CAD / PLM Shuffles

There have been several changes in the CAD / PLM market in the last year, with UGS being purchased by Siemens for $3.5 Billion, and with Dassault reducing its dependence on IBM Global Services. Both moves are surprising, since I don’t at all, see any synergy between Siemens and UGS, and the IBM-Dassault partnership was a fabulous one, so the reasons for it to be severed (reduced in importance) appear perplexing at best.

I have nothing against Europeans, but both the German logic and the French logic seem suspect, while the American Private Equity firms’ logic of wanting to sell UGS to someone, anyone, makes perfect sense. After all, they bought it for a lot of money, and needed to turn it over and take their profits!

What this tells me, is that the future of the giants of CAD and PLM – Dassault and UGS – are equally suspect. And, it also suggests, we take a good solid look at Autodesk, which has been having a superb run, having managed effectively its CEO transition from Carol Bartz to Carl Bass.

In general, the mid-market of CAD/PLM has been growing rapidly, and much of the high-end capabilities, earlier not available in the lower end systems like AutoCAd / Inventor or Solidworks, are becoming increasingly commoditized. The premium that the high-end players charged for their products (CATIA from Dassault, ProEngineer from PTC, UGS), will soon start to make less and less sense, and this sort of confusion will make it a great opportunity for the Autodesk sales force and VARs to wedge their way into important accounts.

Meanwhile, PTC has engineered a solid and surprising turnaround, and looks suddenly stronger than ever.

Comments

Sramana, great write-up. Lots of food for thought.

Randall Newton Friday, February 23, 2007 at 3:03 PM PT

Thanks, please feel free to contribute your thoughts as they evolve, fed by these posts.

Sramana Mitra Friday, February 23, 2007 at 3:48 PM PT

Sramana conveniently forgot SolidWorks as a serious player in this market. You cant ignore the strides they have made in this market, especially at CATIA’s and Pro/E’s expense.

UGS is doomed. Siemens buying them is like Boeing buying Delta, because the latter flies planes. Siemens is going to get burnt so watch the fun. I predict another sale in 2-3 years to another private equity firm at a significant discount from the purchase price. Money doesnt make the world go around, idiotic decisions like this do !

PTC, hmm, can someone say ‘dead man walking’ ? SolidWorks will continue to eats its lunch.

Yes, compared to all the zombie companies that are the leaders in this industry, Autodesk look like the one with a pulse – even if its a weak pulse at that !

Joe

Joe Blow Saturday, February 24, 2007 at 9:33 AM PT

Hi Joe,

You are absolutely right. Solidworks is a strong product, and very well positioned. It is owned by Dassault. In my view, having two competing product lines within the same company is going to be tricky to manage, as Solidworks gains in strength, and makes way into CATIA’s territory. Plus, Solidworks is American, while CATIA and Dassault, the parent is French. There is always an European versus American rivalry to deal with.

In contrast, Autodesk is clean, focused, and the best positioned, at the moment.

I do agree with you, that PTC’s turnaround is a big surprise to me. I hadn’t been tracking them, assuming that they were on their way to the grave, and suddenly, I found this stock rally! Wonder what went on there. Do you know?

Sramana

Sramana Mitra Saturday, February 24, 2007 at 12:45 PM PT

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