Autodesk, Inc. (NASDAQ:ADSK) Citi’s 2023 Global Technology Conference September 6, 2023 3:15 PM ET
Company Participants
Simon Mays-Smith – Investor Relations
Jim Lynch – Senior Vice President and General Manager of Autodesk Construction Solutions
Conference Call Participants
Tyler Radke – Citi
Tyler Radke
Good evening, everybody. Thanks again for joining the –- I think this is a software room, although I’ve been moved around all day. Welcome to day 1 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. So, Simon over to you.
Simon Mays-Smith
All right. That’s why the — best 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.
Tyler Radke
Awesome. So, Jim thanks for coming. I think you’ve been to our conference a few years in a row now. But it would be great if you could just provide a background for folks unfamiliar.
Question-and-Answer Session
Q – Tyler Radke
What do you do at Autodesk? What are the key segments that you oversee?
Jim Lynch
Yes, 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.
Tyler Radke
Awesome. So, going high level, I guess the — digitization has been a theme at Autodesk for a while, and specifically the building information model. Those have been big themes in the construction industry. Can you just talk about where we are in the adoption of digitization across the construction industry and how Autodesk has benefited and how you’re going to monetize the next wave?
Jim Lynch
Yes, absolutely. It’s a — I think everybody knows it’s a really exciting time for construction technology. Not long ago, McKinsey had a study that said that construction was 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. I’m part of the team that really helped to socialize BIM and make BIM a household name in design and engineering. And so, while we haven’t made that level of progress yet in construction, I’m very optimistic that we will. I think the industry suffers from low margins, lack of predictability, lack of safety. It’s basically high risk and high inefficiencies.
And so, our customers around the globe are very clear that they see technology playing a major role I 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 — 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 from a — selfishly speaking from an Autodesk opportunity 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. We started working on Autodesk Construction Cloud around five years ago. In the first couple of years we saw construction companies around the globe acquiring one product, maybe two. And fast-forward five years later and we’ve seen incredible growth of construction companies in all of those segments embracing 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 scratched the surface.
Tyler Radke
Yes, 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 just talk about where we are in that maturity of the product because I think, collectively, you’ve spent 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 that investors are [really aware] (ph)?
Jim Lynch
Yes, that’s great. When we — when my boss, Andrew Anagnost, our CEO, established the Autodesk Construction Solutions organization he and I spent a great deal of time talking about where we want to take it, and was very clear that we didn’t want to just be a point solution provider. 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 here in North America with our primary competitors, but globally where there are 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, of Pype, for example. Those are all aimed at really making us — helping us drive better outcomes for our customers during the preconstruction phase. So, fast-forward, 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 — basically changing the way the world builds, so more manufactured approaches, offsite construction, modular construction, robotics. And the industry is very early there, but when the industry gets there we’ll be ready for them because we 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, 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 it can’t just be about project management. That’s an important piece. And in some ways it’s table stakes for playing in the construction technology sector. But really to differentiate, it’s about connecting preconstruction to what happens on the jobsite. 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, preconstruction to what happens out in the field, ultimately to digital twins in operations and maintenance.
And I believe, long-term, that 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 our competitors — many of our competitors offer one way to purchase which is –-
Tyler Radke
[Indiscernible]
Jim Lynch
Yes, exactly.
Tyler Radke
Right, okay, now that’s helpful framing. See, I think you talked about a $15 billion TAM. I mean clearly in the design side you have the lion’s share of —
Jim Lynch
Right.
Tyler Radke
Of that architecture TAM, I guess what’s unique about this construction opportunity? I mean how do you see your potential market share in that $15 billion TAM over time or how — I mean, obviously, be great to get 80 or 100 but —
Jim Lynch
Yes.
Tyler Radke
What do you think is realistic, over time, given what you’ve seen?
Jim Lynch
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 will say, listen, I think Autodesk’s position in design helps us, accelerates our efforts in construction. But it’s not we can’t be reliant on that because the unique needs and requirements of the construction industry, we have to pay close attention to where the industry is going, and help the industry go there. 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 where 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.
Tyler Radke
Yes, awesome. And 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 one of the big questions we get is just around commercial real estate exposure. Obviously fears of recession. There’s obviously a lot of nuance, right. I mean it’s — I think it’s hard to necessarily approximate what commercial real estate exposure looks like for Autodesk. But can you just 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.
Jim Lynch
Yes.
Tyler Radke
But what’s causing this resiliency despite this continued noise on the macro front?
Jim Lynch
Yes, so let me start with the construction view, and I’ll hand it over to you. But I think the things that we watch in the construction business; we do watch the Architecture Billing Index, the ABI index, of course. We watch indicators from the Association Builders and Contractors, which suggests 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 — backlog is around nine or 10 months, which is pretty good. We also — BuildingConnected is our bidding software. Over a 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 that there’s — our customers are pivoting. Those that were just focused on commercial are really looking at things like datacenters and other opportunities to drive their business. And I think they’re finding — 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 turn it over to you because I know you have some very strong thoughts on commercial real estate.
