In 2000 PTC formed two major business units: “Windchill Solutions” and “MCAD Solutions”, to be better able to focus on the Windchill side. PTC's Windchill revenue did in fact increase dramatically from $13 million in 1998 to $214 million in 2001. Unfortunately for PTC, MCAD revenue decreased by an even greater amount. By diverting resources from the MCAD side, PTC arguably lost MCAD technical ad vantage, customer loyalty and market share. Sadly, during the last three years, PTC revenues have slid in both sides of the business.
Many of the 33,000 Pro/E customers are relative small and so their data management needs are sufficiently handled by the popular Pro/Intralink offering, which is less expensive than Windchill. In order to help boost Windchill sales, PTC repackaged the offering. PTC introduced Windchill Link solutions such as ProjectLINK. This consists of pre-configured, integrated products designed to address specific business-critical manufacturing functions that can be implemented with reduced configuration effort in as few as several weeks in accordance with a pre-defined implementation methodology. In the second quarter of 2003, PTC began selling “Flex 3C”. “3C” means Create, Collaborate and Control. This includes Pro/E Wildfire with advanced engineering modules, Windchill ProjectLink, and Windchill PDMLink as a data management option. Cumulative seats of Windchill now stands at 262,300 with 8,000 in the last quarter. There are a total of 1,092 Windchill customers and another 1,000 who acquired Windchill through purchase of Flex3c.
PTC has tried to reverse the downtrend in its MCAD revenue through the introduction of its next generation Wildfire product. It was announced in June 2002 with considerable fanfare and finally released in first quarter of 2003. The jury is still out on how successful this effort will be.
Dassault Systemes has two PDM product lines: Enovia, a high-end enterprise offering, and SmarTeam, a less expensive and narrower offering for SMBs and engineering departments. The Enovia product line dates back to IBM's Product Manager, acquired by DS in early 1998. SmarTeam is an Israeli company, in which DS acquired a majority interest in June 1997.
Enovia products are sold exclusively by IBM and IBM business partners with DS receiving 50% royalty payment. Enovia has been most successful with very large CATIA users in the aerospace and automotive sectors. SmarTeam is sold through the IBM channel and a VAR reseller channel. In July 2003 SmarTeam announced a distribution agreement with Avatech Solutions, one the largest integrators of Autodesk software with 18,000 clients. SmarTeam claims 2,800 customers. In July IBM introduced PLM Express that bundles SmarTeam, CATIA, WebSphere and IBM hardware for medium sized businesses.
UGS PLM Solutions:
UGS PLM Solutions, formerly EDS PLM Solutions, is the result of EDS's acquisition of Unigraphics from McDonnell Douglas in 1991 and ten years later, its acquisition of SDRC (Structural Dynamics Research Corporation) in August 2001. The latest acquisition and the subsequent purchase of outstanding public shares of Unigraphics cost EDS approximately $1 billion.
In the last quarter before its acquisition SDRC reported total revenue of $121 million and Metaphase PDM related revenue of $47 million, a rise of 22% year-over-year. Metaphase accounted for 38% of total SDRC revenue. At that time there were 400,000 seats of Metaphase, growing at about 40,000 per quarter. Metaphase had originally been a joint venture between SDRC and CDC. SDRC bought out CDC and in early 2000 acquired Sherpa Systems, the early PDM industry leader with an installed base of around 90,000.
Unigraphics Solutions (UGS) had revenues of $526 million in 2000. UGS reported in its 10K filing that iMAN accounted for 12% of total revenue for all of 2000 or $67 million. On October 23, 2000 UGS acquired Engineering Animation, Inc (EAI) for $178 million net of cash received. EAI offered Internet-enabled solutions for visual product collaboration and digital mockup.
EDS has committed to continuing support and enhancement of the product lines of both Unigraphics and SDRC. EDS re-branded the product lines of the two companies. SDRC's Metaphase became Teamcenter Enterprise and UGS's iMAN became Teamcenter Engineer. EDS embarked on a program to provide interoperability between the product suites for the two companies.
On March 14th a private equity group of Bain Capital, Silver Lake Partners and Warburg Pincus announced it had reached a definitive agreement with EDS to purchase UGS PLM Solutions, EDS' product lifecycle management subsidiary, for $2.05 billion in cash. The transaction, in which each private equity firm is an equal investor, represents the largest private equity investment ever made in a technology company.
Autodesk has a number of third party partners in the area of data management such as SmarTeam and Cyco. At one time there was an Autodesk WorkCenter PDM offering. Autodesk had also been a minority investor in Motiva, a mid-raage PDM vendor that went bankrupt. On August 28, 2003 Autodesk introduced Vault, a new data vault to bring workgroup management capabilities to Autodesk Inventor customers. Vault is integrated with the Autodesk Streamline online collaboration service. On October 7, 2003 Autodesk announced a strategic alliance with Microsoft Corporation whereby the software leaders will integrate Autodesk's engineering data management (EDM) software with Microsoft Business Solutions (MBS) enterprise resource planning (ERP). Despite these developments, Autodesk does not normally present itself as being in the PLM marketplace.
Another player who has recently stepped onto the PLM stage is Oracle, the global #2 ERP vendor. In its most recent quarter Oracle posted revenues of $2.1 billion and net income of $440 million. One can not ignore the entry of such a major software vendor into this marketplace. Oracle's PLM offering is more similar to SAP than to DS, PTC or UGS. The core module is the Advanced Product Catalog that centralizes all product and component information in one catalog or central repository for access by other PLM applications, Oracle applications, and authorized external parties. Other Oracle PLM products include CADView 3D for design viewing and markup, Project Management for tracking and forecasting, Project Collaboration for project status reporting and design change management, Sourcing for supplier contract management, and Configurator for managing configuration rules for complex products.
From a high level a reasonably compelling argument can be advanced that there is a need and in fact a growing need for better design data and design process management in EDA. One can point to the sizable market for such tools in the parallel mechanical market. However, to date there have only a few, not terribly successful, commercial efforts in this area for EDA. A plane, train, automotive vehicle or major piece of machinery has thousands of individual parts or subassemblies that must be manufacture or purchased from a multitude of potential suppliers. SoCs may include a number of third party IPs but not in such large numbers. With interactive 3D images one can readily and quickly communicate design issues in mechanical products even to non-technical personnel. This is not the case for IC design data.
Perhaps, this is simply a missionary sale with much education required in the end user community as to what cPDm is and what are its benefits. So far the pcb segment seems more receptive. This could be because it is more closely connected to the mechanical world.
A fundamental law of salesmanship says no pain, no sale. However attractive a vision of better data and process management, of collaboration across the extended enterprise and so forth, if there is not a significant pain to alleviate or eliminate, it will be difficult to capture budget or even mindshare for cPDm tools. As long as the cost to maintain and operate home grown tools is tolerable and as longs as their limitations are not seen as having a significant impact on costs and TTM, cPDm will remain a difficult sales.