A Wide-Moat Firm That Thrives on Complexity--Page 3
Autodesk has been affected by the economy but should prosper long term.
Low Bargaining Power of Suppliers
Although Autodesk licenses certain simulation technology for some of its products from Ansys (ANSS), we believe this provider has little advantage against the company. First, the value of Ansys' own advanced simulation solutions is predicated upon their compatibility with Autodesk's CAD solutions. Therefore, Ansys has little incentive to destabilize this relationship, in our opinion. Second, Autodesk has been acquiring small companies to improve the unique aspects of simulation capabilities of its solutions for specific industries. Although the company's technological prowess relies on the software and engineering skills of its workforce, we believe that the global scale of Autodesk's research-and-development operations minimize its dependency on labor in a specific region.
Rivalry Among Current Competitors
The CAD industry is characterized by stiff competition based on technological features and breadth of solutions, both subject to rapid change. As a result, rivals tend to match each other's technological innovations within a short period. For example, Autodesk and Dassault have each strengthened their respective building-information-management capabilities through the recent acquisitions of several companies. Similarly, to match Parametric's capabilities in the product documentation market, Dassault recently acquired a small provider of such technology.
Rafael Garcia does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.