure every year. So even without the IRA, infrastructure is an awesome business to be in. But the infrastructure bill is just an incremental to it, it's nice to have, but it's not a game-changing change in the total infrastructure market in total. What is important, though, is, and this is what...
If you wanna get, pull Chatroulette from what I'm about to say, I'm just watching the clock nervously, is look at our Q4 opening commentary, Q4 from last year, 2023 opening commentary, where we talked about how the U.S. Department of Transportation, 20 of them, led by the Department, Iowa Department of Transportation, are beginning to adopt building information modeling workflows and moving workflows to the cloud to connect them end to end and workflows into the cloud. And whenever customers say, "We're moving to BIM and moving, you know, connecting workflows in the cloud," it's like sort of Autodesk puzzle and bingo. And that's an environment in which we've been very successful in virtually every other type of construction market.
There is a very small, with a unfeasibly long name, which I can't remember, pot of money, about $100 million, within the infrastructure bill, which was designed to incentivize the Departments of Transportation to start digitizing their workflows. If you look on our Q2 call in the Q&A, Andrew mentioned the name of the program, but I can't remember it off the top of my head. So that is in the context of overall infrastructure spend, is very small, but it's encouraging the Department of Transportation to move to the cloud, to become more efficient, to move to Building Information Modeling. And that's more important because then that starts making the cake, and not just the cherry, more accessible to us.
Acknowledging the fact it'll take, you know, a long time for them to move their workflows, but that could, you know, could take a decade or more to do.
Yeah. Great. Maybe, Jim, in the last minute or so, just talk about now that you have the integration of these teams under your belt, what are kind of your top three priorities to close out the year and head into the next one?
Yeah, I mean, I think, you know, our priority is about, you know, from a product perspective, a couple of things, continuing to build out and deliver the workflows that are most meaningful and impactful to our customers. It's also about making sure that we're, you know, as we've seen tremendous growth in monthly active users and monthly active projects around Autodesk Construction Cloud and around Autodesk Build, in particular. So we wanna make sure that we are building world-class services, right? So making sure they scale, make sure they're performant, and make sure they're reliable. So equal investments there. The other thing from a go-to-market perspective, continuing to build our brand in construction and continuing, you know, our global expansion.
And now with the sales team, one sales team, I really think, we'll, you know, we'll be- we're ready to tap into the broader Autodesk channel network. Not everyone, because they need to have, and they need to, they need to show commitment, and they need to have the skills to be able to service the customers. But, you know, that creates a tremendous opportunity. Then the third area is around customer experience. I talked briefly about that earlier. It's a major area of investment for us. We wanna make sure when a customer buys our technology, they immediately embrace it, and that we're there to help them through any, uh, hiccups or trip ups that they experience. So it's really about product, it's about go-to-market, and it's about customer experience.
Awesome. Jim, Simon, thanks for joining us.
Great.
Awesome. Thanks, everybody. Thank you.
Thanks so much.