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Issue #450 : : November 8, 2005 |
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C o n t e n t s Revenues Up, Profits Down: The
FAS-123 Effect High-end Players
Eye SMBs, Part II Downloads.com: The Top 10 Most Popular CAD DownloadsI Below
the Radar, and other
regular columns. |
Write the Editor. Donate to upFront.eZine with Paypal. Access nearly-daily CAD commentary at our blog: WorldCAD Access. |
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Revenues
Up, Profits Down: Corporations based in the United States have to start recognizing the cost of offering employees share options. Previously, corporations would leave out the cost of the awarded shares, artificially boosting profits. The effects of Financial Accounting Standards No. 123R, Share-Based Payment (FAS-123) are now being felt, as CAD companies begin to report higher revenues with lower profits.
PTC For PTC's Q4, revenues were up 15% over a year ago, to US$195.1 million, but GAAP net income fell to $17.3 million, down from $42.0 million a year earlier. Blame it on FAS-123. In the Q&A that followed, an analyst wondered if PLM spending was beginning to slow down, based on numbers released by Dassault. "We're stealing their customers," came the quick response from PTC. PTC is excited about Arbortext's technical publishing allows the CAD company to step into pharmacy and other non-CAD markets. "Looks like Microsoft Word, works like Pro/E." He gave the example of Toyota being able to update its technical manuals in hours around the world, instead of weeks.
A financial review continues of the Asia-Pacific division. PTC is not happy with the findings of the review, but feels the financial problems will not impact on the corporation's overall results. No further details were provided.
Moldflow Same story at Moldflow, where Q1 revenues were up by 9% to US$15.3 million, but net income plunging from $1.7 million (a year ago) to $30,000 this quarter.
ANSYS ANSYS has not yet implemented FAS-123, and so Q3 net income jumped 47% from $7.6 million to $11.2 million. Total revenue was US$39.0 million, up 20% from $32.3 million a year ago. An analyst wanted to know if Dassault's take-over of Abacus is affecting ANSYS. Response: "We're in 95% of the Fortune 100, so there's going to be overlap. It's just too early to tell, so no immediate impact."
RAND Worldwide And there there is RAND, recovering from huge losses over the last several years, it finally turned a profit in Q3 of $11,000 -- meager enough to be rated as $0.00 per share, but a huge improvement over its loss of $7.9 million a year earlier. The turnaround comes as a result of selling five European offices to Dassault Systems and closing four others that were unprofitable. RAND Worldwide is now a little less worldwide. Q3 revenue was $23.8 million, up 8% over the year before. Its Autodesk-oriented IMAGINiT division brings in the bulk of the revenue, nearly 70%. The company plans to make more acquisitions with the $15 million it has in the bank. High-end Players Eye SMBs, Part II by Martyn Day As part of the change, it looks as though UGS will allow its reseller channel to sell NX, it’s high-end product which was only available directly from UGS’s sales force, or from very specialized partners. This indicates that UGS thinks broader availability of NX is also desirable and should also be more accessible to mid-size companies. Meanwhile, Dassault’s intentions to control its own route to market look set to become reality across Europe. Previously, Dassault was the software developer and IBM was its marketing and sales partner. This arrangement appeared to work well but now with the entire market focusing on SMBs Dassault has taken control of IBM’s European reseller channel (independent CATIA dealers), with IBM performing major account management and handling the credit risk. The channel is further complicated with Dassault actually owning one of the resellers, TransCAT, which was born out of its investment of Rand, a Canadian-based global CAD reseller, although Dassault states that TransCAT will not get any special favors. Dassault now plans to resell a bundled version of CATIA (the basic CATIA P1) together with SmarTeam (PDM) for around £7,000 - £8,000. It’s a new price point, with bundled tools. The relationship between Dassault and IBM is an interesting topic in itself. In China Dassault and IBM have totally dissolved their partnership, with Dassault going totally direct. In Europe we have Dassault taking control of the indirect channel and IBM being left catering to big accounts, although all CATIA reseller orders are still processed through IBM. Dassault and IBM describe their partnership as ‘evolving’, and indeed their relationship is a drastically different beast from last year but here, one has to remember, that some evolution leads to extinction. IBM made slow work getting into the SMB market with PLM Express, Dassault thinks it can do better but has little channel experience, is operating in a tough replacement market and has yet to really productize its offering in the UK. From many angles, it’s a major undertaking.