Simon Mays-Smith
Yes. I mean commercial real estate; you need to separate the commercial real estate as a capital structure from commercial real estate as an asset — sort of a interest-generating asset, the yield-generating asset. And so, as a capital structure commercial real estate has the exact 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 will likely end in bankruptcy for those structures. And banks, well, some of them will end up owning 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. Then if it’s less than 10 years old, and is it lead compliance, so compliance related to sustainability regulation. If it isn’t compliant it’s much less likely to rent out than if it is compliant with sustainability regulation. So, if you want to get rid of the sort of capital structure issue, and there’s a whole process around that, well, then you have a yield-generating asset.
If it’s generating yield, then it can be packaged and sold off. 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 say, it’s what does the credit contraction in the regional banks due 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 also there’s specific issues.
Tyler Radke
Yes. And to Jim’s point, clearly, some of your big customers are pivoting in this nine-month backlog and so on other projects. Along that line, I mean you referenced data centers, and I know there’s a lot of talk about infrastructure, but let’s talk about the — maybe the good segments 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 more focused on subcategories of construction?
Jim Lynch
I mean, I think where we’re seeing our customers pivot, we’re seeing the growth, and I think it’s no secret, definitely, data centers. We talked about that warehouses hospitals, schools, multifamily residential in 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, those that do both are — they’re really, they’re doubling down on the infrastructure piece as well, not only here in the U.S. because of the infrastructure bill, but globally as well. So, we’re seeing a lot of focus there. I think for those that have traditionally done 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 railway stations, for example airports, which are kind of — which are, in fact, classified as infrastructure projects. But that’s what we’re seeing in terms of pivot.
Tyler Radke
Yes. Okay, great. One of the things that we 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 adopting 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 that you expect to reap over the coming quarters and years?
Jim Lynch
Sure. Let me just clarify. What we did in Q1, what we did to start the year is we’ve moved the construction sales team over to the Autodesk worldwide sales team. This is something that 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, everybody looks at the PlanGrid acquisition and I think 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 ground-up approach, if you will. Because Autodesk has traditionally been really strong top-down, but I really like the PlanGrid approach of going to the job site, 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 is 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 account executives from the construction side that would be in construction companies, selling the construction portfolio, waking up every day only selling construction. At the same time, we had worldwide sales account executive selling the design portfolio.
So in many of these accounts, we had two account executives or even account team 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, 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, it drives more efficiency. That was one of the things we wanted to do.
The other is just, 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 increased that number heading towards 50. But ultimately, what we want to do is we want to 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. And we’ve worked through those and we’re heading back in the direction we wanted to head back in. So, that’s essentially what we did.
Tyler Radke
Yes. And not losing that bottoms-up approach then.
Jim Lynch
Not losing, no. That’s the other thing. We still have that, and 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, it’s not one or the other. It’s really that two-pronged approach, if you will, that I think is helping us to win.
Tyler Radke
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.
Jim Lynch
But I spent a lot of time there.
Tyler Radke
You know it. But as we think about Autodesk’s long-term targets, not to ask you a financial question, but 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 can come on to the platform, that’s great. But I guess on the design side, what are you kind of seeing on the unit growth? Obviously, you have noncompliant 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?
Jim Lynch
I’m going to let you start and I can fill in the blanks.
Simon Mays-Smith
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. Department 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’ve had realized opportunity there too. So, that’s one opportunity. 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 then also got new verticals within architects and engineers. So, when we talked about a few quarters ago is electrical engineers.
There’s about million electrical engineers globally, our penetration there is about 0. 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 6 million subscriptions in total, so 1 million incremental users in what you would assume was our most well-penetrated market is in itself quite a significant opportunity. So, still good opportunities for us to grow even in what you would assume was our most penetrated market.
Tyler Radke
Okay. And that’s 1 million in electrical and that okay which obviously are used in construction projects?
Jim Lynch
Correct. And I think the first point that you made, Simon, around BIM adoption continues to grow. It will continue to accelerate as we see more and more BIM mandates across the globe.
Tyler Radke
Yes. Yes, absolutely. I wanted to hit on the Generative AI topic, which I think for Autodesk, I think you’re using the word generative — well, before generative AI started, generative design, but specifically, I’m curious how you — and you have a conference coming up, I’m sure we’ll hear more. But how are you thinking about injecting generative AI capabilities, both in the construction cloud side, helping those workflows as well as the design side?
Jim Lynch
Yes. So, let me answer the construction, and then I know you all excited about the Gen AI thing, not thing, but Gen AI initiative. So, I think 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, 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 as 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 because they realize they’re sitting on this gold mine of information if they can figure out how to tap into it. And so, 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 Generative AI to drive more efficient workflows, smarter search, more insights, our customers are always saying, if you can just help us predict issues and prevent issues before they take place that’s worth gold to them. So, that’s what we’re doing. That’s where we’re going, specific to construction, and you’re going to hear a lot more about that. But let me hand it over to you because I know you like to clarify gen — our generative design where we started a couple of years ago on the manufacturing side to Gen AI.
