But with all that money being spent by Washington, at least the states in deep financial trouble here at home will get federal money to offset their own budget deficits, to improve crumbling infrastructure and to pay for homeland security, etc. Heck, Gray Davis might even get back the $9 billion that was illegally fleeced from California during the 2001-2002 power crisis! What did you say? No federal money for the states? And saywhat? Gray Davis has been replaced? But but Well, at least there will be more federal money for soldiers and veteran benefits, given their sacrifices. What? Such benefits as basic pay, combat pay, health care and the death gratuity are actually being cut? Incredible! Well, certainly corporate fraud has been severely punished and new regulations enforced, right? What's that about a corporate toga party in Sardinia? The Veep still collecting money from Halliburton, itself a winner of several recent no bid contracts for IRAQ? A new mutual funds scandal? Oh my! Women's rights to choose? Gun control? A Prescription Drug Bill? The environment? Don't even ask!
MCADCafé.com currently tracks the financial performance of multiple public companies in the Mechanical CAD market. Eight (8) companies were chosen for the author's May 8, 2003 Commentary. Four of these companies (Autodesk, Dassault Systemes, PTC and EDS PLM Solutions) represent approximately 85 percent of the total revenue in this grouping, and each of these four companies offers a wide array of software and services products across the entire design to manufacturing space. The remaining four public companies (ANSYS, Moldflow, MSC.Software and Tecnomatix) offer specialized software/services products in specific MCAD niches and together they create the remaining 15 percent of the total group-of-8's revenue. Indeed, these latter four companies frequently partner with the initial four to provide end-customers with broader solution suites.
For the author's August 11th Commentary in MCADCafi.com a ninth company, the ESI Group, was added. All nine were again studied here in November for comparison purposes.
The combined worldwide total annual revenue of these companies is nearly $4 billion, not an insignificant sum. But it is, in fact, less than 3 percent of the $150 billion spent annually on all types of software. So why study MCAD companies at all? The key to MCAD's importance lies in the leverage its users apply to create the everyday durable goods with which we are all familiar: automobiles, trucks, military gear & weapons, appliances, farm & construction equipment, aircraft & aerospace vehicles, etc. In short, MCAD is arguably responsible for enabling today's manufacturing industries, which are the centerpieces of creating real productivity and wealth in every modern economy.
Understanding the comparative MCAD revenue content of various vendors is not merely academic. For example, it helps observers better understand the likely future competitive MCAD strength of each vendor relative to its peers in such areas as amount of money available for R&D, for potential new acquisitions, for financial stability to weather economic cycles, and for other key business factors.
In comparing financial performances of the four largest MCAD companies tracked by MCADCafé.com, it's instructive to account for the actual MCAD content of each. For example, the revenues of Dassault and PTC can arguably be considered 100% MCAD in nature, whereas Autodesk's total revenue is only partially made up from its business in MCAD. Some Autodesk revenue (~15%) stems from its Discreet Segment, which provides systems and software for creating and animating imagery. Even in the remaining 85% of Autodesk's total revenue, derived from its Design Solutions Segment, is divided among solutions for Manufacturing, GIS, the building industry, and the platform technology group. Only the solutions of the Manufacturing Group (Inventor, AutoCAD Mechanical, Mechanical Desktop, Streamline, Point A, etc.) might be thought of as "pure" MCAD revenue.
EDS' MCAD revenues are created by EDS PLM Solutions, the mid-2001 union of SDRC and UGS. While EDS PLM Solutions represents less than five percent of EDS' total revenues ($21.5 billion in 2002), EDS PLM Solutions annual revenues are right there at similar levels as the world's other MCAD revenue leaders Dassault and PTC. For purposes of our discussion, we consider the revenues from the remaining public companies (ANSYS, ESI Group, Moldflow, MSC.Software and Tecnomatix) to be 100% MCAD.
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About the Authors
Since 1996, Dr. Russ Henke has been president of HENKE ASSOCIATES, a San Francisco Bay Area high-tech business & management consulting firm. During his corporate career, Henke operated on "both sides" of MCAD and EDA, as a user and as a vendor. He's a veteran corporate executive from Cincinnati Milacron, SDRC, Schlumberger Applicon, Gould Electronics, ATP, and Mentor Graphics. Henke is a Fellow of the Society of Manufacturing Engineers (SME) and currently serves on the SME International Board of Directors. He is also a member of the IEEE and a Fellow of ASME International. An affiliate of the HENKE ASSOCIATES team since 2001, LA-based Dr. John R. (Jack) Horgan co-authored this article. Jack's career included Applicon, Aries Technology, CADAM, MicroCadam and IBM. Further information on HENKE ASSOCIATES is available at http://www.henkeassociates.net.