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Inside this Issue
How about them Canadians, eh? Gold medals in women's and men's Olympic hockey, beating out the USA in both. Way t'go!
- The Editor
If the government approves, Autodesk hopes to complete its US$133 million-purchase
of Revit Technology by the end of July. Government approval is not a given,
however, because the concentration of ownership. How do competitors Graphisoft
and Nemetschek feel about it? Graphisoft likes the purchase because it eliminates
a competitor; they think Revit will go the way of SoftDesk. I did not hear back
from Nemetschek. The share prices of Autodesk, Graphisoft, and Nemetschek all
jumped on the news.
The talks
began informally last fall, building up to last week's purchase announcement.
The acquisition was hinted at in an interview last month by Martyn Day: "In
my last meeting with Bernstein, he alluded to the fact that his team is already
mapping out the next generation of Single Building Modelers. Bernstein commented:
'It's hard to predict but we have always thought of ADT as a bridging mechanism,
in much the same way that MDT was a bridge to Inventor. It's a way of starting
to change the way people think about things but whether it's going to last three
years, five years, or ten years is something we are trying to figure out at
this very minute.'" <http://www.tenlinks.com/NEWS/ARTICLES/cadserver/adesk_reorg.htm>
At
$133 million, this is not Autodesk's largest purchase; the company paid a half-billion
for Discrete. Autodesk has plenty of cash in the bank, though, US$505 million
at last count. In addition to venture capitalists and private investors, Dassault
Systemes owns some of Revit. Purchasing Revit allows Autodesk to thumb its nose
at arch-competitor SolidWorks, who helped launch Revit and sits on its board
of directors. There is the possibility of a bidding war, perhaps from Dassault,
just as when PTC drove up the price tag for SoftDesk, and SDRC increased Dassault's
purchase price of Spatial.
This
is not the first time Autodesk has purchased a competitive CAD product. Others
include Generic CADD, IntelliCAD and Drafix (via SoftDesk), and Re:GIS and UltimateCAD
(from Automated Methods). Generic CADD was shut down; IntelliCAD was resold
to Visio by government dictate; Drafix was integrated with AutoSketch; Re:GIS
became World (now gone); and UltimateCAD was shut down.
In an interview I had with Autodesk vp of building industry Phil Bernstein,
he insisted that ADT (Architectural Desktop) will stay. "Our commitment
to ADT is unwavering," he proclaimed, pointing out that ADT has 238,000
customers. "I can say that," he added, perhaps highlighting that Autodesk
is _not_ saying how many customers Revit has.
In
upFront.eZine #266, I reported that Revit emphasized Autodesk is its target,
and Autodesk alone. "Problem is," I wrote, "Revit refuses to
provide any data to show whether they are getting close to overtaking AutoCAD/ADT,
or are even in the game."
During
last week's Autodesk conference call, Autodesk ceo Carol Bartz described Revit
sales as a "small pilot user base," what she would expect from a "start-up."
When I repeated the quotes to Revit ceo David Lemont, he sounded shaken, but
declared that his company had many happy customers.
An
industry insider estimates that Revit had revenues of US$4 million last year.
Dividing by an average subscription price indicates a user base of roughly 2,500.
I wonder if the pressure to sell came from venture capitalists, who so far have
sunk into Revit over US$43 million.
I asked Mr Lemont why Revit was selling itself. The answer: "To sell more
copies of Revit." An analyst asked Ms Bartz what Autodesk was getting for
the US$133-million purchase. Answer: increased sales, the technology, and a
staff of 100. Autodesk also probably likes Revit's subscription revenue model.
Layoffs? None are planned. Relocation of offices? Nope. There may
be, however, some Revit employees who find the change in corporate culture uncomfortable.
On
the customer side, I am concerned about confusion over Autodesk's long line
of AEC products, ranging from Architectural Studio to ProjectPoint (nee Buzzsaw).
When I asked about this, Mr Bernstein defend the range, saying that we can no
longer rely on a single application to solve all customer problems. I pointed
out that Revit was exactly attempting to do that.
During
their previous visit to upFront.eZinee, Alex Neihaus and Rick Rundell described
version 4 as expanding Revit from "just design" to being part of the
overall production process. They spent most of their time accentuated the point
that Revit is no longer just for the architect, but also for the structural
engineer, the landscape designer, and so on. An Autodesk press release agrees:
"With Revit ... building information becomes available for downstream functions
like structural engineering, construction estimating and bidding, and facilities
management."
Finally, there is the question of product forking. Despite the "miracle"
of ObjectARx, AutoCAD and DWG are increasingly no longer the glue that holds
together Autodesk products. Forking began in the late '80s with the purchase
of 3D Studio -- Autodesk's first post-AutoCAD product to remain independent
of AutoCAD. Other forks arrived with MCAD (Inventor), then GIS, and now AEC.