Simon Mays-Smith
So I’ve been in the company three years, but a number of people who have come up to me and said, 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 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 credit side coming up with something new, there cannot be a problem with that, sometimes that can actually be built sort of from an engineering physics perspective, but that’s something that we need to address. But the key point is to get to Generative AI is 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, to sort of put it into really two buckets, one is around sort of the data itself. And so, Jim sort of begin to sort of touch on some of this, which is first of all, the vast majority of our customers data is locked in either digital or in many cases, a physical cover and is not amenable to AI 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 is 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 and from 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 that — 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 yes, we’re going to 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 with your customers and help them create value from their data, enabled by and powered by Autodesk because Andrew was talking about on our sort of Q2 call.
So it’s really that ethical component that is a sort of key area focus for us. So, that’s sort of one element to it. It’s 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 do on Autodesk’s 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 mentioned 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 to build once use many times to be able to do it 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 going to 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 and two years ago in our mass market version, which is Flex is having that consumption-based price 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 take time. We are well advanced in absolute terms, but also even more and even better advanced relative to our industry players in all of those areas.
Tyler Radke
Yes. And I guess, like as you think about the monetization of that, is it I think it sort of ties back to the release of these cloud data models that you highlighted at AU, but is it just acting more users of the platform? Is it more consumption-based pricing? How do you kind of think this gets monetized over time?
Simon Mays-Smith
It’s really around how we help our customers realize value from their data. In some ways, the data that we 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 industries and is precise in a — what is a very — and the reason we talk about multimodal models. We don’t care so much about the relationship between words as in relationship between objects, which is another order of complexity. And how a sort of piece of rebar relates to 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 about how objects interact with each other and having the — with our customers, the data to be able to make those relationships and establish those relationships is going to be enormously valuable.
Tyler Radke
Yes. Yes. Okay. So, going back to kind of the — one of the issues you mentioned that are impacting customers, Jim, is — we talked 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 is 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? Obviously, a lot of construction workers don’t go through the traditional college route, but maybe through trade industries, offering training to get kind of the next-generation of construction workers trained on Autodesk Construction Cloud.
Jim Lynch
Yes. 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 on to project sites, in particular are not going to — weren’t worth a college for project management. They’re coming out of a technical or vocational school. And so, we want to make sure that we continue to partner with the Unions. We can 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 we’ve been very active 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 want to make it available to them through the Unions, through the universities and through sites like the construction learning site, which is we continue to push content up there. But it’s a big task. It’s a really big task. And I think our customers are looking at very, very seriously. And thinking about how they can invest to bring more labor into the industry.
Tyler Radke
Okay, great. We got a few minutes left. Just wanted to see if there’s any questions in the audience. Yes, Scott?
Unidentified Analyst
Certainly a handful of questions. So, we’re talking about some of these initiatives, IRA pullback that are — and are you able to sense that tilt in your [indiscernible] or at this point do you expect to?
Simon Mays-Smith
So, the IRA is a cherry on a much larger cake, which is total construction infrastructure spend, is that there are billions and — even before the IRA, there’s billions and billions of dollars spent on infrastructure every year. So, even without the IRA, infrastructure is an awesome business to be in. But — and the infrastructure bill is just an incremental — 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 — well, if you want to get full chapter and verse on what I’m about to say, I’m just watching the clock nervously, is look at our Q4 opening commentary, Q4 of last year, ’23 opening commentary, where we talked about how the U.S. departments of transportation, 20 of them led by Highway 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 — connecting workflows in the cloud,” it’s like sort of Autodesk sponsored by Bingo. And that’s an environment in which we’ve been very successful [indiscernible] that type of construction market.
And there is a very small, with an unfeasibly long name which I can’t remember. It’s a 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 departments 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 that starts making the cake, and not just the cherry more accessible to us, acknowledging the fact it’ll take a long time for them to move their workflows, they could take a decade or more to do.
Tyler Radke
Yes, right. 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 your top three priorities to close out the year and head into the next one?
Jim Lynch
Yes, I mean I think our priority is about, from a product perspective, a couple of things. Continuing to build out and delivery the workflows that are most meaningful and impactful to our customers, it’s also about making sure that we’re — 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 want to make sure that we are building world-class services, right. So, making sure they scale, make sure they’re performing, 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 our global expansion, and now with the sales team — one sales team, I really think we’re ready to tap into the broader Autodesk channel network. Not everyone because they need to have and they need to show commitment and they need to have the skills to be able to service the customers. But 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 want to make sure when a customer buys our technology they immediately embrace it, and that we’re there to help them through any hiccups or [trip-ups] (ph) that they experience. So, it’s really about product. It’s about go-to-market. And it’s about customer experience.
Tyler Radke
Awesome. Jim, Simon, thanks for joining us.
Jim Lynch
You’re welcome.
Simon Mays-Smith
Thanks, everybody.
Jim Lynch
Thank you.
Tyler Radke
Thank you so much.
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