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#358
15 OCtober 2003
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a l k i n g a b o u t c a d
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issue
#358
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Contents EDS
to Selloff Part of PLM Solutions and
Below the Radar - - - Donate Write - - -
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EDS To Selloff Part of PLM Solutions EDS plans to sell a minority (less than 50%) portion of PLM Solutions, its CAD division that develops and markets NX, Solid Edge, and other software related to CAD. The sale is expected to be completed in the first half of 2004 as an private offering or as an IPO (initial public offering). The move is part of new ceo Michael Jordan's plan for turning around the financially-troubled services corporation -- the plan is sharpening EDS's focus on its core business of being "the premier global outsourcing services company." The sale is a means for EDS to generate cash, along with the possibility of selling off the division in its entirety -- the return to independence is hinted at by PLM Solutions president Tony Affuso statement: "We expect this alternative would enable PLM Solutions to be more agile in the market, make decisions more quickly, and more effectively leverage our roots as an independent software company on behalf of our customers." Because EDS needs cash, I am guessing they will sell 49% of PLM. Another possibility is to sell 25% now, and hope the price raises before selling the other 24%. PLM Solutions has 41,000 customers, and in 2002 generated revenues of US$879 million, representing 4% of EDS's total revenue. The selling price of companies typically ranges between 1x and 3x annual revenues. - - - Comment: I am not surprised at the announcement from EDS, because its ownership of Unigraphics (relabeled as 'PLM Solutions') never made sense to me. The financial problems of EDS made the partial spin-off inevitable. The sole link between the EDS and PLM is services: EDS sells computer services, and CAD software sales have the possibility of generating after-sales services. Who could be the buyer(s)? Management buy-outs are popular these days, meaning the management of PLM Solutions would buy their own company. IMSI is on a buying spree, but doesn't the cash for something this big (perhaps U$430 million or more). I doubt that competitors Dassault, Autodesk, or PTC would be interested in partial ownership, but do expect some to send out FUD-sprinkled press releases in the coming months. - - - In related news, EDS PLM Solutions announces that its PLM product, Teamcenter, has one million users, and claims it is the first PLM product to reach that size. Moral Hazards of PLM by Menno Huijben PLM projects are not very different from any other IT/business improvement project. However, the combined challenges of improving product data quality, introducing a new information system, and streamlining business processes in a global environment make them, perhaps, more prone to risks. There are many risks that can lurk within a PLM project. There is the primary risk of not delivering the projected business benefits. Furthermore, there are all the day-to-day risks of:
Good project management includes risk management. This means that the project has, as a minimum, a checklist of things that might go wrong, and a risk-mitigation plan: What will we do if something does go wrong? This checklist needs to be regularly updated and reviewed. PLM projects are not simple, they require courage and that means risk taking. Courage to sell the PLM vision to senior management, courage to spend the money, and courage to defend the project when some of the risks are realized. In economics, the term 'moral hazard' is used to describe the situation where people can take risks, but do not need to bear the consequences when the risk is realized. For example, in the insurance industry, where coverage against a loss might increase the risk-taking behavior of the insured. Moral hazard can occur in PLM projects. When risks are realized, (e.g., the project is delayed), there are plenty of ways out. You can blame:
Moral hazard may be encouraged by over-optimism during the sales and startup phase of a PLM project. Expectations are raised high to collect the courage to make the investment and start the project. Tough time schedules are demanded and fast payback promised. Beware of moral hazard when the people planning, buying and selling the PLM project are not involved and committed to the implementation and rollout phases of the project. Imagine the following: A project manager has not been involved in the sales and startup phase of a project laden with high expectations. A large problem, a 'show-stopper', is identified. The project manager now has to remove the 'show-stopper', but has an additional problem. The project manager needs to put extra energy into defending the reputation of the project, as unfulfilled high expectations cause a large amount of disappointment. To avoid moral hazard situations, take these steps:
Keep 'moral hazard' out of your project, conduct good project management with risk assessments and mitigation plans, and you will have a good chance of succeeding with PLM. - - - Menno Huijben is a consultant at Technia <http://www.technia.com/>, a supplier of PLM solutions in the Nordic countries. He has 13 years experience of using, consulting, developing, managing, and providing PDM/PLM solutions. Reprinted by permission from John Stark Associates' '2PLM' e-newsletter. Updates CADKEY Purchase A reader alerted me that IMSI might be responsible for a final "balloon" payment by CADKEY to its original founders. IMSI confirms: "The originals owners, from whom Baystate Technologies [now named CADKEY] bought the company from was never fully paid off. They are the only secured creditor in the bankruptcy proceedings, so they will be paid off before anyone else. "If our bid to acquire CADKEY is accepted, the majority of that bid will go to pay off this creditor. (I believe they are officially known as MCS.) A small part of that bid would go to pay off people with unsecured claims, including the people with the judgement against CADKEY for copyright infringement." - - - DTI Technology A reader asks, "So what's the scoop on DTI (www.dtitech.com). We've used for a long time their excellent free add-on utility for AutoCAD and ADT. But now it seems they are ending their business relationship with AutoCAD. The announcement on their Web page just leaves one wanting more