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| Cambashi press release |
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USER SPEND ON IT IN INDUSTRY CBS.023/04/99/F A presentation at Cambashi's tenth annual seminar 1998 was a year of substantial and rapid change from the vendors' point of view. The first quarter saw lively activity across the board and a positive outlook for the year. Quarter 2 saw leading CAD vendors take considerable interest in product data management, which looked as if it would give a new impetus to computer-aided design (CAD) system sales. Later in the year, ERP vendor share prices took a beating. But by the first quarter of 1999, major CAD vendors started on the acquisition trail again, even though, overall, industry remains under pressure. Forecasts from the Computer Suppliers Federation, the Financial Times and Cambridge Econometrics all indicate that the year 2000 should be a turning point, with a return to growth once attention shifts away from solving Millennium and Euro compliance problems. The statistics for Europe, the US, Japan and the rest of the world show that 1998 manufacturing IT sales were strong in all sectors with the exception of Japan, which experienced a 4% decline to 91.0 billion Euros as a result of the Far Eastern financial crisis. Most sales organisations, CAD suppliers included, divide the world into countries in determining the location of their sales outlets. But there is a far wider range in the pattern of gross expenditure on CAD if Europe is divided, not into countries, but into regions. Taking account of this in developing their sales strategies could help IT suppliers to improve their sales activity:success ratio. Looking specifically at UK industry, this is surprisingly similar to the European average in terms of the total number of companies in the country, their total earnings and their employment levels. France and Italy are also similar to the European average, and Germany is moving back towards the average. But UK manufacturing industry is going through a difficult period, and this is reflected in the shift towards purchasing low cost, out-of-the box CAD systems. Similarly, the major ERP systems are now being targeted at the middle of the market, and the resellers, with their specialist expertise and developing partnerships, are assuming increasing importance. Cambashi's analysis shows that the CAD market is now mature, and buyers are going for commodity products off-the-shelf. The challenge for the industry lies in establishing enough value-added resellers (VARS) with the skills, expertise and broad-ranging product portfolios to take on business process improvements types of project, including PDM and specialist applications, for example. The mid-market generally wants ready-to-go applications rather than implementation projects. However, there are also innovators in the mid-market who are ready to work with vendors and VARs if they can see business benefits at the end of the tunnel. In this sector, there are clear opportunities for the VARS to seize power from the large consultants if greed does not lead them into over charging. |
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