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CS.
What are the other major market
opportunities?
Training
and support will be a primary growth area, and these services
will have to provide value. Historically,
people gave away software with the hardware to help the hardware
sales until they realised that the real money was in the software.
Soon there will be the realisation that there is less money
to be made from just selling the software than there is in the
training and support that can go with it.
Other exciting opportunities
include application
partnerships, e.g. implementation consulting and
product/contract design. This
is because as companies become more mature, they outsource more of
their “non-core” activities because it is often more
cost-effective.
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CS.
What does the Internet mean for
vendors, distributors and resellers, etc?
Many people take a very negative
view when they ask how the web will affect the channel. Many ask,
“Are you going to sell through the channel or via the web?” I
don’t think that it’s an “either/or” type of question.
I think vendors should ask, “how can the channel help
me?” and “How can
the web help the channel?”
The web offers new, different
opportunities in terms of support and education. There is no evidence that users can successfully implement 3D
modelling without local training and support. The channel brings
local training and support which is essential to help people think and work
in a 3D world. I
think the channel needs to think about how the Internet can help
them become more effective and offer new and better value-added
services.
Take this opportunity as an
example: in an ideal world, all SolidWorks resellers would have
someone permanently on hand to offer immediate assistance to any
callers/prospects asking for information about SolidWorks
products. But, in the real world, this is not practical, as dealers do
not have the infrastructure to do so.
The SolidWorks web page has an icon of a telephone that
customers can press between 9am-5pm.
Customers then just enter their name and telephone number,
and are guaranteed to get a call back within fifteen minutes from
someone on the SolidWorks support team.
The opportunity for resellers is for them to have the same
button on their web sites. Customers
would receive the same service, but from support personnel
describing themselves as from SolidWorks and the name of that
particular reseller.
Other opportunities similar to this
extend throughout training and support and SolidWorks will be
announcing more similar developments in the near future.
In the market as a whole, SolidWorks has demonstrated its
leadership by continuing to develop innovative products and
effectively has become the player that is moving the chess pieces,
which others are copying, (e.g. from the beginning, SolidWorks was
the first to have a FeatureManager in its software – for which
it received a US patent, but now most of the other CAD companies
have copied this).
On 25 September SolidWorks
announced the introduction of 3D
Instant Website, a new, innovative way for the channel to
interact with users. The
current problem is that if people want someone to see their
drawings in order to help them solve a problem, they have to send
the whole drawing, sometimes in bits and this uses up a lot of
bandwidth on the Internet. SolidWorks'
new idea provides users with a button on their desktops which they
can click on and receive an instant, password protected, web site
where they can post their drawings.
Users can then just send the web link to the person they
want to see the drawing. They will need no technical knowledge of web site creation.
Thus, this allows instant collaboration without requiring
the knowledge of html pages or how to put a web site together.
To
view examples of 3D Instant Website, visit www.solidworks.com/3dInstantWebsite
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CS.
What is your view on
ASPs?
I think there are at least two
markets for ASPs:
i.
Firstly, where a user does not want the overhead expense of
administering the ownership of the software, so they use ASPs as
and when they need them. The
vendor would host the site using an ASP hosting server so the
customer will not need any CAD administrator or tools, they can
just log on.
ii.
Secondly, where users do the same thing but require a more
flexible licensing model. They
may wish to rent from a centralised server, specific to their
company.
SolidWorks are prepared to look at
both. However, again,
the channel should not necessarily see this as a threat because
people will still need to learn about how to use the software and
have access to support when they need it.
SolidWorks would therefore see this as another partnership
opportunity.
For information on a major
syndicated research study into ASPs and the technical computing
market click here.
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CS.
Has the rapid consolidation of
the CAD market surprised you?
The CAD market is one of rapid
innovation and change. As
soon as one company does something, the rest struggle to keep the
pace. Sometimes
changing a competitor to a partner is the best way to survive.
From the earliest days, SolidWorks’ business model has
been about understanding from a partnership standpoint, instead of
trying to do everything ourselves.
The market is becoming a mature one, so naturally we are
seeing some level of consolidation between companies.
We predicted this when we joined with Dassault Systemes
three years ago, and it has proved to be the case that the
battleground is becoming filled with just a few major vendors.
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CS.
So how do you see
SolidWorks’ standing in the market now?
The make up of the market leaders
has been changing. A
year ago, PTC were more of a force.
But now SolidWorks and Autodesk are the main players.
SolidWorks have added more seats in the market than PTC.
Autodesk have sold a lot of software, but there is not a
lot of this being used in production. Software being used in production is essential because it
creates the network effect; as people use systems it drives
further demand. In
the future, there will be further shakeouts as companies compete
for market share. Some
dealers — those who make the most of new market opportunities
— will get stronger.
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CS.
How would you compare
the US and European CAD markets?
The European CAD/CAM channel is
more technically self-sufficient than its American counterparts.
This is probably because most CAD vendors/manufacturers are from
the USA and are relatively remote from their European distribution
arms. The European
distributors/resellers had to become more technically
self-sufficient and proficient.
In general, there is currently a
lag of 6-9 months between Europe and America.
Historically, this has been largely due to localisation,
i.e., a European company such as Computervision, would have to
take a software product and localise it into different European
languages and software versions.
However, I anticipate that this will be more like 2-3
months in the future because companies like SolidWorks are
designing their software to be multilingual in terms of the
systems they can work with.
Americans would benefit a lot from
the European view of the world - not least in the European's
ability to take more and longer holidays.
In America it is very hard to take more than two weeks off
each year!
Many
thanks to John McEleney for talking to CAD
SPAGHETTI. The ‘US view’ in the next issue of
CAD SPAGHETTI will
be from Jon Pittman, Vice President of Autodesk Ventures.
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In the American
channel, one of the biggest market opportunities is centred around
the 2D to 3D migration.