Conclusion So, all of a sudden, every man and his dog is after SMB customers. UGS has taken its mid-range modeling tool, improved it, and developed a cut-down version of its high-end PDM (PLM) collaboration tool to sell alongside. Dassault now has its own channel and is bundling existing products together at a new price point hoping to do the same, especially along the supply channel, following any demands of file format compliance. This leaves Autodesk pushing its increasingly powerful Inventor modeler with embryonic document management and SolidWorks, with its many partners who, as all would admit, have shown everyone how selling to the mid-range is done, the fact that Dassault owns SolidWorks also adds a little confusion to the mix. You have to ask, with so many companies now targeting the same people, is it really a viable place to see a large amount of growth? On analysis there is little to no growth at the high-end, the market appears saturated– there just aren’t that many new aerospace or automotive companies to sell to. It seems to me that the easiest place new customers can be found is at a lower price point, through a less direct channel. It is true, that these high-end products, especially Dassault’s Catia bundle may appeal to users who want more than is capable from their existing applications but there are training, recruitment and cost of ownership issues, which SMBs typically consider and steer clear of. For me, UGS and the Velocity portfolio, at the moment appears the more coherent product approach to the SMB market as defined, a low-cost modeler with easy to deploy PDM. Unfortunately, UGS seems the most challenged in the fulfilment department, as it has to considerably beef up its channel and learn how to market to SMBs. While SolidEdge is a great and innovative modeler it has failed to seriously bother Autodesk or SolidWorks. Talking of which, Autodesk and SolidWorks will continue to battle it out but will have to protect their high-end customers from eloping to these exotic new bundles, while I think PTC, which is showing signs of resurgence with Pro/Engineer WildFire, may come out a winner in this, as it’s portfolio of products has scaled from mid-range to high-end for a number of years now and has both direct and indirect routes to market. The great news for all engineering firms out there is that you are going to be able to get more bang for your buck and strike a better deal for your tools as competition for your business is certainly going to be increasing over the next year.
(Martyn Day is group editor for 'MCAD', 'AEC', 'Prototype', and 'Workstation' magazines at EDA. www.cadserver.co.uk ) - - - Reader Response by Dave Stein Quote: 'Based on this research, UGS estimates its mid-market opportunity (companies with revenues below $750M) will grow from $3.8 billion in 2004 to $6.4 billion in 2009.' If you back up a step and look at our economic indicators, the US Fed, the market analysts, etc, there's nothing to indicate any basis for this estimate. The economic situation is tough to assess at present, let alone some crack-smoking marketing hype like this. I deal with this SMB [small and medium size business] market extensively and nobody I know sees anything like this emerging in the next year, not even two years. PLM [product lifecycle management] remains elusive to SMBs due to the nature of how they (SMB entities) fit into the chain of their industry. Most SMB's do not manage an entire product from inception to delivery. They barely control one phase of it along the way. I'm sure PLM vendors would love to see all suppliers, manufacturers, wholesalers, designers, shippers, logisticians, procurers, construction teams, surveyors, etc. all use the same PLM system to share this Utopian vision of free-flowing data. But politics, competition, vertical markets, regional and local laws, cultural differences, etc. make that near-impossible. For environments where PLM works, great. I love to hear that it can work. For the rest of us, it's something we read about.
A summary of CAD industry news you may not have read elsewhere, or that I found interesting:
Version 2.5 of HatchKit hatch pattern editor adds grid and snap, expanded DXF import, and additional hatch pattern file formats. It works with Revit, AutoCAD and LT, IntelliCAD, MegaCAD, MicroStation, SolidWorks, DataCAD, DesignCAD, TurboCAD, General CADD Pro, VersaCAD, and VisualCAD. www.cadro.com.au/hatchkit Bentley Systems releases Building Electrical Systems, software for electrical system design and engineering, documentation, and management. www.bentley.com/electrical UGS has Teamcenter running with Microsoft's SQL Server 2005. www.ugs.com Lattice3D receives certification from Autodesk that their XVL Converter works with Inventor Series 10. www.lattice3D.com Autodesk says it's supporting Microsoft's Visual Studio 2005, .NET Framework 2.0 and Microsoft SQL Server 2005.Autodesk plans to use VS05 for programming AutoCAD, Inventor, and other software. That's too bad, because word is that VS05 too buggy to be released this soon. minimsft.blogspot.com/2005/11/hey-shareholders-vs-2005-is-fantastic.html - - - These news items were posted during the last week at the WorldCAD Access blog <worldcadaccess.typepad.com>:
Seminars & Conferences Construction Computing is Nov 9-10 at The Barbican in London, England. www.constructioncomputing.co.uk Autodesk University 2005 is Nov 28-Dec 1 in Orlando FL USA. (I'll be there on Nov 29-30.) www.autodesk.com/au SofTech and John Stark Associates: Web seminar series on Product Lifecycle Management. Starts November 29. Register at www.softech.com/webseries
Magazine/eZine/Weblog Updates Architosh launches a new monthly CAD-Macintosh 'ToshLetter' free to subscribers. www.architosh.com/news/2005-11/2005a1104_toshletterships.html
WorthWhile Web www.jottings.com/100-oldest-dot-com-domains.htm
www.pcworld.com/news/article/0%2Caid%2C123442%2Ctk%2Cdn110705X%2C00.asp
Letters to the Editor Re: upFront.eZine Covers Other Than The Top 5 CAD Vendors "I heartily agree! In spite of the curious notion in our world that people always have enough money to buy what they really want, both individually and corporately, we all have budgets we just can't exceed. That's why many companies stay a few revs behind in their software or skip revs. "Low cost Tom, Dick & Harry software is a great thing,
especially for those who are just starting out. If you don't know
enough about software you can't easily commit big bucks to it. It's
basically a conceit to assume lower-priced or unknown software is
junk. What you find for less than a thousand dollars today has more
capability than what cost twenty times that a few years ago. And
It's only going to get better! I applaud your newsletter for covering
it all."
