u p F r o n t . e Z i n e
t h e b u s I n e s s o f c a d
Issue #630 | January 26, 2010 | English Edition
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In This Issue
- How Intergraph is Integrating Coade
- How Will Autodesk React?
2. HP to Resell Stratasys 3D Printers
- Paraphrased Q&A
- A Dealer's Perspective
3. Out of the Inbox, and our other regular columns
Intergraph Acquires Coade
It was a press release I somehow missed, until a COADE employed pinged me: "Ralph, I'm sure you've read the press release at http://www.intergraph.com/ppm/COADE.aspx but you haven't had space/time/whatever to mention it." Last Friday, I got on the phone to speak with Patrick Holcomb, executive vp of global business development at Intergraph's Process, Power & Marine division, and Tom Van Laan, senior vice president of Intergraph’s new group acquired from COADE.
Mr Holcomb explained that Intergraph’s Process Power & Marine (PPM) division has historically made one acquisition a year, though they have recently completed two in the last three months, both COADE and Sigraph. Ideally, Intergraph-PPM looks for companies that are #1 in their space, and that fit well within that division’s industry target.
(In the distant past, Intergraph was one of the original turnkey CAD vendors who provided CAD software running on proprietary hardware, and at another time, sold and marketed MicroStation which was later transitioned to Bentley Systems. Their Solid Edge mechanical software was sold to UGS, the predecessor to today's Siemens PLM Systems.)
Something like 80% of Intergraph clients use some COADE software; Intergraph does not have PPM analysis software, nor any AutoCAD-based design software for smaller projects -- segments addressed by COADE. With Autodesk focusing its P&ID and Plant3D software at small firms, Intergraph's acquisition of COADE made sense. The PPM division of Intergraph already had the largest collection of software of any competitor in those industry segments according to ARC, and with this acquisition becomes larger.
As for COADE, it was one of the few remaining independent AutoCAD third-party developers still successful from the early days of our industry. Now 25 years old, COADE is Autodesk Developer Network member #38. The company has two lines of software:
- CADWorx (runs on AutoCAD) does 3D design of piping, steel, vessels, equipment, HVAC, and cable tray, as well as P&ID [piping and instrumentation diagrams]. See http://www.COADE.com/CADWorx
- Standalone software for analyzing pipes (CAESAR II), vessels (PV Elite), and tanks TANK). See http://www.COADE.com/Solutions%20Overview.shtml
The acquisition was completed earlier this year for a price that neither side will divulge, but that Intergraph states was their largest in the process, power and marine space ever. (Both companies are privately owned.)
How Intergraph is Integrating COADE
Intergraph's primary interest is in COADE's CAESAR II pipe flexibility and stress analysis software. CAESAR II already has an external link with Intergraph's design software, but now the plan is to integrate it more deeply. First, with Smart3D (Intergraph's newer 3D design system introduced in 2004), and then to look at improving integration with its older PDS [plant design system] software.
Tom Van Laan is the senior vp of Intergraph’s new COADE division, and he jumped in to say that in some cases 80% of engineering time is spent modifying 3D CAD models to make them suitable for analysis. "Basic interfaces exist, but customers want to do it without even having to think" via seamless integration between COADE analysis and Intergraph design software.
The CADWorx software will continue to be sold into the AutoCAD market. I asked about expanding it to other CAD programs, such as MicroStation. Nothing is planned to do that now, Mr Van Laan said. Their expertise is programming with AutoCAD, and in any case, AutoCAD has an 80% market share amongst smaller plant design firms. While PDS runs on MicroStation, Intergraph is upgrading those clients to its own Smart3D platform, which enjoyed almost a 14% revenue increase in 2009 despite the downturn.
The COADE office will remain in Houston TX, and all employees keep their jobs, other than the cfo who took retirement. COADE employees will stay in their current positions but are also encouraged to look for additional opportunities throughout Intergraph's 60 offices, should they wish to do so.
How Will Autodesk React?
Did COADE worry that Autodesk might cut them off, now that the world's largest CAD software company is developing its own piping and plant software? No, said Mr Van Laan. They use Autodesk's RealDWG API, which Autodesk wants to promote, and have never encountered problems with ADN. In any case, greater sales of COADE means more sales of AutoCAD for Autodesk. Mr. Van Laan began with a David vs Goliath analogy but then realized it did not apply -- ie, despite the outcome of that original competition, it’s better to be with one’s own Goliath than to remain a David.
