Peeking Behind Iron Curtain II: How Russian CAD firms abide with sanctions following the Ukraine invasion

Issue # 1,136  |  Inside the Business of CAD  |  8 August 2022

Limited number of customer-countries for Russian nuclear plant design software firm Neolant

There is profound irony that programmers in Russia are responsible for much of the CAD software we in the West use every day, yet Russian CAD firms have made little headway exporting their own end products to us.

Software with names like nanoCAD (an AutoCAD workalike), T-Flex (MCAD), and Kompas-3D (also MCAD) have at some point been marketed in the West; doubtless they are obscure to you.

Firms that write foundational code that helps Western firms develop CAD software have, however, found success. Firms like C3D Labs (kernel components) and LEDAS Group (contract programming) receive more than half their income from outside Russia.

When David Levin arranged for me to tour Russia in 2009, the number-one question CAD vendors asked me was how to sell their products in the West. I told them they faced the daunting task in converting their user interface and documentation from Russian cyrillic to English and other languages; from Russian design standards to Western ones; and, toughest of all, thinking in the way that Western marketing thinks.

(I wrote about the firms I visited in The Russian CAD Market, available from ebooksonline/2015/07/rcm.html for $126.)

Thirteen years ago, Russian firms still dominated their home CAD industry. Western software mostly was bootlegged. Autodesk Russia then found success in making AutoCAD users legit by offering an older version (with its lower hardware requirements) for $1,000 initially — a quarter the US price. With time and with the urgency of being compatible with globalization, Western firms like Dassault Systemes, Siemens, Autodesk, and PTC came to dominate CAD in Russia.

We were surprised when Putin made the ill-fated decision to invade the sovereign country of Ukraine, and then he was surprised at the speed of the backlash from Western countries — given that Russia is the world’s largest exporter of oil and wheat.

For Western CAD firms, it turned out that pulling out of Russia was an easy decision: it made them look good, while losing only 0.5%-2% of their global income. They could just about pencil that in as a marketing expense. For instance, last quarter PTC lost $4 million from ending its operations in Russia, a pittance compared to the $81 million PTC says it lost in the same quarter due to the stronger US$.

 

Coping Strategies

Cover of isicad magazine showing Siemens being substituted by Russian CAD firms in a soccer metaphor

So, what is happening behind the new iron curtain depends on who you are.

Russian Users of Western CAD Software: The “lucky” ones are the ones with permanent licenses; they can keep right on working. Those with subscriptions might be blocked when the next payment is due — depending on where payments are handled. (Not all Western tech firms have cut off existing customers.) Those who depend on cloud-based software are at greatest risk.

Russian CAD Firms Selling Largely in Russia: With Western firms leaving, local firms face a bonanza now that they have a market less encumbered by competition. Here are some of the Russian CAD programs that could be substituted for Western ones:

Western CAD Software       Discipline          Russian Substitute
-----------------------------------------------------------------

AutoCAD                    General CAD         nanoCAD

Revit                      Architectural CAD   Renga 

Inventor,Creo,Solid Edge   Mechanical CAD      KOMPAS-3D,T-Flex

SmartPlant                 P&ID,plant design   Hydrosystem

Parasolid,Spatial          Components          C3D Toolkit 

TeamCenter                 PLM                 -none-

 

Russian CAD Firms That Found Success In the West: They set up bank accounts and cloud servers in other countries, and continue working with non-Russian customers.

Russian and Ukrainian Programmers Working for Western Firms: From news reports, some have left the country. Nemetschek Group said, “Our brands have taken immediate actions to protect our local people [in Russia or Ukraine?], from organizing visas to providing refugee housing to financial support.”

Russian Government: It launched a program to encourage Russia-developed technology. Here is a list of some of the support mechanisms that the government proposed early on, although I do not know how many came into effect:

• Subsidies to develop software

• Jobs offered to foreign workers with no need to approve work visas

• 0% tax rate for critical tech companies

• Loans at 3% interest for firms that do not lay off staff

• Preferential mortgage rates and exemption from military service for techies

• Discounts on insurance

• Free TLS certificates for entities whose certs are revoked

 

More recently, the Russian government allocated 37 billion rubles over two years for “software import substitution” — to develop new, local software that can substitute for non-Russian programs. Thirty-seven billion sounds like a lot, but amounts to only 600 million in US dollars; we recall that it took a hundred million to develop Onshape. On the other hand, software development costs are much, much lower in Russia than in USA.

As David Levin reports in the August, 2022 issue of isicad (Google translation to English), there are restrictions on the use of the funds:

• Only the two best proposals in each field will be funded

• There must be no conflicts of interest with government departments or existing customers

• Existing firms are not eligible for support

• The software must be exportable, so that 2/3 of its income comes from outside Russia

• Winners decided in September and development to begin in October

 

Independent software vendors have found success in Russia, but government-funded initiatives have not, historically. A decade ago, for instance, the government funded a made-in-Russia RGK geometric kernel for CAD that nobody uses; its Web page was last updated in 2014.

