CAD Business model
Intro to an article sitting for long in my bin (almost a year now), I decide to revisit this article after reading one of Matt Lombard article to see if i can finally finish my article. I try to update it to make it actual, but some reference are dating back to the time i start writing it.
Update #2 Looks like i should have come out with this article long ago. Read Dave Ault last post http://solidedging.wordpress.com/2012/10/08/the-pitfall-of-cam-as-a-partner/
Long time since I wrote something ( and in the last two weeks I have my pc down not real excuse but this gave me the chance to relax)
In the last few months ( not to say 2-3 years) many things have change in the CAD world and the wind seem to blow in the Solid Edge direction. Although Autodesk and Solidworks still surf on their momentum, Solid Edge is taking a lot of velocity.
Reason i wanted to writes this article, is because Solid Edge get a lot of attention for it’s geometry creation tool ( Synchronous Technology) but also because other CAD try to get CAD user attention with all sort of gimmick.
So i decide to look at the CAD business from a different point of view to better understand what is going on.
I will explorer the three main CAD vendor, because they control roughly 50 to 60 percent maybe more of the market from the numbers we can get on the web.
No doubt Autodesk is big and ADSK is in all aspect of the digital life ( from CAD to civil to movie etc…). Their business model, from my point of view, is the old business model type where i’m big so i buy everything i want. In trying to cut the grass under the feet of the competition. SolidWorks seems to be last one on their list after ADSK acquire TSpline ( and now HMSworks and i probably forget few..).
If we look back, Autodesk was once a fairly good player with Mechanical desktop, unfortunately they miss the boat in 1995 and it took five years to put Inventor on the market and they rush to get software version match the competition. They also exercise their rights to acquire the Spatial kernel to develop their own ShapeManager kernel.
As time progress, Autodesk continue doing acquisition and try to get them work together. At this point I feel like Autodesk is more like a software integrator that glue together pieces of different puzzles.
We also have to understand Autocad heritage is still present and strong in everything they do. This heritage is base on a 3D wireframe and skeleton approach.
Wit Fusion Technology they try to answer Synchronous Technology but in fact this look like a update interface to AutoCAD. Behind the scene they rely on feature recognition to transfer data from/to the fusion environment. I’m not saying Autodesk is not capable of developing or innovate, but from my point of view it looks like they wanted to capitalize on existing stuff. Innovation might be an aspect of their business but not in their DNA.
Now that ADSK bought a CAM package i will not be surprise they will market as a complete solution, but keep in mind that ADSK is in pursuit of Siemens PLM, Dassault and PTC Since the mid 90′s. This CAM move should have been done maybe in the early 90′s. This reinforce my theory of Software integrator instead of Software developer ( personal opinion don’t get mad at me)
SW have opt for a business model that try to replicate Google, Apple, Facebook and other similar type of business model ( almost tempted to say other type of start-up business) , where they rely on the community (client) and partner, while SW essentially provide marketing services around a plateform. The problem they wanted to lock the customers in an ecosystem (Multi CAD interoperability). They have open mid as long as you operate in their ecosystem.
French radio program
This one is a french article about to you really own E-files
One clear example ( a massive CAM campaign about an 1 1/2 ago), just ask yourself why suddenly the integrate interface is essential. SW division and at the time I start writing this article Autodesk also didn’t have any internal CAM development program so if they wanted to compete ( let say with Siemens PLM) they have to get big $$$ out of their pocket or they have to open their architecture and promote the integrated interface. This give the appearance of an open business model.
Think about this who is the biggest winner a CAM company that have spend million if not billion $ over several years or decade that promote integrated interface or the company that provide a good marketing platform?
Not sure what SW will bring in 2013 but i have the feeling it will be the best product ever and it will be big and they will probably have solve all the problem relate to direct editing.
Do not forget the business model SW/Dassault have lock themselves in. This type of business model force them to come out with big numbers and funny web TV to suck designer attention to keep partners. Nearly two millions users advertise but only 1/8 maybe less worth it, the rest 7/8 are students.
Also this type of business model force SW to come out with solutions not always align with best practices, like integrating assembly workflows inside a single part.
Siemens PLM Software
Last business model Siemens PLM Software. Their business model is a classic one. It is a model that require more effort because SPLM choose to develop internally under the same roof CAD, CAM, PLM etc…If you look carefully, from all the three only SPLM have advertise a complete solution that can be scalable. The heritage of the company came as far as the mid/late 50′s.
“….The aircraft industry was one of the first users of computer systems for engineering design and analysis and McDonnell was very proactive in this endeavor starting in the late 1950s. Its first NC production part was manufactured in 1958 and computers were used to help layout aircraft the following year…..”
Why i say from the tree only SPLM, because SW as always been recognize has working independently inside Dassault, but that would change in the next couple years, Corporate Dassault extend its footprint. As of Autodesk until recently they had no real solution to manage design i think it is their third attempt with Autodesk vault and they had no real CAM until a couple days.
I suspect that someone may comment SW as a complete solution by pointing me to this.
Well i will answer…… this is relatively new, may be two years. For me this seems like and answer (copy) to SPLM longterm commitment. Siemens expose his strategy to serve SMB in 2005 with the Velocity series
The business model of SPLM to get partner is not to force them into their interface. It is the partner’s choice to decide what is best for their product and their customers. They do not choose the flavor of the day they look for long term commitment.
Siemens also understand that exchanging data is important, and the data should not be lock into a proprietary design system ( database). Parasolid and JT file format are good example. Another example is the PLMXML (http://www.plm.automation.siemens.com/en_us/products/open/plmxml/ )
In fact SPLM seems to have an Open initiative (http://www.plm.automation.siemens.com/en_us/about_us/facts_philosophy/open.shtml)
“…..A company must be approachable and engaging with customers and competitors. One example of the Siemens PLM Software commitment to an open culture and open business model is the PLM Components family of products. These products include some of the industry’s most widely used component software and development toolkits, as well as industry initiatives that support and promote these open solutions…..”
SPLM might looks like a traditional type of business, but it is not and old one. SPLM might not have the bells and whistle of young CAD but its business model is timeless.
While writing i fall on this on the web.
Looks like i may have paint a perfect world, that is not my intention. Each business model have its own challenge. I just want people to get the whole picture to understand how each player position themselves on the market and why. It is like Google, Apple and Facebook most of the users do not understand the nature of their business and they share valuable personal information. Imagine you download a Google play store apps and in less than a week you receive adds from cie trying to sell you stuff.
It took a couple of years for UGS and Siemens to get together. They probably do not have the hype of young CAD company in term of marketing but they have create an organization with good values, solid foundation with talent and experience and deep expertise.
The most exciting thing for the future, this traditional business model will not transform itself, but instead will evolve by loosing a little the tie and wear a sport jacket