Company Name

Discreet, a division of Autodesk

Address

10 Duke Street, Montreal, Quebec, H3C 2L7 Canada

Telephone

(800) 869-3504 / (415) 547-2000

Fax

(415) 547-2222

Year Founded

The Discreet division was founded in 1999 and the Kinetix group of Autodesk was formed in 1996.

Senior Management (Autodesk)

• Carol Bartz - Chairman, CEO, President of parent company, Autodesk
• Godfrey Sullivan – EVP, Discreet Division
• Dominic J. Gallello – EVP, Design Solutions Division
• Joseph Astroth – EVP, GIS Solutions Division
• Marcia Sterling - VP, Business Development & General Counsel
• Carl Bass – Chief Technology Officer, EVP of Autodesk Venture

Senior Management (Discreet Segment)

• Godfrey Sullivan, Executive Vice President of Discreet
• Mirko Wicha, Vice President of Advanced Systems Sales
• Mahmoud Al-Daccak, Vice President of Product Development
• Stig Gruman, Vice President of Advanced Systems Operations
• David Jones, Vice President Customer Support

Employees

Discreet – 520

Company Highlights

• Autodesk was founded in 1982 by John Walker.
•  Focusing on design software for the PC, Autodesk went public in 1985.
• Carol Bartz became CEO in 1992
•   Kinetix division was formed in 1996
•   Autodesk acquired Discreet Logic in early 1999 for $520 million
• Kinetix and Discreet Logic combined their product offerings and are now know as Discreet, a division of Autodesk

Product

3D Studio MAX

Product Overview

Since it’s initial release in May 1996, 3D Studio MAX has become the leader in the 3D animation tool market. One of the key success factors of  3D Studio MAX has been the product’s ability to address the needs of a wide range of 3D animation professionals. Of all the animation packages 3D Studio MAX runs across more vertical markets than any other package. It’s largest user base continues to be within the game development sector. Aside from game development, it is used in film and broadcast, corporate design, industrial design and visualization, educational, forensic, and now Internet design.

Key Features

·          real-time interface, multiple-processor support, and 3D graphics acceleration capabilities

·          shaded views with real-time feedback allow users to visualize natural, real-world environments in which they can directly manipulate objects, regardless of scene complexity.

·          maintains history of geometry creation and modification, users can return to make changes without having to redo prior work.

·          runs Character Studio, a character-animation and skinning plug-in

·          mental ray, the photorealistic, programmable and interactive rendering software from mental images, will soon be available as a separate product through selected Discreet 3D Studio MAX resellers.

·          close partnerships with Sony and Nintendo for tool collaboration for PlayStation 2 and Dolphin. 

Pricing

$3,495

Platforms

Working specifically on Windows NT, there are no foreseeable plans to move 3D Studio MAX to any other platform, such as Linux. 

Product Strengths

Since its launch, 3D Studio MAX has had a phenomenal impact on the 3D animation market. Originally priced much lower than some of its counterparts who’s products ranged anywhere from $10,000 to $45,000, 3D Studio MAX was quickly viewed as the attainable solution for professionals that had some price/performance issues. It continues to maintain strong price/performance value for users and the product’s expectance remains high.
It’s open architecture and support of third party vendors has also enabled the product to build up over 100 plug-in products for more specialized functionality.

Product

3D Studio VIZ

Product Overview

3D Studio VIZ R3 enables professionals in the architectural, land design and mechanical design sectors to designs in 3D Studio VIZ and then transfer the images directly into a CAD environment.  Used predominately for pre-visualization applications, 3D Studio VIZ has had phenomenal growth in 1999 as more AutoCAD users look to incorporate 3D visuals for presentations and design applications.

Key Features

·          DWG Linking technology enables users to include CAD data from AutoCAD 2000, AutoCAD Architectural Desktop, AutoCAD Land Development Desktop, AutoCAD Map, and Mechanical Desktop.

·          New AutoCAD 2000-inspired customizable user interface speeds learning and consistency across platforms. Non-technical users become immediately productive and experienced specialists gain extended capabilities.

·          Web-enabled Asset Browser allows you to browse the Internet from within a 3D Studio R3 VIZ scene and drag and drop design content from around the world directly into your VIZ session.

·          A comprehensive suite of multimedia tools lets you create beautiful and realistic still renderings, photomontages, animations, and panoramic renderings.

