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Software maker Altium rejects $3.9B takeover bid from Autodesk

• kiba 5y ago
  Do we really need big companies constantly buying out the competition?
  • onion2k 5y ago
    Of course not, but it's slightly ironic asking that question on HN where the only viable exit strategy for many startups is to get acquired. It's also worth noting that Altium didn't say no. They said the offer wasn't high enough.
  • philjohn 5y ago
    Seems like a growth hack - buy your way into a market. Capita, in the UK, has had a reputation for only growing through acquisition and not organically according to some commentators.
    • duped 5y ago
      Autodesk is already in the market. They bought CadSoft (EAGLE) in 2016.
  • delfinom 5y ago
    Pretty much normal unfortunately in industries that aren't so visible in the public like big tech companies.
  • inshadows 5y ago
    Who are we and who are them?
  • sangnoir 5y ago
    Isn't most of the VC ecosystem predicated on that? You can't have unicorns without unicorn-buyers with deep pockets.
• madengr 5y ago
  The nice thing about Altium is that they also cater to low profile customers, like me. I have been using it for 27 years, and if Autodesk buys it, it may turn to shit; probably some cloud BS, which is the way things are going.
• knolan 5y ago
  I’ve recently started to use Autodesk’s Fusion 360. It’s an abomination! It’s so user hostile and constantly getting in the way of getting work done. Years ago (2001 ish) when I first started to learn CAD I used PTC’s Pro/Desktop. It’s a simple package and not without its faults but when you consider the pace of technological development since then it’s appalling how much CAD has stepped backwards. Everything is clunky, cloud strangled, ribbon interface befuddled and runs like molasses.
  • halotrope 5y ago
    User hostile describes the whole Autodesk suite really well. To bad that the CAD offerings like FreeCad are still a bit hard to use.
    • dagw 5y ago
      It's not just that FreeCAD is "a bit hard to use" it's that it has maybe 3% of the features available in the AutoCAD suite of tools. Plus there is the massive collection of third party industry specific tools the build on top of AutoCAD.
      • craftinator 5y ago
        I disagree about the 3% of features. With plugins and the massive amount of extensibility possible in FreeCAD, I think it actually has most of the functionality of AutoCAD, let's say 80%, and a good number of features that AutoCAD is missing. However, discoverability of these features is abysmal (which is why most people think that they don't exist), and it can be VERY hard to use, depending on what you're trying to do. I definitely couldn't replace Solidworks or Fusion360 with FreeCAD in terms of speed of use, especially if I was sitting down with all 3 for the first time.
        • dagw 5y ago
          OK 3% is was probably harsh, but if you look across the whole AutoCAD suite at things like their MEP tools, AutoCAD Civil, AutoCAD Map 3D and so on you'll find whole domains of features that FreeCAD doesn't even begin to address.
• halotrope 5y ago
  The increasing consolidation in the professional software market is concerning to say the least. I remember back in the day Macromedia made fine authoring software like Flash and Director, the best lightweight vector software Pagemaker and others. Since adobe gobbled them up they have a quasi Monopoly on design and publishing tooling. Everything became a slow, entangled, expensive mess now called "Creative Suite". Same with Autodesk and how they turned e.g Maya from one of the greatest software packages of all time into a bug-ridden shadow of its former self. Tools like Blender and KiCad really get my hopes high that we have a century of industry standard open source software with good UX ahead of us. I would be much more to e.g pay 50 bucks a month to blender foundation than being a hostage of Creative Cloud. I am very happy that Altium decided the way they did.
  • swalsh 5y ago
    "Everything became a slow, entangled, expensive mess now called "Creative Suite". There's probably an opportunity to make better versions of these tools. Even their crown jelwels. If a decent enough quality version of lightroom that works with Linux comes on the market I'll cancel my creative suite subscription instantly.
    • ilmiont 5y ago
      "If a decent enough quality version of lightroom that works with Linux comes on the market" It's called Darktable. https://www.darktable.org/ https://www.darktable.org/
      • wil421 5y ago
        Last year I used Darktable and Lightroom side by side. They were both steaming piles of crap. Lots of bugs, crashes, and extremely high CPU usages. Darktable was slightly less buggy on MacOS but not much. Lightroom was easier to figure out but I’m not really using anything but basic features on both apps.