"We expect our good relationship with Autodesk to continue," said Mr Holcomb. In any case, Autodesk signed an agreement to license Intergraph's Isogen software. (Intergraph acquired Isogen through its purchase of Alias, unrelated to Autodesk's Alias.) license deal with Adsk for fees, also licensed to Bentley -- purchase through acquisition of Alias. In addition, Intergraph remains a member of the OpenDesign Alliance, "and so we have a foot in both camps."
Mr Holcomb summarized, "Intergraph has the leading mega-project solution; COADE has the leading analysis and AutoCAD-level design solutions."
HP to Resell Stratasys 3D Printers
The agreement announced last week sees Stratasys making 3D printers and HP distributing them under the HP brand name. The 3D printers are based “initially” on Stratasys’ Fused Deposition Modeling (FDM) technology, which means other technology may be used later. (There are many different ways of printing 3D models; one of them is FDM, on which Stratasys hold a 20-year-old patent.) I expect HP’s price of the UPrint Plus to be the current price of around $19,000 – before extras, like maintenance, which includes supplies and repairs.
Figure 1: A UPrint Plus from Stratasys, the unit that I assume HP will be rebadging.
HP gets a warrant to purchase 500,000 shares at the pre-announcement price, a cost of roughly $90 million. The SSYS share value jumped 44% on the news of the deal, and so HP could profit $40 million when the warrants expire in seven years – assuming the share price stays up.
Although the intent of the agreement is for exclusive world-wide distribution, HP will initially limit sales to five countries in Europe: France, Germany, Italy, Spain, and United Kingdom; officially, there is no schedule for selling them elsewhere, but my understanding is that sales in the USA may begin in a year’s time. “Exclusive” means that HP can’t sell anyone else’s 3D printers “across all markets,” and Stratasys similarly is limited to not making agreements with other 2D printer makers – names like Epson and Canon/Oce come to mind.
(Stratasys will continue selling all its 3D printers in all countries, except for models branded by HP. Its Fortus units are unaffected by the agreement, and Stratasys hopes for improved sales from the new exposure provided by HP. Current Stratasys dealers are “invited” to become resellers of the HP model.)
HP first approached Stratasys in 2008, and then decided that they had the best technology for selling 3D printers to the “millions” of designers who apparently want one. They note that a “significant number” of CAD users are still 2D, and plan to ride the coat tails of these CAD users moving to 3D in CAD and in printing.
Stratasys is also counting on HP to boost the “undeveloped nature of our industry,” and as a result the company plans to grow its production from the current level of 2,000 units a year to 5,000. Within five years, Stratasys thinks it can have revenues of $500 million a year by selling 50,000 units a year [works out to $10,000 a printer] – assuming HP’s world-wide rollout actually happens.
There is, however, a catch. The exclusive agreement is surprisingly brief, initially lasting a mere 18 months. It does renew automatically for 12 months at a time, but both parties can agree to disagree annually. And, there are always the do-it-yourself 3D printers available for $750.
Paraphrased Q&A
Q: Which product(s) HP will roll out?
A: We will let HP announce the models in the middle of the year.
Q: When will the printers become available in North America? Why Europe first?
A: HP is new to 3D printing, and so they are test marketing in Europe first. For the rest of the world, you will have to wait.
Q: What percentage of your revenues comes from the five countries?
A: Some 25% of our sales come from Europe, and the five are the dominant countries for us.
Q: What is your manufacturing capacity?
A: We have just one shift a day, so we have significant capacity for larger volumes. Additional capital spending plans are needed.
Q: Are my economics different if I sell a 3D printer over an existing HP printer?
A: No.
Q: Any change in maintenance revenues?
A: HP will be responsible for maintenance, but we will supply parts.
Q: Is the HP label the only difference, or will this product be different from yours?
A: HP’s model will be very similar, with some modifications requested by HP.
Q: Is HP big in the CAD 2D printer market? Will this be a learning curve for them?
A: They are extremely large in the CAD market, with somewhere in the 60-70% range for market share. They began with pen plotters in the mid to late 80s. They are not familiar with 3D printing, but they and their resellers are very familiar with CAD customers, selling both inkjet plotters and computers. Plus, they have a sales force for the Fortune 1000 doing top-down selling.
Q: What about the pipeline that the existing dealers channel have established?
