May 15, 2006
PLM and cPDm Update
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Jack Horgan - Contributing Editor

by Jack Horgan - Contributing Editor
Posted anew every four weeks or so, the EDA WEEKLY delivers to its readers information concerning the latest happenings in the EDA industry, covering vendors, products, finances and new developments. Frequently, feature articles on selected public or private EDA companies are presented. Brought to you by If we miss a story or subject that you feel deserves to be included, or you just want to suggest a future topic, please contact us! Questions? Feedback? Click here. Thank you!

Laugh! That's a great question. It has always boggled our minds. If you think about it in the software industry, which we are in, we take seriously the challenge of managing product lifecycles and managing the process which is very interactive, very team intensive process of developing software. We have very sophisticated tools from companies like Rational Software which is a very large firm and now part of IBM that manages the information to control our software development process. With the mechanical CAD vendors as you mentioned there is the very same thing. Very large companies developing very sophisticated products manage the product lifecycle and the very interactive process of doing mechanical design through computer information tools. Why in the world the electronics industry has not grasped onto that was a confusion point to us. It provided us an opportunity to grow into quite a large company. MatrixOne has taken that over and they are extending it from their traditional markets which were outside the semiconductor space into that space. I think that's good news for the semiconductor industry in general. More specifically it is good news for very large design teams that have to deal with this very thorny problem of managing data across their network. Lots of different people touching it. I have talked to many vice presidents and directors of engineering about chip
tape outs that have failed not because of any sophisticated timing problem or sophisticated P&R problem but had failed simply because they used the wrong data. It's amazing!
SoCs have millions of gates in comparison to airplanes and cars that have thousands or tens of thousands components. However, unlike automotive and aerospace components, gates are not individually designed and manufactured. Auto and aerospace companies increasingly sell products assembled from products of their suppliers. Further, in these industries there are numerous variants or models based upon the same core design differing in the addition, deletion or substitution of components. In the semiconductor world variants are most often generated through software or firmware. PCB are more like autos and planes in these regards but differ in terms of scale making cPDm capabilities less

Dassault Systemes

Dassault Systemes has two cPDm 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.

Dassault long standing (over 2 decades) relationship with IBM for sales and marketing has been evolving. According to the firm's 20F report more than half of Dassaults's revenue comes from licensing products through IBM, 59% in 2003. Initially, IBM had responsibility for and performed all the S&M activities. Dassault ported its software to IBM middleware like Webservices and DB2. IBM Global Services undertook major implementation contracts. IBM began to contract back to Dassault for various training and support activities. In 2004 Dassault became a Master Agent for IBM in France and Belgium whereby they manage and provide marketing support to the French and Belgian network of IBM
Business Partners. In June 2005 the two firms announced that Dassault will be responsible for operation of the sales channel of IBM PLM Business Partners in the SMB market in selected European countries and in the U.S.

In July 2004 Dassault announced the creation of SMARTEAM Europe, a new business unit dedicated to the sales, marketing, technical support and service of its SMARTEAM Collaborative PLM Solution in Europe.

Dassault reports its financial data in euros. The table below uses an average conversion factor from euros to US dollars provided by Dassault.

$M 2001 2002 2003 2004 2005
Tot Rev 709 728 853 988 1171
NI 84 118 153 193 217
PDM Rev 63 78 107 126 151
% Total 8.8% 10.7% 12.5% 12.8% 12.9%
Table Dassault Systemes 5 Year Financial Performance

Dassault Systemes plus MatrixOne

Dassault expects operational synergies to yield at least $8 million in 2006 and $25 million in 2007. MatrixOne has a largely direct sales model versus Dassault's reliance on IBM, IBM business partners at the high end and VARs at the low end. By customer segment MatrixOne revenue breakdown is High Tech 49%, Automotive 23%, Aerospace/defense 12%, Industrial 10%% and Consumer Products 6%. Dassault sees MatrixOne strengths in semiconductor, medical, apparel and E&E as complementary. In attempting to explain how three distinct PDM/CPC product lines Enovia, Smarteam and MatrixOne fit together Dassault has a chart something like the one shown below. The chart graphs two types of


In previous acquisitions like SolidWorks and SmarTeam Dassault acquired companies offering less expensive and narrower product lines, so called mid-range products. It could be argued that this was a defensive move to protect their high end products or to hedge their bets. They have given the earlier acquisitions considerable independence and have not moved to merge the products or channels of these acquisitions with their high end offerings. MatrixOne brings with it a high end direct sales force and relationships with numerous system integrators.

The challenge will be managing three somewhat overlapping product lines and sales channels. It will be interesting to see to what extent Dassault leverages this opportunity to become more even more independent of IBM. Competitors like UGS will be sure to attempt to exploit fear, uncertainty and doubt (fud) regarding future strategy and direction in much the same way competitors attacked UGS when they merge with SDRC.

The top articles over the last two weeks as determined by the number of readers were:

Zarlink Expands ClassSwitch Ethernet Platform with New Devices Targeting Triple Play and Enterprise Services. The new ZL33032 and ZL33050 chips are the industry's first Ethernet switches integrating embedded memory with patent-pending protection switching and enhanced per-flow QoS features - key elements in the delivery of advanced services including IPTV (Internet Protocol television) and end-to-end private VLAN. The devices deliver the critical switching and aggregation performance required for IP-DSLAMs (IP-digital subscriber line access multiplexer), MTU/MDU (multi-tenant/multi-dwelling unit) switch
systems, PON units, and micro-MSPPs (multi-service provisioning platforms) carrying Ethernet services over SONET/SDH networks.

EVE Announces Strong Growth as it Closes Fiscal Year 2006. EVE reported strong growth in bookings of 40% over the previous year. EVE has reached profitability that, on top of the recent $6 million in funding, provides the means for further expansion. Highlights of fiscal year 2006 include the introduction of EVE's third-generation ZeBu (for Zero Bugs) verification platform family that boasts a top speed of 200MHz. Fourteen customers have purchased this latest generation of ZeBu.

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-- Jack Horgan, Contributing Editor.


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