        • FpUser 5y ago
• whoknowswhat11 5y ago
  Wow - surprised they rejected takeover. Most of these go through after some negotiation on price - very interesting to see a firm look to preserve itself - guess I'm curious what boards plans are.
  • dbuder 5y ago
    Altium is a strategically important entity, the board isn't making a decision here.
    • whoknowswhat11 5y ago
      Very interesting and unusual - these normally come down to $$$
  • gimmeThaBeet 5y ago
    “The Altium board appreciates the interest expressed by Autodesk ... however, it considers that the proposal significantly undervalues Altium’s prospects and therefore rejects the proposal at the current price,” the company said in a statement to the ASX. Unfortunately, this should probably be viewed as a negotiation on price. They certainly don't have the door closed.
    • sigstoat 5y ago
      > Unfortunately, this should probably be viewed as a negotiation on price. They certainly don't have the door closed. very few sane organizations would ever completely refuse. everything is a negotiation.
      • gimmeThaBeet 5y ago
        That's certainly fair, I think the big exception would be if the board feels they are at a local minimum, and that the potential acquirer is being overly opportunistic. Partly that's trivial, because that's when companies frequently make these types of bids. I guess what I'm trying to say, is that if a company wants to advocate the case for proceeding as an independent entity, they will make it abundantly clear. This is not that.
• genmud 5y ago
  Not surprising that Altium slaps a gift horse in the mouth. I rarely see such a mis-managed company with such a leadership vacuum. Autodesk probably dodged a bullet here.
• marcodiego 5y ago
  For market segments where FLOSS can't penetrate, consolidation and oligopolies seem unavoidable. The costumers behave mostly favoring a winner-takes-all approach that eventually kills any competition. It took years until arduino-like tools got good enough to eat the mcu proprietary tools lunch. We're still a few years away until symbiflow does the same for fpga. But for markets where FLOSS can't penetrate, I don't see much hope.
• deleted 5y ago
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• doublerabbit 5y ago
  If your company is worth $3.9B why would you sell it? I can dream on how I could make the next-best product, but I don't dream about selling it. Maybe I'm missing business 101, why would you want to give up some your large diamond to some other company?
  • darkwizard42 5y ago
    There are many reasons... 1/ You don't see this as giving up your diamond but making it shine bigger and faster. You believe that your $3.9B valuation can grow faster with the help of a larger partner perhaps this is best for you and your investors. 2/ You have been running a company for some time and you are tired of running it or want to get out and "cash out" your hard work. 3/ You don't believe you can maintain a $3.9B valuation under future market conditions or upcoming competition and so you are willing to take the premium now (better for you and investors) Just to name a few
  • lotsofpulp 5y ago
    > Maybe I'm missing business 101, why would you want to give up some your large diamond to some other company? Because you want $3.9B of cash instead of a company worth $3.9B. Also funny since I would much rather have $3.9B in cash than a large diamond “worth” $3.9B, since diamond prices have been falling for many, many years, compared to alternative stores of wealth. And also, I would get zero utility from a diamond in the first place.
    • deleted 5y ago
      [deleted]
• ohazi 5y ago
  I'm okay with companies charging money for tools that are genuinely clever and innovative, but when the world eventually builds enough critical work on top of those tools, we inevitably end up in a hostage situation like this one. The negative externality of the public losing access to the tools needed to build and modify essentially all of technology eventually exceeds even the tyrannical rents that a monopolist or hedge fund can extract when the public suddenly has no other option. Maybe proprietary software should be required to go open source after 20 or 30 years.
  • jayd16 5y ago
    >Maybe proprietary software should be required to go open source after 20 or 30 years. That might be a bit extreme but something like enforced export tooling and/or open standard interop might be feasible.
  • amirhirsch 5y ago
    Copyright protection lasts 70 years so in 70 years we'll have VMs running today's software for free. It's going to be exciting times for my great-grandchildren. Imagine how much better the 22nd century will be from that network effect.
    • vkou 5y ago
      It won't, because the limiting factor of what makes a century good is unlikely to be based on the quality of its professional tooling. Tooling is pretty universally in a 'good enough' state. Also, you could pirate and run 90s software today if you wanted to. Almost nobody does (And it's not because nobody pirates software...)
