We have not revised our target this year

Jeff Ray joined SolidWorks in 2003 from Progress Software, a business
software vendor, where he was responsible for all customer-facing field
operations in different countries as vice president,worldwide field operations.
Previously he served as vice president, global solutions at Compuware, where he
launched the companys integrated software/services practices and grew its
annual sales from zero to $100 mn. Ray began his career at IBM, where he held
numerous management positions over a 17-year period.

Jeff Ray brings more than 30 years of experience in global technology
sales, management, and operations to SolidWorks. As CEO, Ray is steering the
company toward continued market leadership and profitability, ensuring that
SolidWorks delivers software that helps customers around the world design better
products. In an exclusive interview with Dataquest at the sidelines of
SolidWorks World in Orlando, Jeff Ray talked on various issues ranging from
slowdown impact to new verticals, to newer technologies. Excerpts

SolidWorks World talked about new innovations in the CAD world likely to
become mainstream over the next few months (like touch devices etc). How many
such innovations are feasible, business-wise, and are actually getting
incorporated in SolidWorks product roadmap for the next 12-18 months?

As I see it all these innovations are definitely feasible, if not over the
next 12-18 months, at least soon enough. I do see voice recognition as a reality
in the near future. If speech recognition techniques are being used successfully
in email, messaging and word documents today, I see absolutely no reason why
this technology cannot be adapted to a design and 3D CAD modeling environment.
We at SolidWorks have recognized the benefits of speech recognition in the
design process and are incorporating it into our design software. Earlier what a
mouse used to do, now a microphone will do, because design engineers will just
have to speak to the system to create designs. Designers can give the
specifications of design for mechanical objects, equipment or automotive parts
in a much simpler manner now.

Our key commitment is to improve the user experience by constantly innovating
and improving the user interface. Since an average user spends over 70% of his
time on these software, it is necessary to make the user interface usable and
enjoyable so that designers can stay focused on the design flow and do not have
to worry about getting the usage of the software right.

We are also working on including the 3D touch surface. When a physical device
is put on the surface it will give you a 3D image.

A significant section of your client base (smaller engineering design
guys, auto ancillaries, etc) have got badly hit the world over owing to the
global downturn. In such a scenario, have you undergone a change in
pricing/licensing mechanism or any strategic shift in product marketing to
enable these clients to still come to SolidWorks? Also, have you consciously
made any effort to expand to newer verticals to offset the problems in your
traditional clientele?

Our pricing models have in fact been defined keeping the smaller engineering
establishments in mind. This genre of companies form a significant part of our
customer base so, it is but natural that we have planned our pricing keeping
these companies in mind. Yes, they would be affected by the downturn. But it is
in such an environment that great companies must invest resources on innovation,
so that when the business scenario brightens up they will be ready to meet the
market with stronger, better products.

We are constantly looking for new markets and opportunities. So, when old and
returning opportunities are slowing down, it is but natural that we will expand
to newer vistas. Alternate energy and medical electronics are two sectors we are
specifically looking at.

Can you please elaborate on the operational merger that is taking place
between Dassault Systems (DS) and SolidWorks (I mean in case of manpower and
infrastructure)? Also, in some product ranges the two are competing against each
other. Are you then not cannibalizing each other; and are there any joint
marketing strategies in place?

The operational merger between DS and us is happening now because there is
no better time than the present. DS is a strong company, and there are a lot of
opportunities for synergy between our teams. In a lot of waysour product, our
mission to help customers design better products, our cultureits business as
usual.

We actually do not have competing or overlapping products. Each product in
the DS umbrella is strictly defined for a particular audience. Each engineer is
different and the software reflects their needs. Each brand in the DS family has
a deep understanding of our own customer base.

We do not co-market products, but we do market the DS family as one. At
times, we may showcase a customer that uses two or more DS products from within
two or more brands, and we always love to include our sister brands at any of
our events.

In light of the global recession, how have you revised your target for
2009? What are the specific product ranges and geographies that will witness
increased focus during these times?

We have not revised our targets for this year. Yes, the opportunities are
fewer as customers are careful with their spending. However, there are still as
many as 2 mn 2D CAD users around the world and as many 3D users and they are all
potentially our customers.

There is an immense potential for the adoption of 3D CAD in India. Theres a
large domestic market that had been using 2D tools because of their
affordability, but to be able to compete in the global market in terms of time,
quality, and overall engineering design and innovation theyll need to move to
3D. Were reaching out to this market and we want to make sure were the vendor
of choice for them.

India holds a tremendous potential for us because for every seven 2D CAD
users there are three 3D CAD users here.

Can you elaborate on your R&D budget and whether it is getting pruned this
year? Also, what is the roadmap for your R&D over the coming year?

Our R&D roadmap is on stream and is progressing as planned. We will need to
continue to invest in R&D as customers will want to maximize and completely
leverage their R&D investments. Our Indian R&D operation in Pune plays a
critical role in the worldwide environment and a lot of mission critical work is
led out of India.

As mentioned earlier, we will continue to focus on enhancing the user
experience by adding new and innovative technologies like voice recognition and
touch capabilities.

Another key factor that our R&D program will focus on is to partner with our
customers to help them design ecologically friendly products. Factors
influencing material choice have grown increasingly complex over the last few
years. Material costs have been rising for years. CAD and CAE technologies
enable engineers to freely experiment with lower-mass geometries and alternative
materials. With the right design package, engineers are now positioned to gain
an edge in a world increasingly concerned about the environmental and societal
impacts of the products it manufactures, uses, discards or recycles.

What are the three new technologies/areas where you would bet on growth in
the coming year? What are your expectations from emerging markets like India and
China?

With the concern of the impact of various products on the environment
growing rapidly, product engineering companies are increasingly concerned about
the impact of their products on the environment. Regulations are also getting
stricter.

Fuel-efficient cars, solar-heated buildings, clean-burning power plants,
recyclable packaging and low-voltage lighting are dramatic examples of products
that help balance consumer needs with good environmental stewardship. Yet
realistically, all products have the potential to be designed with
sustainability in mind if engineers really think about making products better
while using materials that positively affect the environment. Implementing the
practical aspects of sustainable design involves the following considerations
which can be met effectively at the design stage.

SolidWorks has been traditionally strong amongst SMBs, while competitors
like PTC or Siemens have been strong with large aerospace/automotive companies.
Are there plans to expand your portfolio beyond the SMBs too?

This sector holds a wealth of opportunity for us in India. With engineering
design outsourcing activity gaining importance in India, manufacturing
organizations in the small and medium segment have realized the importance to
adopt state-of-the art technology to stay abreast of their principals and stay
competitive in a highly competitive global business ecosystem. They have
recognized the business potential and the benefits of adopting best-of-breed
technology, and are pulling out all stops to leverage the best possible
technology available, not just in 3D CAD but in other domains as well.

This is where we see the opportunity and we will continue to do what we are
best at.

Rajneesh De

rajneeshd@cybermedia.co.in