Pricing

$1,995

Platforms

Windows95, NT

Product Strengths

With the support of Autodesk behind it 3D Studio VIZ has several key strengths. First, it is able to leverage the enormous installed base of 2 million AutoCAD users.  Autodesk  has one of the strongest distribution channels in the industry which also gives VIZ an incredible advantage. Additionally, having key technology features associated with 3D Studio MAX, VIZ has a plethora of 3D functionality.

Company Positioning

The Discreet division of Autodesk has really only been in existence since early in 1999.  The idea of creating a unified presence with Discreet and Kinetix under one group has been a priority since last year. The group is working hard to create a collaborative, interoperable suite of production tools that addresses the needs of the professional digital designer. As they move forward they will remain committed to the entertainment industry, but also believe there is opportunity within the business-to-business segment for corporate and web design.

Product Positioning

3D Studio MAX

There has been a recent shift in the user profile of 3D Studio MAX. The latest group of new users Discreet is addressing is of course the Internet designers, providing them with 3D tools for the web. As web designers become more comfortable with interactive media, they are looking for new ways to differentiate their sites. As a result more corporate customers and web designers are looking to create 3D Internet content and Discreet views this as the next wave in 3D graphics. As part of their internet strategy, Discreet will remain focused on the business-to-business applications their customers are requesting. As Discreet moves forward to provide interoperable solutions to its customers, web development and functionality will be a high priority across all of the company’s target markets: film, broadcast, animation and visualization.

Product Positioning

3D Studio VIZ

Since its release in 1997, 3D Studio VIZ continues to gain more acceptance within the architectural community for design and visualization. As a result it has shifted more specialized architectural users from MAX to VIZ. Discreet sees this as a very positive move in that architectural designers understand the functional differences between the two products and are moving towards a product that best suits their specific needs.

Key Partnerships

Key to all of the animation vendors is having solid partnerships with key OEM vendors. Discreet has several large computer manufacturers that they have developed strategic product offering with including: Compaq, IBM, Hewlett Packard, Intel, Intergraph and SGI.

Competitive Position

Competition among the animation tool vendors seems to vary from any given time. At the moment Discreet views Alias/Wavefront as their most critical competitor in this space. 

1999

1998

1997

1996

Revenue

$740.2

$617.1

$496.7

$534.2

Net income

$90.6

$15.4

$41.6

$87.8

Net profit margin

12.2%

2.5%

8.4%

16.4%

As of October 14, 1999

ADSK - Nasdaq

Stock price

$ 20.0625

52 week high

$49.437

ESP

$0.66

P/E Ratio

30.4

Market valuation

$2,092 ($mil.)

Most recent results –

Fiscal July 31, 2000

·          Second quarter net revenues of $202.9 million decreased from $226.8 million recognized in the second quarter of the prior fiscal year.

·          Increases in Asia Pacific's net revenues of 45 percent were offset by decreases of 22 percent and 16 percent in net revenues in the Americas and Europe, respectively, as compared to the same period in the prior fiscal year.

·          International sales, including exports from the U.S., accounted for approximately 65 percent of Autodesk's net revenues in the second quarter of fiscal year 2000 as compared to 58 percent in the same period of the prior fiscal year.

Financial Partners

JP Morgan owns 11% of Autodesk

 (In millions)  

Net revenues:

Design Solutions

Discreet            

Total

Income (loss) from operations:

Design Solutions

Discreet             

Unallocated amounts

Total

Discreet Financial Overview

• for the fiscal quarter ending July 31, 1999 the Discreet Segment, which includes the Discreet business and the Kinetix business, represented 30% of Autodesk’s total net revenues compared to 28% for the same period in 1998.
• net revenues for the Discreet Segment decreased 7% compared to the same period.

CAD

AutoCAD, AutoCAD 2000, AEC Professional Suite, AutoCAD LT

CAD

Mechanical Desktop

DV Editing/Effects

edit* – real time PC, nonlinear editing system

DV Editing/Effects

effect* – PC composting software

DV Editing/Effects

fire* – nonlinear editing system

DV Editing/Effects

flame* – real time image processing system

DV Editing/Effects

frost* – 3D modeling/animation/rendering software

DV Editing/Effects

inferno* – digital image processing system

DV Editing/Effects

paint* – PC paint software

DV Editing/Effects

smoke* – nonlinear editing system

DV Editing/Effects

Lightscape – 3D rendering software