In a move that some industry insiders say would be akin to Microsoft taking over Apple, U.S. software giant Autodesk is acquiring Alias, creator of Maya, the Oscar-winning 3D FX and animation application that has been used in nearly every feature film nominated for best special effects Academy Awards since its release in 1998.

The Toronto-based Alias had been operating independently for the past year after parent company Silicon Graphics sold it for US$57.5 million to private equity investment firm Accel-KKR and partner Teachers’ Private Capital, the private investment arm of the Ontario Teachers’ Pension Plan. Alias reported US$83 million in revenues in fiscal 2005, with recent summer blockbusters that used Maya including Star Wars: Episode III – Revenge of the Sith, Fantastic Four and Charlie and the Chocolate Factory.

Autodesk, out of San Rafael, CA, is the world’s fifth-largest PC software company, with annual sales of more than US$1.2 billion. The last 10 FX Oscar winners have used Autodesk’s Discreet systems, which include 3ds Max, Lustre and Fire. Autodesk Media and Entertainment Solutions, the rebranded Discreet division, is headquartered in Montreal.

The company picked up Alias for US$182 million, and the companies will operate separately until the deal is ratified, which will happen in four to six months, according to both sides.

Alias’ Toronto office will remain as a ‘center of excellence’ within Autodesk’s family of nearly 20 such R&D centers worldwide, but in addition to eventual brand integration under the Autodesk banner, there will be the inevitable paring down of staff due to redundancies. This will include the departure of Alias CEO Doug Walker, who was on hand to accept Alias’ Oscar for scientific and technical achievement for the development of Maya in 2003.

‘Autodesk will continue to invest in key Alias product brands,’ assures David Wharry, Alias’ VP global sales and marketing. ‘A product like Maya, for example, is certainly very strong in the market, and will likely continue as Autodesk Maya or something of that nature. At the same time, products like StudioTools have a huge amount of equity in the conceptual design marketplace.’

In fact, since the StudioTools package is widely used in the automotive industry as a pipeline from sketch to finished model, it gives Autodesk a valuable link between computer-aided design and industrial design. Autodesk also makes the design application AutoCAD, which is the industry standard.

‘There’s a groundswell of interest in the CAD industry to enable the reuse of models for entertainment, technical illustration, interactive training and repair, assembly, and web applications,’ observes Kathleen Maher, senior analyst at Jon Peddie Research. ‘However, there are chasms between the CAD, industrial design and entertainment applications. No company expects to solve these issues quickly, but with this acquisition, Autodesk has control of major applications for all three areas of specialization for 3D modeling.’

Uppermost on many industry insiders’ minds, however, is what will happen to Maya, given that Autodesk has 3ds Max, its own rival 3D animation and FX app, and that Maya itself is the result of three 3D software lines that converged after SGI bought Alias in 1995. Maher estimates the 3D modeling and animation market will reach approximately US$270 million in 2005, with the pie previously divided among three dominant marketplace players: Alias (33%), Autodesk (22%) and Avid/Softimage (15%).

‘We haven’t gotten that far down the road in terms of understanding how the brands will play out,’ admits David Feder, Autodesk’s senior director of media and entertainment. One forecast has Autodesk pushing 3ds Max in the gaming market, while maintaining Maya’s dominance in the high-end film industry, thereby dealing efficiently with Maya’s recent incursion of Max’s games territory, while exploiting Maya’s brand legacy.

Alias’ Wharry believes Autodesk will give Alias products the scale they need to penetrate new markets, as well as the R&D budget (one estimate puts that at US$300 million) to keep pace with 3D rivals such as Softimage, which, in addition to addressing the increasing complexity of what Feder terms ‘datacentric production,’ are pushing towards one of the holy grails of 3D – creating the ‘synthespian,’ a credible CG actor.

‘Doing complex character animation is still very much a technical task just as much as an artistic task,’ notes Marc Stevens, director of product marketing and research and development for Montreal’s Softimage, which recently launched version 5.0 of XSI, its flagship 3D software, at the Siggraph industry confab. ‘As an industry, that’s our challenge – to move more to the side, where people can focus on the art and less on the technical details.’

As for the newly expanded Autodesk, Wharry sees plenty of opportunity.

‘The whole area of 3D is exploding right now,’ he says. ‘The games market is exploding. The visual content creation market – web, print and publishing – and the whole area of conceptual design are growing exponentially. There’s a new era of people interested in design and streamlining the workflow from design through manufacturing. These are all growth areas that are complementary between Autodesk and Alias.’

www.autodesk.com

www.alias.com

www.softimage.com