On the AEC side, product
forking is out of control, what with Architectural Studio, AutoCAD and LT, ADT,
VIZ, Revit, and ProjectPoint. It's the opposite situation from ten years ago,
when Autodesk supported (essentially) one CAD program on a half-dozen operating
systems: Windows, DOS, Unix variants, OS/2, and Mac. Now Autodesk faces the
reverse: supporting a half-dozen CAD programs on a single operating system.
Autodesk reported that its 4Q net income fell to US$21.8 million, down from
US$28.4 million in the same quarter the year before. Revenue was US$254 million
for the quarter, and US$947 million for the year, up from US$936 million a year
earlier. Special emphasis was made on Autodesk's clean accounting methods. FY03
growth was revised upward from 6% to 8-10%, resulting in hoped-for revenues
of $1.025-1.045 billion.
Listening
in on the earnings conference call, Autodesk ceo Carol Bartz made it sound as
if there will be no "aggregation" (major release) of AutoCAD this
year. Instead, Autodesk will ship "richer" extensions, and wants to
get more customers upgraded to AutoCAD 2002.
From
the verbal nods and winks, you can expect Inventor 6 this summer. No AutoCAD-like
extensions are planned for Inventor, because a new release comes out every nine
months anyhow.
It was discouraging
to hear Ms Bartz proclaim that Autodesk would be pushing "collbaoration"
as the means by which it plans to grow in fiscal year 2003. [That is so last-millennium!]
While CAD operators are looking for better ways to create drawings, Autodesk
is looking to make it easier to share drawings. "In today's macro-economic
climate the need to collaborate, share information, and successfully manage
digital design data internally and externally has never been more important,"
says an Autodesk press release.
While still refusing to state the total number of Inventor seats, Autodesk said it made 12,500 new commerical Inventor sales in Q4. One financial analyst assumed total sales of around 30,000 -- a figure similar to that calculated earlier by upFront.eZine. An industry insider thinks that Autodesk is waiting for 50,000 seats before announcing the number. Other numbers:
Direct sales now account for 20% of revenues in North America. The aim is
to increase this to 40%. Worldwide, the number of dealers has decreased over
the years from 2,500 to 1,300.
Some
13% of customers in the Americas (North, South, and Central) are on the subscription
program. Retailers receive a 30% commission on sales of subscriptions to their
customers.
Autodesk said ProjectPoint (nee Buzzsaw) revenues had doubled. Although
ProjectPoint currently has 30,000 customers, Ms Bartz has ordered that the list
be scrubbed of small projects (approximately 10,000), inherited from the days
when Buzzsaw was offering its service free.
Over
at Streamline, Autodesk is trying to convert pilot projects to paid services.
One customer said Streamline save them 20% (a day a week). A big project at
Autodesk is to rebuild ProjectPoint and Streamline on the same code base.
Autodesk was asked whether they were worried by PTC new MCAD pacakges, one free and the other under-$1000. Ms Bartz replied, "I don't think free is going to work for them." When pressed on the issue, she didn't think customers want under-$1000 software [I happen to agree], but then contradicted herself when she described how vendors selling $5,000-MCAD managed to undercut sales of PTC's Pro/E, which sold in the mid-teens (between $10,000 and $20,000) at the time.
In addition to Revit, Autodesk may make additional aquisistions this year.
PlanetCAD is a company with a bright beginning, followed by an unhappy
history. It got wacked by: (1) the sudden unpopularity of ASPs, Web-based services;
(2) a too-high burn rate of over a million dollars a month; (3) marketing niche
software products that were difficult to understand and more difficult to sell;
and (4) the slowdown in the economy that put big purchases on hold.
The
company started strong with the US$25 million it made selling Spatial to Dassault
Systemes, but rapidly spent the cash without making much in sales. In its 3Q,
PlanetCAD had a US$3.9 million-loss on US$557,000 revenue; 4Q results have not
yet been announced. Last year, it cut its staff from 60 to 29. PlanetCAD shares,
which had been as low as 10 cents, jumped to 22 cents on the latest takeover
news.
Eric Weissman is the
president of PCD Investments, a company looking to take over PlanetCAD for US$3.7
million. This may be the first hostile takeover in the CAD world. I interviewed
him last Friday:
upFront.eZine: What background do you have in CAD?
Mr Weissman:
My partner and I have substantial ownership in a software company that sells
supply-chain software. That's relevant because with both SCS/Envoy and the Castalink
acquisition, PlanetCAD is moving toward the supply chain space.
upFront.eZine: What got you interested in PlanetCAD, then?
Mr Weissman:
I look for companies that are undervalued and have a lot of potential value.
If PlanetCAD continues on its current path, it will run out of cash. I and my
partner, Gary Jacobs, looked at over 100 small companies before picking PlanetCAD
last October.
