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Ralph Grabowski's Report on the Business of Computer-Aided Design
Issue #834 > October 28, 2014
Twin Peas of Different Pods
by Ralph Grabowski
In a world cluttered with AutoCAD workalikes, what can they do to stand out? Without looking up any references, I can count the names of a dozen AutoCAD work-alikes off the top of my head, ranging in price from $0 to around $1,200. The very first one launched in 1996. (It was VDraft from Softsource). The primary marketing message was and continues to be, "We are just like AutoCAD, except cheaper; oh, and we do some things differently/better."
The message did not work. In close to 20 years of trying, none of them displaced AutoCAD. Instead, AutoCAD is just now being displaced by Autodesk itself, through sales of its suites that throw in AutoCAD for "free."
The "built it cheaper and users will switch" tactic is discredited. At the time it seemed the correct approach. After all, AutoCAD LT was priced like a workalike, yet for many years outsold AutoCAD three-to-one. Looking back, it now seems like the approach was one of, let's sit-back-and-wait-for-sales-to-fall-into-our-lap.
Was an analysis ever made of whether the $500-CAD market even exists? Maybe $4,000 is the correct price for CAD. As far as the market is concerned, design is far too serious to be entrusted to cheap software.
CAD Experiences Its First Recession
At a conference in Europe earlier this month, a contract programmer caught up with me during break time to ask a question that clearly haunted him. Did I think that there really was a market for the CAD software he was helping write? "At one time, no," I replied. "But now there is."
This is how I explained it to him:
Traditionally, the CAD industry was recession-proof. Whenever one of the recessions hit, such as in 1990 and in 2001, design firms saved money by investing in more CAD. They paid for the new hardware and software by laying off employees. When economic times became better, firms again invested in more CAD, this time manning the new workstations by hiring more employees. For CAD software companies, sales only ever increased. (Hardware sales, however, suffered from commoditization.)
As someone growing with the CAD industry from 1985 onwards, I also didn't experience a recession, until 2008. This was the year that CAD vendors for the first time felt the pain from a significant drop in sales, because finally the CAD market was saturated. Design firms had all the CAD they needed.
Following the 2008 recession, the rise of new factors is helping the AutoCAD-workalike market:
The feature set of an AutoCAD workalike is now good enough. In the past, Autodesk maintained a furious pace of innovation to which the underfunded workalikes could not catch up. In a curious reversal, Autodesk in recent years slowed its development pace, while workalikes such as Bricsys, Graebert, and IMSI/Design are sprinting forward. (Autodesk instead invests in major functions that are of little interest to most AutoCAD users, such as point cloud processing, surface modeling, and AutoCAD for Mac.)
The bargain price of an AutoCAD workalike is now acceptable. Post-recession, design firms are looking for new ways to save on expenses; adding $4,000-CAD seats is no longer the acceptable budgetary tactic it once was, because mature CAD no longer provides the savings in operational costs as it did during the recessions previous. The giants of retailing Wal-Mart and BestBuy are starting to suffer from the rise of dollar stores as savvy consumers realize that they don't need to pay $20 for $2-HDMI cables that do the same job. CAD managers realize they no longer need to pay $4,000 (or even $1,300 for LT) for $500-CAD that for many seats does the same job.
I related to the contract programmer a conversation I had earlier in the day with a conference attendee. His civil design firm asked Autodesk how it could save money on $6,825-Civil 3D seats. Autodesk suggested they could be replaced by some $4,195-AutoCAD seats. The suggestion, he told me, caused him to wonder: could he find something that could save him even more than $2,630/seat? And that's when he came across BricsCAD, which saved him $5,840 a seat.
His firm now has a mix of Civil 3D and BricsCAD. Anything BricsCAD can't do (like create dynamic blocks) is done in Civil 3D or else he hires programmers to write the missing function. He expressed his increasing dislike of waiting a long time to get AutoCAD bugs fixed, being required to pay for subscriptions annually, and more.
So we here are in a curious nexus. Even as Autodesk is maneuvering to grasp customers ever more tightly (through cloud, mandatory subscriptions, elimination of upgrades and eventually of perpetual licenses), low-cost competitors are able finally to provide credible alternatives -- and TCO [total cost of ownership] reasons -- to slip from the grasp of expensiveCAD.
Bricsys vis a vis Graebert
Here I want to talk about the business of low-cost CAD. You can read elsewhere what's new in Bricsys BricsCAD V15 and Graebert ARES 2015. (I provide at the end of this article a list of blogs describing the new functions.)
My title "Twin Peas of Different Pods" refers to BricsCAD and ARES seemingly being similar products, but the two firms behind them run a very different business. The ceo of each software firm tells me that he is convinced his approach is better. Let's take a look at the differences.