information." Another reader responds, "Depressing sign of the economy: DTI after 18 years in business (the largest in New England) has ceased operations as an Autodesk reseller. The estimated five people left are concentrating on a FM [facilities management] add-on to AutoCAD under a different company name." Below the Radar A summary of CAD industry news you may not have read elsewhere, or that I find interesting: CoCreate Software releases OneSpace Designer 2004 with 250 customer requested enhancements. The software is for creating, changing, and managing designs using 2D drawing, 3D modeling, and data management. Joe Greco gives it his thumbs-up: "...one of the smoothest, slickest interfaces available in MCAD software today." Download the 30-day trial at www.cocreate.com/products Haestad Methods will be announcing GISConnect (US$495) next week. It's an add-on to AutoCAD and to ESRI's GIS products that ties both together -- "the data management power of ArcGIS and the drawing capabilities of AutoCAD," says Scott Devoe of Haestad. Read more at www.haestad.com/software/gisconnect/ GibbsCAM 2004 features hole grouping, native support for more MCAD systems, 2.5 solids option, and Windows UI. www.GibbsCAM.com General CADD Pro is shipping version 2.1 (US$499). Free download from www.generalcadd.com/downloads.htm Intergraph reports that 4.0 of its SmartPlant P&ID software will be available by year's end. ppo.intergraph.com/smartplant RealCADD v3.5 is shareware for Mac OS9 and OS X users. Download from ftp://ftp.adx-online.com/RealCADD3.50/english/MacOS/RealCADD.sit Autodesk says all its CAD products will have the same core rendering technology based on a future release of VIZ by sometime in the first half of 2004. MultiCIM Technologies releases PRO Menu for AutoCAD 2004 and AutoCAD LT 2004. "Features most liked by users continue to be the one-click, transparent restore of saved views, quick switching of displayed toolbars, and the background grid of guidelines," reports product manager Tim Skene. Trial download from www.multicim.com/pmenu.html And AutoSolids is updated for AutoCAD 2004 (US$495). The add-on extends the solid modeling, viewing, and visualization of AutoCAD-based products. Demo version from www.autosolids.com
Redo IMSI corrects a number I quoted last week: "The purchase of Cadalog.com gives IMSI approximately 100,000 opt-in CAD names." - - - Also, a clarification regarding the Dassault-Ghery press conference:
"The press conference was via telecon, but also live at
the CATIA User Conference in Seattle, where press and analysts attended
in person, including Cyon Research, which asked numerous questions.
So they were not part of the announcement."
Computer News Summaries According to one count, HP has now announced 20,000 layoffs since its acquisition of Compaq. IBM has cut 15,000 this year, and Gateway nearly 4,000. Here at upFront.eZine, we pledge to not lay off a single employee. A lawsuit filed in Los Angeles against software monopolist Microsoft attempts to hold the company responsible for the damage wrought by the systemic failures of security in its software, and for its conspicuous failure to fix them adequately. A new projector (PowerLite 9300i) from Epson boasts 1400x1050 resolution, 2500 ANSI lumens brightness, 1100:1 contrast ratio, and network interface (US$11,299).
Market News K Bank provides US$2 million worth of credit to Avatech Solutions Subsidiary, the operating subsidiary of Avatech Solutions. The upFront.eZine stock index is at /www.cadwire.net/to?upfrontezine/stocks
Letters to the Editor Re: Autodesk Extensions "The lack of extensions only shows that the subscription
programs are a complete bluff. AutoCAD 2004 already has been out
six months. IMHO, A2000 was the last great innovative version and
as this version will be discontinued at the end of the year, an
important percentage will keep using it. - - - Re: Printed Manuals "With the price of we pay for software (any software) you
would think it is the LEAST they could do is print some darn manuals." The editor replies: "I prefer paper-based magazines
and books, but I find I never use the printed documentation of any
software product anymore. Alt+Tab works fine for me. "I don't know how you are set up, but Alt+Tab doesn't work
in my bathroom." The editor replies: "I don't read computer documentation in my bathroom. That thrill is over." "I'm talking about appropriate use of time and location
for the information you are gathering. <g>" - - - Re: DesignCAD "I was smiling by seeing that AutoCAD was asking to the
users if they were interested by commands that we already find in
low-cost product, such as DesignCAD (e.g: password on layers). Did
you know that AutoCAD did Boolean operations one year later than
DesignCAD?. That DesignCAD supports 16 million colors since a long
time, that with DesignCAD you can easily manipulate any objects
with one, two but also with four references (useful in cartography
to adjust a vector plan on a bitmap map). "With DesignCAD you can easily create objects directly in the 3D view eversince the first 3D version), but of course you can also crate 3D objects from 2D views. "In summary, I think that DesignCAD is a bargain in
comparison with AutoCAD, not only for the price (this not the only
consideration for professional users), but also for the ease of
use. I think that for a lot of users, AutoCAD is not necessary.
Of course for some users, I understand this choice (eventually combined
with a third-party application)." - - - "Keep up the great work. I enjoy catching up now and again
with an industry I really enjoyed working in."
Spin Doctor of the Moment "Leading Industry Analyst Report Validates PTC PLM Leadership
in Architecture and Capabilities" "EDS PLM Solutions Recognized as the Leader By Industry
Research Firm in PLM Vendor Comparison"
Notable Quotable "It's not only a story easy to report... but also one that
few journalists would refute, for fear of violating the law of the
pack." |
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Return to www.upfrontezine.com. Entire contents copyright ©2003 by upFront.eZine Publishing, Ltd. All rights reserved worldwide. Article reprint fee $500. All trademarks belong to their respective holders. "upFront.eZine," "Talking About CAD," and "On your desktop every Tuesday morning" are trademarks of upFront.eZinePublishing, Ltd. Letters to the editor may be reproduced in an edited form for clarity and brevity. Opinions expressed in letters are not necessarily shared by upFront.eZine Publishing, Ltd. |
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