A: Everyone believes this will be a very smooth transition. Our resellers are very engaged in this to make it very successful. Our of our resellers have the ability to expand to also sell HP 3D printers.
Q: What is the potential for disruption in the existing reseller network? Will resellers gravitate towards Fortus or towards HP’s model?
A: About 10:1 ratio between Fortus to 3D printer resellers today, but we want to change that to get thousands of resellers selling 3D printers. Go from a couple hundred resellers to a thousand resellers, in a step by step process, to dramatically increase the number of 3D printers sold. Both Fortus and 3D printers can be sold by the same distributor.
Q: What is the logic behind the warrants?
A: Warrants are priced at market value [roughly $18]. They become valuable when Stratasys becomes successful. It is a seven-year warrant.
Q: Explain the exclusivity deal with HP. Can you assign another distributor? What is the length of the exclusivity?
A: We don’t need multiple partners. One partner world-wide does it. At least until September 30, 2011 with an annual automatic renewal if both parties don’t cancel.
A Dealer’s Viewpoint
But all is not light and happiness amongst Stratasys’s dealers. One told me, “We didn't find out about the Webcast until it was almost halfway through. Even more interesting than the unannounced announcement is the timing of it. Stratasys had a reseller conference last week, and the subject didn't come up at all. These are the people who sell the printers that made Stratasys' Dimension and uPrint lines interesting to HP in the first place. Given HP's small margins, you can imagine how thrilled those resellers were to hear about the deal.”
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We know data translation and provide immaculate developer-to-customer relations. http://www.okino.com
Out of the Inbox
Visual Integrity announces pdf2cad v8 ($195) for creating editable DXF or HPGL files from vector PDF files, with options to separate drawing layers based on color, line widths, or other attributes; consolidates multi-page PDF files into a single CAD drawing. Save 10% through Feb 14, 2010 with coupon code DR010TEN at checkout. http://www.pdf2cad.com
Jean of Visual Integrity notes that AutoCAD, ZwCAD, and Intellicad are the three most-used programs with pdf2cad.
AMV of Italy joins the Bentley Developer network so that its STEELWORKS 2010 for SolidWorks can interact with STAAD and the other Bentley products. http://www.amv.it/cms/data/pages/000072.aspx
DotSoft releases MapWorks 3.0 civil/survey and mapping software as a multiple-module system: Projections, Design, Points, Surface, and Sections. Requires AutoCAD, Land Desktop or Civil3D 2007 or higher. http://www.dotsoft.com/mapworks.htm
MultiEducator's Formulator Series are iPhone apps for architects, builders, carpenters, civil, environmental, electrical, mechanical, and hydraulic engineer: hundreds of formulas, graphics calculations, federal and state regulatory codes, and industrial code requirements. Prices range from $4.99 to $19.99 .http://www.multieducator.net
Avatech Solutions converts its Revit utilities into a commercial product, Avatech Utilities for Revit ($395). It will continue to be free for Avatech's Autodesk Subscription clients. http://www.avatech.com/revitutilities
Bricsys's Vondle project and data management system is now available in two versions: Basic and Pro. Basic bundles the Vondle Live Viewer and Vondle Repository. Pro adds a project-centric approach for project and data management. All features are accessible by the Open Standard SOAP API. http://www.bricsys.com/vondlelive
Gibbs and Associates ships GibbsCAM 2010 with more spiral machining options, new gouge check projection, a new lead in/lead out flip option, new axial shift damp option for trimming applications, and support for countersink and keyway cutters. http://www.GibbsCAM.com
And Alibre releases Alibre CAM 2.0 for 2.5, 3, 4, and indexed 5 axis tool path creation and g-code output to 160 CNC machines. http://www.alibre.com
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These were some of the news items posted during the last week at the WorldCAD Access blog <worldcadaccess.typepad.com>:
- Interview with Coade employee over Intergraph's purchase
- David Levin launches his English-language blog
- Q&A on Stratasys' 3D printer deal with HP
- SolidWorks caves in on DWGxxx registration
- Delay-blogging the HP-Stratasys announcement
- Stratasys wins
- No need to go to the airport to get your body scanned
- PTC describes its approach to social media
And at the Gizmos Grabowski weblog <worldcadaccess.typepad.com/gizmos>:
- Fixing old hardware: iPod Mini battery replacement
- Fixing old hardware: Palm TX Touchscreen
- Our children's fascination with analogue
Hardware News
3Dconnexion's 3D mice now support Missler TopSolid 7 providing CAD/CAM software. http://www.3Dconnexion.com
Seminars & Conferences
GeoTec Event 2010 is Apr 13-15 in Toronto Canada. http://www.geotecevent.com
Second annual Open Design Alliance World Conference is in Orlando FL USA between May 4 and 5. http://www.opendesign.com/contact
New/Updated Books/eBooks
I've updated the entire line of ebooks for Bricscad V10:
1. Learn Bricscad V10 in a Day ($20)
http://www.upfrontezine.com/lb8
2. Customizing Bricscad V10 ($40)
http://www.upfrontezine.com/cb8
3. Bricsad V10 for AutoCAD Users ($21.60)
http://www.upfrontezine.com/lb8
These three titles are also available for users of Bricscad V9 at the same Web pages and for the same price.
