the business of cad
Issue #765 | February 12, 2013
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In This Issue
1. Venture Capitalist Buys Up CAM
- The Future by Battery
2. Out of the Inbox, our other regular columns.
Venture Capitalist Buys Up CAM
One of the puzzlements of the CAM industry is it failure to conglomerize, as has the CAD industry. An oligopoly of a half-dozen firms takes in the bulk of CAD revenues today: Dassault Systemes, Autodesk, Siemens AG, Nemetschek, Hexagon, PTC, and 3D Systems. In their struggle to grow in this mature market, they acquired competitors and fill-in firms to broaden their software and service offerings.
Not so in CAM, which is owned by a huge number of proudly-independent "mom and pop" firms active since the 1980s, and who have been successful in resisting take-over offers. (I'm assuming there were some).
Until now. The change in the air is due to two factors: (a) the moms and pops are reaching retirement age and (b) equity fund firm Battery Ventures has decided that CAM is an attractive area for profit.
"Luxembourg"-based Battery in September 2010 bought Vero Holdings with $50 million borrowed from HSBC bank. The aim of the venture capitalists is to consolidate European CAM vendors in a market it describes as "mature and fragmented," "a great opportunity," and worth $1 billion apparently. It put one of its own executives, Richard Smith, in charge as CEO of Vero.
(Despite the venture capital firm boasting in its knowledge of software, its Vero Web page shows a 3D wireframe view of an apartment in blueprint style, embarrassingly enough -- not exactly CAM material. See http://www.battery.com/spotlight/company/vero-software-executive-in-residence-builds-dominant-cadcam-platform/)
Even prior to Battery's involvement, Vero was making acquisitions, and so now Battery has a large number of familiar brand names in its collection, such as Surfware, Planit, Pathtrace, Sescoi, Alphacam, Edgecam, Licom, Radan, Smirtware, Javelin, Machining Strategist, MCS (Manufacturing Control Solutions), Camtek, Studio 4, Visi, and NC Graphics.
Battery was not the first. Julian at Freesteel lists a complex web created earlier by August Equity of shell corporations and Planit, first owned by Velocity Holdings. See http://www.freesteel.co.uk/wpblog/2011/10/long-corporate-ownership-chain . Vero's most recent annual report indicates that revenue for 2011 was GBP21 million, about $31 million but that it has liabilities of GBP51 million, about $75 million -- mostly loans. (Yup, I read all 37 mind-numbing pages of it.)
The Future by Battery
Battery's plan is simple: build the dominant CAD/CAM platform, it says. I, however, doubt the CAD part of the dominance, and the CAM half seems dubious if the firm concentrates on Europe only. An industry watcher tells me that he guesses the next country to be targeted by Battery will be CAM vendors in Japan.
So what's the future plan? Venture capitalists buy up firms they consider undervalued, rightsize them, and then sell them. They make their profit by selling turned-around companies, not by running it.
The question becomes, "Who is a likely buyer of this massive collection of European CAM software?"
"We expect to have 50% customer adoption by end it out calendar year - not by now. We're at roughly 20% now. To further clarify the math, Jim was talking about adoption to Creo 2.0 – which was announced (and available) in April. Thus, that product has only been on the market for about 10 months, during which time we've seen the 20% adoption. It wouldn't be unreasonable to expect that we could see another 20-30% adoption over the next 10 months."
- Julie Blake, PTC
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Out of the Inbox
Siemens PLM Software releases updates to four D-Cubed components: 3D Dimensional Constraint Manager, Collision Detection Manager, Hidden Line Manager, and Assembly Engineering Manager. Some of the functions in version 46 include a new reflection transform for hidden lines; and performance improvements for collision detection. http://www.plm.automation.siemens.com/en_us/products/open/d-cubed/product_news/index.shtml
But now bad news for Siemens PLM. In a video uncovered by Matt Lombard , Dassault Systemes ceo told users in Korea that his company will drop Parasolid: "...we have announced clearly that SolidWorks will adopt the V6 technology everywhere, modeling included. We're going to drop Parasolid." http://www.dezignstuff.com/blog/?p=8353
Intergraph's CloudWorx for SmartPlant Isometrics 2012 R1 creates as-built piping isometrics directly from laser scan point clouds. http://www.intergraph.com/products/ppm/smartplant/isometrics/cloudworx/default.aspx
HP redesigns its HP Remote Graphics Software (for real-time collaboration between multiple users) by reducing the network bandwidth required. http://www.hp.com/go/RGS
Luxion releases KeyShot 4 with Live Linking to models in Creo, SolidWorks, and Rhinoceros. Any object can be turned in to a point, area or IES light source. Color libraries from Pantone and Ral are added. And lots more. http://www.keyshot.com
Nemetschek AG increases its yoy revenue for 2012 by 6.8% to e175.1 million, about $227 million. The company owns brand names like Vectorworks, Graphisoft, allplan, and Scia.
"The previous code was just really horrendous," Meeks said. "Dialogs were constructed and drawn by hand – in fact, not even by hand. Programmers just sort of entered random numbers to lay them out, and it really looked awful."
- Michael Meeks, SUSE
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