"JW obviously is awfully short minded. I, myself don't have a particular specific interest in a great deal of what you write, but just like reading the newspaper every morning, I look for that one story that both interests me and enlightens me. "I find this forum one of the few that provides a little
of everything. If it was focused on one particular software or issue,
I might not subscribe nor be interested. I thank you. Keep up the
marvelous job you do."
"Don't agree with JW. Keep up the good work and I look forward
to you returning to New Zealand."
"How is one supposed to choose the top five CA programs?
"I wonder, out of curiousity, which top five he would choose. AutoCAD R12, the callouts in Word, the year 2000 bug, a copy of Architectural
Desktop 1.0 which he was able to download from Kazzaa, or just the
script he wrote for zooming to extents? "Every mainstream software was at one time an anonymous
upstart."
"Once upon a time, Autodesk was a Tom-Dick-and-Harry. It challenged the status quo and was instrumental in creating a whole new industry. Now it represents the new othordoxy: corporate America personified, imposing a US structure and culture on its operations around the world. We are all Americans now. And who would have guessed from Autodesk's current and aggressive anti-piracy stance that it was in fact the easy avaiablility of AutoCAD in the early days that helped to create the very foundation of its business. "Two things to think about:
Re: Getting off the A Train "It is hard to get off this train. I have found IntelliCAD
is a good choice, BUT I still keep a current copy of AutoCAD LT
to check and occasionally fix a few issues."
"Side question: I thought AutoCAD 2000 was dropped earlier this year (January 15th) and he is almost a year late in the need for migration? "From the sounds of the work that he does, he does not utilize or need the 3D aspects of full-blown AutoCAD, and should consider AutoCAD LT as a possible new software of choice. We use it for our production staff (along with DataCAD) to generate our architectural documents. "I started using LT about six years ago, and don't miss a thing for the 2D work we primarily do. With some simple add-ons, like LT Toolkit from drcauto.com, you have pretty much a fully functional version of AutoCAD with LISP, for a fraction of the cost of AutoCAD. The new functions / tools within AutoCAD LT 2006 make it worth the upgrade from 2000. "If he wants, needs, or expects the 3D functions, he should
be using AutoCAD, ADT, or an equivalent with those functions."
Re: XML for CAD "Amid the fanfare about XML I wonder when and if it will find its way into CAD systems enabling interoperability that had been denied us so far. From this page http://madpenguin.org/cms/html/62/5304.html : "'Boeing is a great case in point. Doug Alberg had to make sense of so many different CAD systems, drawing systems, report systems and federally-mandated filing systems, there was no other way of dealing with the problem other than to come up with a common XML transformation layer. "'Many of these different information systems were long ago orphaned or outright abandoned by their vendors. Even though they're no longer supported, they're still on line, doing exactly what they were designed to do. Much of the world is like this, especially in governments. That legacy data needs to be brought into the information flow, where
it's available to global Open Internet systems. XML can do that,
and do it easily."
Re: International Foot "That the USA is the only user of the International Foot
is not the only irony, the USA is also the only user of English
units. And isn't the World Series only open to North American teams?" The editor replies: "Canada uses a mixture of metric and imperial: litres for liquids and distances, imperial for construction and office, and both in grocery stores."
Re: Top Ten CAD Downloads "Note that Alibre Xpress had almost 3,000 downloads last
week and over 24,000 downloads in total. That puts it just outside
your Top Ten, but it's only been available a short while. Top ten
for downloads in the last week would put it second." The editor replies: "I had hoped to do a list by Most Downloads Last Week, but there didn't seem to be any way to sort the that way."
Re: LCD Panels "I'd like to see a survey of CAD users who have adopted LCD panels. Ater both of my higher-end Mitsubishi CRTs died on me curiously within a month, I went looking for replacement CRTs in the 19", $500 range. Guess what, there weren't any! "I ended up with cool-looking LCDs of the same size at the
same price, but they don't have the same response time. The visual
of dragging a window from one screen to another is much worse." The editor replies: "I prefer CRTs over LCDs. When my 19" ViewSonice gives out, I hope to purchase a new shortneck CRT -- if they ever become available in Canada."
Notable Quotable "They're not music players or MP3 players anymore, they're
iPod-like devices."
Copyright 2005 by upFront.eZine Publishing, Ltd. All rights reserved worldwide Article reprint fee US$250.00.
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