WorthWhile Web
http://www.lulu.com/product/download/after-the-software-wars/6276446
After the Software Wars (free PDF ebook)
by Keith Curtis
- Thanks to Pandelis Latroudakis, Latroudakis Consulting
http://gizmodo.com/5452501/the-apple-tablet-interface-must-be-like-this
The Apple Tablet Interface Must Be Like This
by Jesus Diaz
http://www.businessweek.com/smallbiz/content/jan2010/sb20100119_143718.htm
Lessons from Google's Underwhelming Nexus One Show
by Carmine Gallo
Letters to the Editor
I suspect that ribbon bars have a bad rap because most users first experienced them when they were forced to re-learn MS Office. Personally, I continue to fail to be able to find common commands, and I have to look up their location in help. No fun, for sure. That said, new users to a product designed around the ribbon paradigm don’t seem to have any complaints. We keep hearing great things about SpaceClaim’s ribbon UI.
- Blake Courter, co-founder
SpaceClaim
The editor replies: For me, the problem is that the ribbon elements are not laid out consistently: some icons are larger, some are stacked, some are in drop lists, some in hidden subpanels, some lack words.
Toolbars: icons are laid out in straight lines.
Menus: words are laid out in vertical lines.
Of course, the whole OS UI could use an overhaul, since non-pro users find overlapping windows confusing.
Re: Unhappy New Year
You can also add AutoSolids to the Unhappy New Year list -- partly due to the economy, but partly also due to Autodesk improving AutoCAD's solid modeling ability. They haven't brought it up to par with AutoSolids, but it's been enough to reduce our profits to an unacceptable level. We feel bad for our previously very-happy customers, many of whom have told us that they can't/won't upgrade their AutoCAD if it doesn't have AutoSolids.
We can't help that one, but to help other AutoCAD users we've made all of our products free to download (http://www.autosolids.com/downloads.htm), no strings attached. If anyone's interested in pushing the code further, email sourcecode@autosolids.com. Happy New Year!
- Scott Slavik
For those who are having a problem with DRCauto, they might be able to leverage an inexpensive product called Visual Cadd. The APIs are open and they have COM Objects. Drawings can be saved in DWG format. They would probably have to rewrite their own scripts, but should be able to get the same solutions. The website is http://www.tritools.com.
- coyhb
The editor replies: "Another fully programmable DWG alternative is Bricscad, which is half the price of AutoCAD LT."
Thanks for the info [on former key developer Leonard Liang willing to help Toolkit Max users at http://www.cadsta.com]. I am trying to find out who owns the software code to see if we can revive this, as we are product developers. It would be utter shame to see the product die.
- Steve Bungay
Envision IT <http://www.envisionit.com.au>
Spin Doctor of the Moment
NetTabs [netbook-sized tablet computers] will be purchased by tens of millions of people in 2010.
- Paul Lee, Technology, Media and Telecommunications, Deloitte
Notable Quotable
It’s crazy how insecure I am, how much I need to be sure my laptop doesn't suck.
- Liam Cassidy
http://theappleblog.com/2009/12/15/the-nexus-one-a-non-story/
Contact!
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Entire contents copyright ©2010 by upFront.eZine Publishing, Ltd. All rights reserved worldwide. Letters sent to the editor are subject to publication. Article reprint fee: $250 and up. All trademarks belong to their respective holders. "upFront.eZine," "The Business of CAD," and "On your desktop every Tuesday morning" are trademarks of upFront.eZine Publishing, Ltd. Letters to the editor may be edited for clarity and brevity. Translations and opinions expressed are not necessarily shared by upFront.eZine Publishing, Ltd.
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