We have long
experience in working with management teams with more specific knowledge; that's
how investors can focus on a broader area (we focus on IT with an emphasis on
software) and not be limited to a more narrow area.
upFront.eZine: And you have a spare US$3.7 million laying around to make
this purchase?
Mr. Weissman: Oh, yes. That's not a problem. We are making three offers for shares:
upFront.eZine: Your press release makes mention of SCS|Envoy but not PrescientQA.
Do you plan to drop the second product?
Mr. Weissman: No, we plan to
sell both products. SCS]Envoy was mentioned only because it was not yet launched.
We intend to continue its launch.
upFront.eZine: The press release also metnions 'overcoming the distribution
obstacles.' What does that mean?
Mr. Weissman: PlanetCAD is a small company
that isn't able to sell its products very well. I intend to make distribution
agreements to give their products a better chance. Part of my tactic is to take
PlanetCAD private. The problem is that its competitors are private, so they
don't need to reveal their sales. PlanetCAD is public, so their sales are public
knowledge. Their competitors are able to use that information to PlanetCAD's
disadvantage.
On Saturday March 2, 2002, from 12 noon - 2 pm at the Boston Society of Architects, Jonathan Foster, AIA Jensen Vasil of New York will give a special presentation on their winning design using DataCAD at 5th floor, 50 Milk St, Boston MA USA. More info from glangdon@architecturalcadd.com
Stratasys is shipping its Dimension (US$29,900) 3D printer that makes models from ABS plastic, a plastic that allows designers to test for fit and function. The price does not include installation, modeling material, and shipping. http://www.dimensionprinting.com
People/Companies on the Move
Rachael Dalton-Taggart <rachael.taggart@strategicreachpr.com>
has left PlantCAD to open her own pr firm. More details at http://www.strategicreachpr.com
Former IntelliCAD product manager Rolf Gibbels <rolf_gibbels@ds-us.com> is now business development executive with the Plant/AEC group at Dassault Systemes.
'Computer Graphics World,' sometimes known as CGW, is celebrating its 25th anniversary. http://www.cgw.com
'Construction Business Computing' is changing its format from a monthly printed newsletter to something different. Editor Joe Stoddard's special edition says its changing, but I couldn't quite figure out how. Something along the lines of publishing when the news occurs, instead of monthly. http://www.cbczine.com
CLB Media has closed down 'CAD SYSTEMS,' a Canadian tabloid-style bi-monthly CAD magazine. CLB had just months earlier purchased the magazine from Kerrwil Publications.
Computer News Summaries
A secret lawsuit seeking a warrant for surprise search at the offices of URL redirector kickme.to was filed on behalf of BSA member companies Autodesk, Adobe, Macromedia and Microsoft. The Swedish court was unimpressed by BSA's arguments and denied the request. - The Register
Australian companies are shying away from using the Internet for business amid growing doubts about its security and reliability. - Dun & Bradstreet
The new blue-laser DVD format allows up to 27GB on one side, up from the current DVD standard of 4.7GB discs. Matsushita is developing a dual-layer technology (using semitransparent materials) to store 50GB on one side of a disc.- CNET
StarOffice 6, currently in beta, is due to ship in March.
Sony's 6.15 million pixel CCD image sensor lets consumer digital cameras create 3040x2024- pixel images. In raw mode, each picture would take up 17MB.
The WorthWhile Web
http://prodigi.bl.uk/gutenbg/default.asp
The
Gutenberg Bible
Scanned in at high resolution (1MB JPEGs).
http://www.b-may.com/
b-may
The
Web log of a security guy at the Olympics.
http://eol.jsc.nasa.gov/sseop/clickmap/
NASA
Astronaut Photography of Earth: Clickable Map Search
Access to all photographs
since 1961, listed within 2.5x2.5 degree blocks
http://www.msss.com/mars_images/moc/moc_atlas/indexfull.jpg
Mars
Orbiter Camera Global Mosaic
Hi-res map of Mars.
http://www.usdoj.gov/atr/cases/ms-major.htm
US
Department of Justice
Comments on the United States v. Microsoft Settlement
Spin Doctor of the Moment
"A panel of senior executives from leading global manufacturing enterprises will share their vision and strategy for compressing time to market by streamlining and re-engineering their product creation process so as to better leverage, manage and reuse engineering and corporate data and knowledge, collaborate more closely and efficiently with suppliers and partners, integrate and coordinate CAD, PDM and PLM with enterprise systems and supply-chain partners, and exploit virtual prototyping and simulation to reduce or eliminate physical prototyping."
- Description of Annual User Forum & Dinner at this year's Daratech conference
"The fate of the Olympics and corporate capitalism are now in the hands of America's most influential intellectual power group: gag writers."
- Terrence Corcoran
The
National Post
