March 2002


A Changing Climate for CAD

When we last visited the state of the CAD industry in March of 2001, the industry leaders we interviewed focused on the Internet, ease of use, and consolidation of CAD vendors. For this year's look at CAD, our experts were outspoken on ease of use, 2D to 3D migration, and how the changing economic climate has affected the CAD software market.

As a general rule, most of the vendors we interviewed are not changing their marketing strategy for new customers as a result of the economic downturn. If anything, many vendors are focusing more on their current customers than targeting new ones.

"We're marketing to the people who are already our customers," said John McEleney, CEO of SolidWorks. "As the economy gets a little more challenging, and some of our competitors try to drive their price down in the market, the one good thing about having a large installed base is that you're going back to people you already have a relationship with, so your cost of sales should be lower," he explained.

"Our initial installed base provides a very rich, fertile ground for continued building of those relationships and a nice business. There is a lot of opportunity for new business," said Brian Shepherd, senior vice president of MCAD technical marketing for PTC. "A lot of companies feel they need to be ready when the economy turns with a stable full of great products. The way they cut costs in the short term to weather the storm usually starts in their manufacturing organization where they ramp down production. They're trying to minimize physical inventory, but they're still very focused on creating intellectual inventory," Shepherd added.

Some vendors such as VX Corporation, a CAD/CAM supplier, are actually increasing their marketing efforts. "It's a real opportunity at this point," said Bob Fischer, vice president of sales and marketing for VX. "Companies have to do as much as before but with fewer people. We've changed the amount of face time, doing things like Web seminars. We need to go to the people - they won't come to us."

While much attention has centered around the economy since September 11, there were signs of a downturn at least six months before that, according to David Primrose, MCAD product marketing director for EDS PLM Solutions. "The economy took a knock, but life goes on, and people are purchasing products that have to be manufactured. In economic times like these, companies turn to tools that will increase their productivity and help recover costs as a way of solving the problem. Those companies that are far-sighted will look upon a CAD investment as one that will give them a very high return, rather than a cost they can't afford," Primrose explained.

The Cost of CAD

The type of CAD system a company can afford is more important now than it was in the past. Cost-cutting and budget-watching have taken a front seat to flashy features. According to Robert Kross, vice president of Autodesk's Manufacturing Division, "Companies look at a lower-cost solution in economies like this. There has been much more awareness of the engineers who hold the intellectual property of the company in their heads. Everyone believes that this year, we're going to see the economy blossom again. Companies are using the downtime to train more."

Companies with low-cost CAD products are finding it much easier to sell their software. Bob Mayer, executive vice president of sales and marketing for IMSI - which offers its TurboCAD V8 Professional program for just under $500 - believes that customers are getting the message that you don't have to spend a lot of money to get professional functionality. "In the past, we had only one product that sold for $99, and the perception was that a $99 product couldn't have much functionality. Over time, we've raised the retail price by about $200 on that product, and most importantly, we put in the CAD functionality that CAD professionals expect," Mayer said.

Relatively new companies with new products face the challenge of competing both in pricing and in functionality with established "legacy" systems. "The economy, as far as who we're marketing to, hasn't changed," said Shaun Murphy, vice president of marketing for IronCAD. "There has to be a higher level of confidence before people will take their wallets out of their pockets. Since we're a new company and we just introduced our InnovationSuite last October, we didn't need to make any adjustments. We brought it out value-priced and packaged for the price-conscious. Right from the beginning, we targeted our packaging, our products, and our pricing to the small- to medium-sized business," Murphy explained.

For the leading mid-range and high-end CAD vendors, it's more a question of whether customers can afford not to invest, according to Geoff Rogers, marketing manager of the Americas for IBM. "You have to look at the entire cost of what you're implementing. Look at the entire cost of what it's going to take to implement that solution, and then look at the benefits you'll receive therein. In this economic environment," Rogers said, "I think the question is not 'how can I afford to invest in product lifecycle management,' but, 'how can I afford not to invest in a product lifecycle management solution'?"

McEleney believes that when saving costs, companies need to look at how much they already have invested in a CAD system, and what they need to do with it. "In the large-scale enterprises," McEleney said, "they're not going to switch to a lower-cost alternative, because CAD costs are a small fraction of what the overall costs are."

PTC now offers the lowest-cost alternative - free downloadable software. Last month, the company introduced Pro/DESKTOP Express, a parametric, associative solid modeling program built on the same kernel as Pro/ENGINEER. According to Shepherd, the reasons for offering the free software were simple. "If you're a Pro/ENGINEER customer today, but you want to do business with a supplier who doesn't use Pro/E, that customer had a few-thousand-dollar barrier to get over to buy Pro/E. What if the person who doesn't use Pro/E could download an application for free from PTC.com that read in the Pro/E data because it's based on the same kernel?" The value proposition PTC is offering, said Shepherd, is that Pro/DESKTOP Express is a full-featured CAD system. "It's part of our game-changing strategy," he added. "In our industry, we're looking to turn things upside down."

