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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