MCAD/MCAE Industry View – A November 2010 Update
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MCAD/MCAE Industry View – A November 2010 Update

Commentary: MCAD/MCAE Industry View - A November 2010 Update

by Dr. Russ Henke
Henke Associates


This November 2010 issue of the MCAD/MCAE Industry Commentary recounts the financial performances of a selected group-of-five MCAD/PLM/MCAE vendors (G5) for the nominal Third Quarter of calendar 2010.

In the first MCAD Industry Commentary published May 2003 in MCADCafé.com, then-recent yearly and quarterly financial performances of a selected group of public Mechanical Computer Aided Design (MCAD) and Mechanical Computer Aided Engineering (MCAE) vendor companies were analyzed and compared. Expectations of future financial performances of these same entities were documented.

The May 2003 MCAD Commentary was followed by twenty-nine (29) quarterly updates in MCADCafé.com, one for each subsequent calendar quarter. URL's on all past articles are available. The entities initially covered were ANSYS, Autodesk, Dassault Systèmes, UGS PLM, ESI Group, Moldflow, MSC.Software, PTC and Tecnomatix.

As a result of the acquisition of Tecnomatix by UGS that closed April 1, 2005, Tecnomatix was eliminated from coverage thereafter as a separate entity.

On May 7, 2007 UGS announced the close of its acquisition by Siemens AG effective May 4. Thereafter, the business went to market as UGS PLM Software (and later as Siemens PLM Software), a global division of the Siemens Automation and Drives (A&D) Group. Over the years UGS itself had bounced back and forth between being a public company and a private company under different ownerships. Regrettably, we have been able to gain very little insight into UGS' financial performance itself from public Siemens' corporate reports after the Siemens acquisition. Occasionally we will include Siemens PLM Software news items that bear on the industry as a whole.

Then on June 25, 2008 Autodesk completed its acquisition of Moldflow Corporation, so thereafter Moldflow was eliminated here from separate coverage.

On July 07, 2009 MSC.Software announced that it had entered into a definitive agreement with affiliates of Symphony Technology Group (STG) under which a company controlled by STG would acquire all of MSC's outstanding shares in a one-step cash merger transaction. This acquisition of MSC.Software by STG was finally consummated on October 14, 2009. No financial results for MSC.Software were published for Q3 2009, and none since. Unless and until such data are subsequently made available, MSC.Software has been dropped from coverage herein, although occasionally MSC.Software news items that bear on the industry as a whole will be mentioned.

Henke Associates recognizes that some MCAD/PLM/MCAE vendors have expanded their offerings into the world of “multi-physics” by moving beyond pure MCAD into other disciplines, such as fluid dynamics and electronic analysis (e.g. ANSYS). This Commentary will also report on these new areas as appropriate. (The EDA WEEKLY posted on on July 19, 2010, entitled, “ANSYS turns 40!” dealt with ANSYS multi-physics, and it is available in the EDA WEEKLY archives).

This thirty-first MCAD/MCAE Industry article in the sequel recounts mainly the financial performances of the remaining group-of-five (G5) MCAD/PLM/MCAE entities for the nominal third quarter of calendar 2010:

The release of the MCAD/MCAE Commentary each quarter is driven by the release date of quarterly financials of the last G5 vendor reporting. This Quarter it was Autodesk, which released its results on November 18, 2010.

The following is divided into two (2) basic sections, the first of which discusses the “G5 financial results for the nominal Third Quarter of Calendar 2010,” and the second section covers “Recent MCAD/MCAE News Highlights.”

Near the very end of this quarter's MCAD Commentary is an Economic and Political Editorial.


G5 MCAD/MCAE Vendors' Financials in Q3 2010



Measured in $US except where indicated, Table 1 above reveals that the combined total revenue of the G5 was $1427.7 million in Nominal Q3 2010, a figure which was a mere 4.6% above the combined G5 total of $1364.8 million in sequential Q2 2010, but it was over 16% better year over year than the Q3 2009 total G5 revenue total of $1229 million. Indeed, the quarterly G5 revenue averaged only $1257 per quarter in 2009.

As a gauge of how Bush 43's second recession has impacted the MCAD industry, the G5 would have to have a Q4 2010 of $1820 million for the total revenue for the year 2010 to equal the annual revenue achieved in 2008. So it will most likely be still another year (2011) before 2008 is matched or exceeded in terms of G5 total annual revenue.

Table 1 also shows that ANSYS' revenue curve “is sloped positively, i.e. upward and to the right,” but the slope is very modest over the last three quarters. However, the Q310 revenue was 9.1% better year over year than Q309, but only PTC's Q310/Q309 percentage was lower, at 8.8 %. Note that Dassault (DS) did the heavy lifting in Q3 2010, providing Q3 2010 revenue that was 24.8% better year over year than Q3 2009, measured in US$.

Like ANSYS' three consecutive quarters of relative revenue flatness, for the first three quarters this year Autodesk's revenue (~3.4 times larger than ANSYS' revenue) is also almost flat (averaging $475 million/quarter). Still, the 9-month Autodesk 2010 YTD total of $1424.1 million in revenue is 13.2% better than the similar 9-month Autodesk period last year.

Turning to earnings in Table 2, the same four vendors whose profits ($168.2 million) were $92 million in total better year over year in Q2 2010 vs. Q2 2009, alas delivered only $146.3 million in total earnings in Q3 2010, down $21.9 million from sequential Q2 2010, and a miserly plus $15.5 million over the G4's total earnings in Q3 2009.

By going into the red some $13.22 million and delivering over $29 million fewer dollars this year in Q3 compared to last year, PTC was mostly responsible for the lion's share of the reduced total Q3 2010 G4 earnings performance, owing in part to PTC management's decision in Q310 to reward employees whose base pay had been frozen for two years.

