Methods used to drive channel results
Leading 3D design, engineering, and entertainment software provider Autodesk (ADSK) continues to boost its channel mix by offering better incentives to its indirect channel partners and improving its online presence.
The company’s direct and indirect sales channels generate ~30% and 70% of its total revenue, respectively. Hence, moving to a direct channel may not only boost the company’s top line growth but also give it better access to its customers.
In the graph above, we can see the revenue trends of Autodesk’s direct and indirect sales channels over the last five quarters.
Channel mix performance
In fiscal 4Q18, the revenue from Autodesk’s direct sales channel came in at $166 million, up 9% YoY (year-over-year). In the last five quarters, the revenue from the channel has risen at a CAGR (compound annual growth rate) of 2%.
Similarly, in fiscal 4Q18, the company’s indirect sales channel generated $388 million in revenue, up 19% YoY. In the last five quarters, the revenue from the channel has risen at a CAGR of 5%. Autodesk is heavily dependent on Tech Data Corporation (TECD) and its global affiliates, which contribute the bulk of its indirect business.
Going forward, the company expects its channel mix to shift more toward the online direct channel. However, it believes that the indirect channel will continue to deliver support to the bulk of its customers despite the change in its business model.
In order to drive its direct channel sales, Autodesk has created online user communities and invested in the online portal to improve its service.