What Ralph Grabowski Thinks

Photo credit: Dmitry Neymyrok, Reuters

The Russian developers I spoke with want to be at peace with Ukraine, but would not go on record in saying so. They are, unfortunately, affected by the historical delusions of a single man.

It is nevertheless fascinating to see the impact of technology developed by Western countries. PLM, in particular, is a key program that Russian firms have found difficult to write their own and that matches Western capabilities, and so Siemens Teamcenter is deeply entrenched in much of Russian industry.

To end, I’ll leave you with an article in which Russian CAD developers agonize over the next steps to take in developing substitute-local software: “We Can Do Without Siemens.” In it, developers ask themselves, by how much can we untangle ourselves after one-two decades of incorporating technology from Western firms?

For instance, domestic developers all use Windows as their OS platform, and switching to Linux would give them independence — but at what point should they divert resources to rewriting all of their their CAD code for Linux?

Programs of disentanglement and independence (by Russia as well as China) will be successful in neither the short nor the medium term.

 

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PS: If you would like to help the people of Ukraine in a practical manner, Missions without Borders is a charity that was already working in Ukraine before war broke out and so is well-placed to assist, and is one that upFront.eZine has supported for many years: worldcadaccess.com/blog/2022/03/practical-help-for-ukraine.html.

Open Design Alliance has some of its programmers in Ukraine, and so it has set up a fund to assist them with relocation and temporary housing. To date, $104,375 has been raised. opendesign.com/blog/2022/april/oda-organizes-support-ukraine-developers

 

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And in Other News

Business Advantage released its annual survey of CAD trends, in which 557 respondents took part, rating their use of 19 aspects of CAD by way of three parameters: awareness; perceived importance; and current and future usage. The result is a 97-page report, from which I reproduce a figure above.

The most important statistic is that 2D drafting is still very, very, very important — while there is little use in CAD of sexy, marketing-driven tools. You can get a copy of the report (after registration) from business-advantage.com/landing_page_CAD_Trends_2022_MFG.php.

- - -

IntelliCAD Technology Consortium releases a robust-looking IntelliCAD 11.0 to its members:

• Increased ways of working with Revit and Microstation files

• Pre-release of the new IcARX API compatible with ObjectARX

• Updated SDKs in ODA 2022.12, Windows 11, and Spatial ACIS 2022

• Connect map data to PostgreSQL, MySQL, and WFS servers

• New UI elements, like 3D positioner, view cube, visual style controls, model flythroughs, and section planes

Members adapt the core code with their labeling and verticals, and then sell to the public. www.intellicad.org

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Spatial division of Dassault is no longer providing code for older operating systems after release 2023 1.0: 32-bit Windows will supported for two more years, and Red Hat 7 is dropped. On the good news front, Spatial will start to support Linux for ARM with release 2024 1.0. www.spatial.com

- - -

Here are some of the posts that appeared recently on my WorldCAD Access blog:

• Compilation: The Twitteratti snarks on Facebook’s first-ever revenue decline

• Overview: The State of the Smartphone

• Report: Canada proves the folly of single-source tech

• Opinion: Life of Pei

You can subscribe to the WorldCAD Access blog’s RSS feed through Feed Burner at feeds.feedburner.com/WorldcadAccess.

 

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Letters to the Editor

I started on Generic CADD back in the ’80s. When Autodesk shut it down, I went to Visual CADD at www.TriTools.com. It’s basically the same thing as Generic. You would adapt right away.
            - Warren (via WorldCAD Access)

The editor replies: Visual CADD development seems to have stopped with v9 beta in 2018, but I am willing to be corrected on that.

- - -

I used Generic CADD for years. I loved it, and could create anything with that software and my Calcomp 8-pen plotter. I resisted the move to AutoCAD so much that I changed my role at the firm I was working for so I would not have to use CAD anymore! LOL

One of my favorite memories is from when I was working late into the night and calling a very responsive tech support team in Bothell, WA [Generic CADD’s head office]. They were awesome, laid back, and really knowledgeable. I actually enjoyed being put on hold: it seemed I would always get to hear the song Wicked Games by Chris Isaak long before that song was a hit in Nebraska. Those were the days!
     - Jeff Ahl

 

Re: BIM

The three basic Rules of Plumbing:

1. Cold on the right

2. Hot on the left

3. Stuff flows downhill

It is useless stuff like BIM that is ruining CAD software companies. They are concentrating their resources on useless stuff rather than the basic drafting software.

Name the number of CAD software packages that can produce a proper 3D isometric perspective view from their 3D model. I can count them on one hand, and have five digits left over.
            - Lewis Balentine

The editor replies: There certainly is a disconnect between what is possible (cloud, VR, BIM, PLM) and what is required, although some CAD firms have been working semi-automating repetitive drafting tasks, which drafter will find useful.

 

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Spin Doctor of the Moment

“We are seeing more usage intensity and higher quality than previous versions of our operating system.”
     - Satya Nadella, ceo, Microsoft, speaking of Windows 11

 

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1  Peace and goodwill