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| Cambashi press release |
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THE MARKET FOR EXTENDED DESIGN APPLICATIONS -
AND BEYOND CBS.025/04/99/v2 A presentation at Cambashi's tenth annual seminar by Mike Evans and Nick Ballard - The CAD market is going through a sea change: developers and vendors need to take care in navigating the channel. The biggest change over the past year is that Windows has taken clear control of the market, squeezing out Unix, which is fast developing into a minority interest. Similarly, 2D draughting is rapidly being replaced by 3D solid modelling as the preferred design tool. Traditionally, users split into those who opted for simple 2D geometry-based CAD tools such as AutoCAD and ME10, and those who looked further at improving the performance of the engineering department, buying a combination of 3D solid modelling (such as CATIA and Pro/Engineer), design analysis and CAM software. What we now see is a split into five. A key indicator of how the market is going is the new top end, where buyers are looking at procedural improvements on and enterprise-wide basis. Beneath this are the old top end, filled by companies aiming to improve the productivity of their engineering departments with software products such as CATIA, Unigraphics and Pro/Engineer; a new engineering modelling segment, dominated by SolidWorks, SolidEdge, AMD and Pro/Desktop; a segment beneath that dedicated to geometry creation, with products such as AutoCAD and ME10; and an extremely low cost segment dominated by products such as AutoCAD LT and Visio. Notwithstanding these trends, 1998 was a flat year for end user expenditure on CAD, with no change on 1997 overall. However, the figures are distorted by a few companies that returned particularly poor results, most notably those focussing on large end user accounts. Without Parametric Technology Corporation (with Computervision, which it purchased during the year), in the market actually grew slightly, by +4.3%. For the future, Cambashi forecasts that the mechanical CAD market will see a continuing decline in the electronic drawing board, while sales of productivity tools - notably 3D solid modellers and associated applications - will grow significantly between 1999 and 2002. However, there will be far less change in the AEC market, where users will be more reluctant to upgrade their point solutions. With the move towards improvements in business efficiency, there is also a drive towards improving departmental performance and inter-departmental communications. The main barrier to this is people: to change the way in which new products are introduced, people must be taught communications skills and the ability to apply their knowledge for the benefit of the enterprise. Niche applications such as digital mock-up, document management and finite element analysis all show steady growth between 1996 and 1998, and this trend is set to continue. Cambashi believes that 1999/2000 will see healthy growth in the market for applications that are complementary to the core MCAD systems, especially digital design review, CAM and electronic product review software. A similar pattern can be seen in the AEC market, where applications such as site layout will continue to grow, although a decline is indicated in some areas, such as piping and instrumentation. Turning towards the CAM market, there is no evidence that the growth in 3D solid modelling is yet affecting sales. There was virtually no change in end user investment in manufacturing between 1997 and 1998, machine tool sales experiencing a slight drop. Users tend to buy systems and machinery in order to fulfill contracts: it would cost them less in capital investment if they were to develop relationships with a limited number of OEMs rather than spread their loyalties too thinly. The main question is whether all today's CAD vendors will survive. Competition is forcing change, and there is the opportunity for a major new vendor to break into the market. Some vendors are already coming in round the side with new applications. There has been a spate of mergers and acquisitions, with the large, mainstream CAD developers buying into complementary technology such as product data management, as well as companies offering lower end point solutions. Cambashi believes that the market for computer-aided draughting is set to decline rapidly as users move on to concentrate on improving their business processes. With the growth in ERP systems, users will be able to identify weak versus strong areas of activity, so the interface between design and the enterprise will assume increasing importance. Vendors need to focus on 3D solid modelling, and sell on business benefits, not techniques or technology.
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