The Migration Continues

One of the issues facing CAD companies today also was a primary focus a year ago. Will 2D to 3D migration continue, and does widespread adoption of 3D CAD tools need to happen? This issue divided our experts more than any other aspect of the CAD market.

"In today's world, everybody already has a system. No one is starting with a drafting board and pencil anymore," said Kross. "We have a very large focus on 3D with Autodesk Inventor. Our objective is to shift our entire installed base to 3D." To that end, Autodesk has announced the Autodesk Inventor Series, which incorporates both 2D and 3D products - Autodesk Mechanical Desktop 6, based on AutoCAD, and Autodesk Inventor 5.3 3D design software. The new combined product allows users of AutoCAD, AutoCAD Mechanical, and Autodesk Mechanical Desktop to keep using their products while they get started with 3D by using Autodesk Inventor.

"Our customers get the advantage of keeping what they're using today, plus the new capability of a much easier to use product. Some customers will go gradually from 2D to 3D, but I hope we make it so easy for them, that they just say, 'I'm going to do this,'" said Kross.

"We see companies moving from 2D to 3D every day," said Rogers. "When you move to a 3D environment, you can immediately do things in maybe one step that used to take you five in a 2D environment, so you see immediate benefits." IBM offers the CATIA Companion, which allows companies to move into 3D without being intimidated. Rogers explained that CATIA Companion sits on the same workstation as CATIA. "When there is a specific topic on which you have a question when working in CATIA, you can enter into the Companion product, and it steps you through what you're trying to do in 3D."

According to Fischer, VX chose not to support either 2D or 3D, but to offer both. "In some circumstances, creating a quick drawing in 2D is sufficient. You can either work in the world of 3D or do it quick and dirty and get it done without style," he added. "Many 2D users don't ever have to use 3D. But if it needs to be part of an assembly, that must be created in 3D and exist as a digital model."

Primrose agrees that 2D will never entirely go away, but he sees 3D as the best choice. "There will always be people who refuse to move from 2D. They might be able to make a drawing on the paper, but they get no benefit out of having a simple paper drawing. When it comes to changing designs, there is tremendous opportunity for errors if you don't have 3D."

Primrose also sees ease of use as a barrier to 3D that still exists. "Going forward, if you ask people what the most important attributes of a CAD system are, I don't think we - ourselves or our competitors - have come up with a radical change in usability. While we have lots of people talking about clever, cool features, the next thing is to come up with a whole new paradigm that will make CAD systems a whole generation easier to use."

Until that happens, 3D won't be the dominant technology, according to IronCAD's Murphy. "It's still probably a 2D design world," he predicted. "Do I believe 95 percent of people will be using 3D in the near future? No, I don't. It doesn't always make sense to use 3D," he added. "Many 2D users will tell you that the value they would get from moving to 3D is not worth the pain. You have a toolbox, and you pull out the right tool for the job. You wouldn't say, ÔIn the future, all repairs will be done with a hammer.' Design also has a bit of that, even though you don't have as many tools. There are certain tools you use because they are the best for the job. You have to make the call," Murphy said.

IBM, Autodesk, and SolidWorks have products designed specifically to help users move "painlessly" to 3D, which they feel will be the majority of the CAD world very soon. "I think 98 to 100 percent of people will use 3D tools. I think it needs to happen," said Kross. "If you make machines and you use 2D, and you're trying to compete with the machine maker down the street who's using 3D, you can't compete. He'll make a better machine he can understand better, and even more importantly, he can use his design data and product data in different ways - in his brochures, on his Web site."

SolidWorks' McEleney agrees, but adds that the migration will happen more quickly than most think. "The fact is it won't happen this year, but it won't take ten years - I can tell you that. The world will move to 3D for a number of reasons, and the drivers behind it are simple," he said. "The average workforce is getting older, and as the older workers retire, today's graduates are the ones who grew up playing video games. They learned and work in a world based on 3D. As the older generation with a 2D legacy retire, the resistance level to 3D will come down."

Is a completely 3D world a better one? McEleney has mixed feelings about that. "The scary thing is as we adopt these 3D tools, are we going to lose any of the elegance and simplicity of engineering? As a vendor, I'm hard-pressed to fight that, because I think it's true. But it's a change for the better," he said. "If you look at the products manufactured today, they're all better because of 3D design tools."

LEWA Herbert Ott GmbH in Leonberg, Germany, used Solid Edge (an EDS PLM Solutions product) to design this pump and piping assembly.

Pac West Racing used Autodesk software to design this chassis.

Solo Golf used IBM's Product Lifecycle Management (PLM) solutions to design its new putter.


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