  • Pet_Ant 5y ago
    I think there is a tipping point where something becomes so ubiquitous that it needs to become something like a common carrier or an open standard. The government could mandate something like any file format that has 20% or more has to be an open standard.
• nerfhammer 5y ago
  Keep in mind Altium is already publicly traded and at the moment has a market cap of $3.85B
• Yoofie 5y ago
  I am amazed that well capitalized companies over $x million are even allowed to merge/be acquired at all (by default). In my mind, after a certain point, it clearly becomes a case of anti-competitive behavior and should not be allowed unless they can prove otherwise.
• fxtentacle 5y ago
  They should sell as long as they still can. A year ago Altium positioned itself as the hobbyist friendly EAGLE alternative by advertising that they still sell affordable permanent licenses when Autodesk forced subscriptions down everyones throat. Recently, they burned those bridges by insisting on subscriptions, making the cheapest license $10k all while still keeping the old advertisements listing a $2.9k price online. And for hobbyists, $10k is too steep. I tried to reason with them, but to no avail. I know of several other people who had a similar experience. Recently, the KiCAD nightly built has gained an almost flawless Altium importer, better OpenGL rendering with supersampling, and there's a patch in the pipeline that'll let KiCAD open, modify and display Altium documents almost pixel-perfect. And thanks to automated tools, the free offline-capable KiCAD library is now exceeding the scope of the paid online-only Altium vault. I'd give them until the KiCAD 7.0 stable release expected to arrive in 1-2 years.
  • delfinom 5y ago
    > And thanks to automated tools, the free offline-capable KiCAD library is now exceeding the scope of the paid online-only Altium vault. Well, you say this but as a KiCad dev I will say our library team is heavily understaffed and entirely burnt out. Very few library submissions have been processed in over a year. The automation is there to validate agaisnt rules but there's some that still need to be checked manually, i.e. actually confirming everything matches datasheets, etc. It's a thankless job.
    • fxtentacle 5y ago
      That's unfortunate to hear. I agree that it's a thankless job, which is probably why companies usually pay for a service to do it instead. SnapEda charges $60 for schematic, footprint, and a simplistic 3d model. KiCAD could offer the same service but with the added benefit that components are added to the library afterwards.
      • delfinom 5y ago
        Here's the thing. We aren't an organization and most of us would probably be prohibited from joining such under the usual employment contracts. Nobody is making money from it as is. The librarians themselves are entirely self organized and basically work independently of the code base developers. They are generally not programmers at all (and don't need to be). While there are some efforts underway to start slushing around the donation balance we have gained, it takes time when everyone is largely a volunteer with limited time.
• adreamingsoul 5y ago
  I need to donate money to the people behind KiKad, FreeCad, GIMP, and Inkscape.
• stagger87 5y ago
  4B is more than 20x revenue (182m). If I understand the financial report correct, profit is only 12% of that. Genuinely asking, how does this bid make sense? Where do you make your money back? 10+ year timeframes?
• syntaxing 5y ago
  I always found it so fascinating how a new startup/unicorn that has 0 revenue can be valued at 10B when a company like Altium that has a good amount of footing in the PCB/EDA world is only valued at 3.9B
  • madengr 5y ago
    There are CAD companies that sell for far less that have much more complex software.
  • daemin 5y ago
    The startup sells a dream of immense future profit. Altium has spreadsheets full of sales, income, and expenditure which pretty much indicate what the future profit will be.
  • bsder 5y ago
    Altium's revenue is roughly $200 million USD. MBA standard valuation on that is 10-year revenue--$2 gigabucks. $4 gigabucks is a significant premium for a company that basically has no growth. My guess is that Adobe didn't want to pay enough cash and was going to be using too much stock in the deal. Altium would be a bunch of fools for not cashing out right now, though. KiCAD is right about at the level where it is going to start eating the bottom tier of customers. Even 1000 users lost would be a big hit to their revenue. We'll probably buy one last set of Altium licenses to support current designs, but KiCAD 6 will probably become our default PCB software in the next year.
• cyanydeez 5y ago
  the world needs less autodesk