Bricsys. The key, according to Bricsys ceo Erik de Keyser, is third-party development: make add-ons and customers will pile on through retail sales. In this, he has attained great success. He told me some years ago that he would know his firm was successful when it had attracted 500 third-party developers. At this month's conference in Barcelona, he announced 900.
To encourage them, he made the developer program free, as well as support and the annual user conference. He declared that Bricsys would not engage in writing add-ons; it would only provide a CAD platform, all kinds of programming languages and interfaces, and great support.
In recent years, however, the company has worked on a few add-ons, such as these ones:
Is there a problem? Just as many third-party developers invisibly use AutoCAD and ODA's Teigha for internal projects (not for outside distribution), so too with BricsCAD. Which is why there are only 1,200 applications from 900 developers. Nevertheless, add-ons are available in many fields, such as architecture, steel design, and civil works.
So, there is a new policy: if third-party devs don't step up, then Bricsys will fill in holes with add-on products written by its own development team. The biggest hole of all is the USA, the country in which BricsCAD is mostly invisible, and for which add-ons written to American standards in Imperial units are missing utterly. The good news is that the biggest hole also represents the biggest opportunity. I heard, for instance of an Australian firm working hard at modifying its civil software to USA standards. As well, Bricsys in the last year assigned two executives with decades of CAD experience to tackle the American market.
In the area of mobile CAD, Mr de Keyser announced his company has no interest in the market (for the foreseeable future) -- a turnaround from what we heard in years previous. They do, however, have a Chapoo app that runs on iOS devices; on mobile, PLM is easier to do than CAD.
Graebert. The key according to Graebert GmbH ceo Wilfred Graebert is sales to OEMs: licensing his software in bulk to other companies who take on the work of selling the software. He has no interest in selling one-sies and two-sies; zero retail sales for him. In fact, he considers his flagship software ARES a proof-of-concept flag that he runs up the pole for all to see that Graebert can write CAD well. It does not have to sell well.
OEMing doesn't end with sticking names like DraftSight or CorelCAD onto the tile bars of programs. Graebert provides white-label support to OEMs and their customers. ARES is provided on four operating systems, and OEMs can choose among them. He also engages in technology exchanges; the 2015 versions of the various CAD programs, for instance, all have a new API developed by Dassault Systemes. (The new API represents a restart of Graebert's aspiration for an online plug-in store, which will be marketed heavily in the coming months.)
Is there a problem? There are a limited number of companies who can afford to OEM an entire CAD system. Some surveying firms have adopted SIteMaster over the years. But I suspect there aren't too many more to sign up. We heard in the past a lot about DraftSight and CorelCAD, and heard a lot about them at this month's conference in Berlin. (Another is progeCAD for Mac.) But then two or three may be sufficient, what with Dassault Systems now boasting 2,918,786 DraftSight users -- second only to Autodesk.
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Bricsys vs. Graebert
The two firms tell me that they are not cooperating with each other, except to coordinate their conference dates so that we CAD journalists could make one trip to the Continent.
Bricsys sees no future in mobile CAD. Graebert is going all out with its ARES Touch software on Android.
Bricsys sees its part of its future in 3D MCAD, and this month showed an early version of BIM. Graebert has been doing BIM-like activity through SiteMaster for several years now, and this month expressed interest in developing 2D MCAD.
Both have online stores for selling add-ons. Both have heavily invested in support structures. Both have multi-OS and transferable licenses. Both see DWG as the single file format in which to store all data. Both sell CAD for under $1,000.
Oh, and they don't slag one another, for that would only help Autodesk.
More Information from the Live Blogging of the Two Conferences
Smart Ways to work with .dwg CAD blog by Rakesh Rao
http://rakeshrao.typepad.com/work_smarter_geotools/2014/10/index.html (18 blog posts on Bricsys International Conference 2014)
WorldCAD Access blog of Graebert Annual Meeting 2014
http://www.worldcadaccess.com/blog/2014/10/programming-with-graeberts-ares-touch-cad-program-for-androids.html (and earlier posts)
WorldCAD Access blog of Bricsys International Conference 2014
http://www.worldcadaccess.com/blog/2014/10/bricsys-ceo-de-keyser-sums-up-bic-2014.html (and earlier posts):
[Disclosure: Bricsys and Graebert paid for my air fares to Berlin and Barcelona, my hotel accommodation, and meals.]
And One More Thing...
Redsdk has been supporting GPUs and CPUs for its rendering software since day 1, and so they say that their Redsdk software runs on any cloud service provider -- servers with graphics cards (minority of cloud service providers) and those with processors only (huge majority of cloud services providers). Now Redway3d has its API to encode/decode data transfers between clients and the remote servers to get rid of third-party remote management software: Rednet API enables HTML 5-compatible clients. http://www.redway3d.com/pages/rednet.php
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