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Jeff Rowe
Jeff Rowe
Jeffrey Rowe has almost 40 years of experience in all aspects of industrial design, mechanical engineering, and manufacturing. On the publishing side, he has written well over 1,000 articles for CAD, CAM, CAE, and other technical publications, as well as consulting in many capacities in the design … More »

CAM Consolidation 2015: The Circle Continues To Get Smaller

 
January 29th, 2015 by Jeff Rowe

With what seems like forever, we have witnessed the ongoing and perpetual consolidation of the CAD industry as companies continue to get swallowed up by others. Some of the acquisitions have been successful and some, well, not so much. We’ve witnessed CAD companies acquiring CAD companies, simulation companies acquiring CAD companies, and other types of technical software and service companies acquiring CAD companies. With all the attention seemingly focused on the CAD side, it’s sometimes easy to forget that there also has been a significant consolidation through acquisition on the CAM side, as well the past several years. Let’s take a quick look at a few of these acquisitions as the CAM circle continues to get smaller.

Edgecam 2014 R1 Workflow

In 2008, Cimatron acquired GibbsCAM from Gibbs and Associates for its production machining capabilities. Skip ahead a few years when 3D Systems Corp. announced Nov. 24, 2014 that it had signed a definitive agreement to acquire all of the outstanding shares of CAD/CAM software developer Cimatron Ltd. The agreement calls for 3D Systems to acquire Cimatron in an all-cash purchase valued at approximately $97 million. Cimatron was acquired to strengthen 3D Systems’ portfolio in 3D design and manufacturing, add complementary products and technology, extend 3D Systems’ direct and reseller sales organizations, and broaden the development team.

Like all deals of this type, the transaction is subject to closing conditions, including requisite regulatory approvals and approval of Cimatron’s shareholders. However, the Boards of Directors of both companies have approved the proposed transaction, and the deal is expected to close in Q1 2015.

Late in 2013, Autodesk announced it was acquiring CAM-centric software giant Delcam plc for just under $300 million. Since the acquisition was completed early in 2014, Delcam operates as a wholly owned, independently operated subsidiary of Autodesk, with seemingly no significant changes for Delcam’s business, based on conversations we’ve had with personnel from both respective companies.

In July 2014, metrology powerhouse Hexagon AB bought UK-based CAD/CAM developer Vero Software. I considered this a huge (and smart) move for both companies.

Hexagon markets its products and services under more than 35 different brands worldwide. Its operations encompass hand tools, fixed and portable coordinate measuring machines, GPS systems, construction machine control systems, level meters, laser meters, total stations, sensors for airborne measurement, aftermarket services and software systems.

Vero Software is a major developer of CAD/CAM software. It develops and distributes software for aiding design and manufacturing processes, providing solutions for the tooling, production engineering, sheet metal, metal fabrication, stone and woodworking industries. Several well-known brands in Vero Software’s portfolio brands include Alphacam, Cabinet Vision, Edgecam, Machining STRATEGIST, PEPS, Radan, SMIRT, SURFCAM, VISI, and WorkNC, along with the production control MRP system Javelin.

Despite the diversity of Vero’s applications, they all address the rising challenges of achieving manufacturing efficiencies.

The acquisition strengthened Hexagon’s software offerings, providing the means to close the gap of making quality data fully available by extending the reach of the newly developed MMS (metrology planning software) to include CAM (manufacturing planning software).

This constant flow of acquisitions certainly make for interesting times. As much as anything, I think these acquisitions illustrate the desire for technical organizations to diversify when it makes sense for symbiotic relationships. Instead of trying to corner a market by acquiring all competitors, more and more technical software acquisitions seem to be happening with technologies that complement existing product offerings, not just expand similar lines of offerings.

The common thread that runs through all of these acquisitions is maximizing manufacturing capabilities and efficiencies, so the companies involved should do well with their complementary roles.

So, is the continuing consolidation of the CAM market necessarily a bad thing? I guess I’d have to answer that question with a “yes” and “no.” On the one hand consolidation means fewer choices and some current customers feel they are being held hostage to the whims of the acquiring company. However, on the other hand, it’s more likely that an acquiring company will continue to develop the software and support its current customers, while trying to appeal to a bigger segment of prospective customers.

Keep in mind, too, that there are a number of decent free, open source CAM software offerings. Of course, not all of these are “production ready,” but in the end add to the fact that there are plenty of CAM options still available despite market consolidation.

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5 Responses to “CAM Consolidation 2015: The Circle Continues To Get Smaller”

  1. Gordon says:

    “..it’s more likely that an acquiring company will continue to develop the software and support its current customers” My experience shows the opposite is overwhelmingly true.

    Once a company is purchased, development on the purchased software all but stops while the new owner tries to a) recoup some of its investment and b) position the product within its product suite. Often key developers also leave during the acquisition process, taking critical product knowledge with them.

    While I am sure examples exist, I have yet to witness a purchase that brings significant value to a customer.

    • Jeff Rowe Jeff Rowe says:

      Large or small, I will admit that companies that are acquired often ramp down or disappear completely as a brand is absorbed and integrated. I’ll also admit that acquisition is not always a good thing, especially for existing customers concerned about future activity or inactivity. However, with the ever-increasing cost of development and support, acquisition and subsequent consolidation can ensure the survival and future of a technology at the expense of a “brand.” Such is life.

  2. Jeff Rowe Jeff Rowe says:

    Editor’s Note: After this blog post was published I received some additional information from a reader, Darren Young of Southland Industries, regarding another relatively recent Autodesk acquisition that I was not aware of.

    “Most of those involved with manufacturing weren’t aware. It’s the AEC /Construction folks that were in the loop. This was about 3 years ago.

    What were formerly MAP Software Ltd’s products are now marketed as Autodesk’s “Fabrication” line of products for mechanical and electrical sub-contractors. Within this, is Fabrication CAMduct (formerly CAMduct or PM2000) which is a CAM solution for the HVAC sheet metal industry. It is used for HVAC sheet metal fabrication, and Cabinet Vision is for cabinet makers. The CAMduct software can and is used outside the HVAC Sheet metal industry, however, that’s really where its niche is.

    The CAM and estimating solutions all integrate with CAD. The CAM and estimating applications don’t really fit within Autodesk very well. CAM because it’s manufacturing specific for construction and the estimating because Autodesk has no domain knowledge of estimating.

    Trimble bought the main competitor Quick Pen (Pipe Designer 3d and Duct Designer 3d) prior to Autodesk’s acquisition.

    There’s actually a lot of competitors in this space, East Coast CADCAM, CAD Pipe, Benchmark, etc. All have a CAM component to them.”

  3. Ricky from MecSoft says:

    The industry is certainly changing and evolving quickly. You’re correct though, despite the large scale consolidation there are still a lot of products on the market. Good read!

  4. […] of CAx vendors. When I blogged specifically a couple months ago about the CAM segment entitled, “CAM Consolidation 2015: The Circle Continues To Get Smaller,” only one vendor challenged me that it was always independent and would remain so – SolidCAM. That […]

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