Solid French Connection Works

Everything is big in Texas is what the Texans say. SolidWorks World 2011 held in San Antonio, Texas did live up to the claim and was impressive as the previous ones have been. Though short of big announcements this year, the show had all other regular elements that customers and resellers look for.

Looking Back and Ahead

The year 2010 was clearly better than the recession hit 2009 for all leading CAD and PLM vendors like Autodesk, Parametric and SolidWorks. It is estimated that the revenue of SolidWorks in 2010 would be in the range of $400-425 mn. Over a five year period from 2006 to 2010, the pattern is growth till 2008, then a drop in 2009 and recovery last year. In this period, 2006 and 2010 seems to be at the same level. Sandwiched in between were the pre-recession periods of 2007 and 2008 which were big growth years and then the forgettable 2009.

On the cards in 2011 are three online collaborative tools n!Fuze, Live Buildings and Post3D. First up is most likely to be n!Fuze, which is an online PLM product aimed at meeting the simple collaboration and data sharing requirements of its existing customers. It is planned for release in Q2 2011. Another online collaborative tool that is expected to be released in the second half of this year is Live Buildings, which is a 3D conceptual design tool focused on integrated planning and early cost estimation. Aimed for use by professionals in the AEC industry, Live Buildings utilizes the much anticipated V6 online platform to facilitate project team collaboration. Post3D is the third collaborative tool that is expected to be released in the third quarter of 2011. This product allows users to communicate their thoughts in 3D through an online, immersive experience. Post3D is powered by a gaming engine and users can experience scenes and products as avatars.

Getting Closer to the Parent

SolidWorks started off 2011 with the announcement of Bertrand Sicot as the new CEO. A thorough bred salesman, Sicot was earlier the executive vice president of sales, based in France. Sicot is no stranger to SolidWorks and has played an important part in improving revenues since 1997. The former CEO, Jeff Ray was promoted as executive vice president of geographic operations for Dassault Systmes (DS) in Vlizy, France. This is a newly created position reporting directly to DS president and CEO Bernard Charls.

Talking about his plans, Sicot said, I intend to carry on the work and standard of excellence that Jeff and the leadership team have instituted since SolidWorks was founded. My goal is to create an evolution rather than a revolution. Quite logical, one could surmise, considering that Rays leadership was almost iconic.

But it could be a tough act to follow. In a chat, Ray said that Sicots confidence, dedication and commitment to helping people succeed both personally and professionally would make him the right person to lead SolidWorks. The qualities described would fit those of most successful people, but is that enough to be a successful CEO? Time will tell.

Another aspect that is becoming increasingly clear over the last couple of years is the close identification of SolidWorks with its parent Dassault Systmes (DS). SolidWorks was acquired by Dassault Systemes in 1997, less than fours years after it was founded. The acquisition proved to be crucial for both companies. While DS set its foot into the lower end MCAD segment and the US market, for SolidWorks it was a lifeline to success. In the words of Ray, In our early days we really needed to be a part of Dassualt Systemes. We realized that as great as the technology may be, engineers are reluctant to use new technology from unproven companies. So we needed to demonstrate that we not only could survive but thrive. The acquisition by Dassualt Systemes served the purpose.

But that is as far as it went. There was hardly much more in terms of collaboration or sharing of technology. Each kept going after their respective markets.

However there has been a change since 2007, which now seems to have picked up even more speed. Today the two companies share technology, have common M&A roadmaps, use of reseller channels, common email ids and more. While all of this is logical, what is interesting is the underlying branding exercise that seems to be on. An exercise that seeks to improve the brand of the parent in the sphere of influence of the child. Not very common but perhaps necessary. Bernard Charles, the CEO of Dassault Systemes took center stage at SolidWorks World for only the second time, and would certainly want to erase the state of Dassault who?

India Shining

Though a late starter in the India market, SolidWorks has done well since 2007. The key segments are machine tools, automotive industry, consumer industry and engineering services. From seven VARs at the beginning of 2007, the company now has 25 and is planning to add 6-8 VARs by the end of the year. We need to go back to the basics and will focus on channel, capacity and competency, said Manoj Mehta, country manager India. The southern and western markets have done well and the new structure has three of the four regions in this belt alone. Another good news for SolidWorks in India is that the percentage of customers opting for the annual subscription service to upgrade to the latest version, has increased and is now close to 60%. With a cost differential of 1:5 between 2D and 3D, converting the 2D user continues to be the biggest challenge in India. This means from a user base standpoint, SolidWorks would trail behind Autodesk in 2D CAD. In order to rectify that, SolidWorks has introduced the free DraftSight 2D software. With this strategy SolidWorks will be better placed to convert a user from using software from competition, and also undercuts into a revenue base of the competition.

On the education front, more than 500 colleges in India use SoildWorks; up from 250 three years ago. The education bundle which consists of SoildWorks Premium plus the Simulation and Sustainability modules sells at a fraction of the commercial price. A single seat in the education bundle is as low as `5,000.

According to PM Ravikumar, director education sales, the big thrust this year is going to be the appointment of SolidWorks Authorized Training Centers (ATC). These ATCs would focus on students to offer a certification known as Certified SolidWorks Associate. The plan is to have about 20 ATCs and the aim is to train about 500 students in the first year, said Ravikumar.

The India economic growth story has had its logical impact on the performance of SolidWorks in India. Mehta believes that India would have broken into the top 10 markets in the world for SolidWorks, and that a 30% growth is sustainable in the India market for the next three years. On the global front, after a dull 2009, SolidWorks is back on the growth trajectory. With a new CEO imported from France and with the increased collaboration with its parent, it is becoming clear that a solid French connection works.

E Abraham Mathew
abrahamm@cybermedia.co.in