Still, $146.3 million in earnings on revenues of $1405.46 million for the G4 reporting earnings, nevertheless yields a fairly healthy 10.41% collective ROS in Q310, though not as strong as Q2 2010's 12.6% ROS for the same G4.

Autodesk's earnings, while still very positive, fell sequentially $6.4 million in Q3 2010 vs. Q2 2010.


Individual G5 Vendors' Q3 2010 Performances

On November 04, 2010 ANSYS, Inc. (NASDAQ: ANSS) announced third calendar quarter 2010 results with total revenue of $139.8 million, up 9.1% year-over-year as compared to $128.2 million in Q3 2009, but up “only” $2.0 million or +1.4 % compared to sequential Q2 2010 revenue of $137.8 million. However, year-to-date nine-months revenue is up a respectable 12.9% to $413.7 million compared to $366.5 million for the first nine months of 2009. The revenue of $139.8 million for Q3 2010 was just above the middle of the guidance range of $137 million to $142 million provided 3 months ago.

Commenting on the Company's third quarter 2010 performance, Jim Cashman, ANSYS president & CEO stated, "Our Q3 performance reflects our resiliency despite pockets of customer confidence issues regarding the macro-environment. We continue to see healthy growth in our paid-up license and maintenance bases, as well as across our major product lines. We have a strong balance sheet, record cash flows, solid fundamentals and a disciplined team that continues to execute. Our operating performance is a testimony to our belief that engineering simulation solutions remain a high priority for our expanding customer base. The business pressures on our customers to deliver innovative, high-quality products to market with fewer resources are intense. With the upcoming release of ANSYS® 13.0, our product portfolio is robust and we believe we are well-positioned to deliver long-term value to our customers and stockholders."

ANSYS also reported GAAP net income of $36.1 million in the third quarter of 2010, plus 18.4% as compared to $30.5 million in the third quarter of 2009; and GAAP net income of $ 35.5 million in sequential Q2 2010, up only 1.7% sequentially. However, GAAP net income was $104.0 million in the first nine months of 2010 as compared to $78.8 million in the first nine months of 2009, a healthy nine months' YTD percentage of plus 32%.

As a result, GAAP diluted earnings per share were $0.39 in the third quarter of 2010 as compared to $0.33 in the third quarter of 2009, and to $0.38 in sequential Q2 2010. GAAP diluted earnings per share was $1.12 in the first nine months of 2010 as compared to $0.86 in the first nine months of 2009. The $0.39 EPS in Q3 2010 was 2 cents above the top of the $0.34 to $0.37 guidance range provided three months ago.

Commentary Concerning Impact of Subsidiary Merger Activities

To improve the effectiveness of the Company's operations in Japan, during the third quarter of 2010, the Company completed the merger of its Japan subsidiaries. The income tax effect of this merger transaction is expected to have a significant impact on the Company's net income, diluted earnings per share and cash flows in future periods.

During the third quarter of 2010, the Company's operating cash flow was increased by approximately $11 million related to a reduction in income taxes paid. The merger transaction did not impact the Company's net income or diluted earnings per share in the third quarter of 2010.

The Company expects the merger transaction to impact its cash flows, net income and earnings per share as follows:

Fourth Quarter 2010 Cash Flow: Negative impact of $58 to $63 million
Fourth Quarter 2010 Net Income: Positive impact of $1.9 - $2.0 million
Fourth Quarter 2010 Diluted EPS: Positive impact of $0.02

2011 Cash Flow: Positive impact of $38 to $42 million
2011 Net Income: Positive impact of $7 to $8 million
2011 Diluted EPS: Positive impact of $0.07 to $0.08

The Company also expects that this transaction will positively impact cash flows and net income in 2012 - 2015.

Management's Remaining 2010 and Preliminary 2011 Financial Outlook

The Company is providing its 2010 revenue and earnings per share guidance below, as well as its preliminary outlook for 2011.

Fourth Quarter 2010 Guidance

The Company currently expects the following for the quarter ending December 31, 2010:

Fiscal Year 2010 Guidance

The Company currently expects the following for the fiscal year ending December 31, 2010:

Fiscal Year 2011 Preliminary Outlook

The Company currently expects the following for the fiscal year ending December 31, 2011:

These statements are forward-looking and actual results may differ materially.

ANSS    11/24/10 CLOSE = $ 48.99       MKT CAP = $4.45 B
NASDAQ   11/24/10 CLOSE = $2543.12


ANSYS, Inc. self-description

ANSYS, Inc., founded in 1970, develops and globally markets engineering simulation software and technologies widely used by engineers, designers, researchers and students across a broad spectrum of industries and academia. The Company focuses on the development of open and flexible solutions that enable users to analyze designs directly on the desktop, providing a common platform for fast, efficient and cost-conscious product development, from design concept to final-stage testing and validation. The Company and its global network of channel partners provide sales, support and training for customers. Headquartered in Canonsburg, Pennsylvania, U.S.A., with more than 60 strategic sales locations throughout the world, ANSYS, Inc. and its subsidiaries employ over 1,600 people and distribute ANSYS products through a network of channel partners in over 40 countries. Visit for more information.

On November 18, 2010 Autodesk, Inc. (NASDAQ:ADSK) reported financial results for its third quarter of fiscal 2011, aka nominal Q3 2010 for purposes of this MCAD/MCAE Commentary for November 2010.

Autodesk revenue growth in the quarter was said to be well balanced with all top countries growing year-over-year. Going forward, the company is said to be optimistic about its ability to grow revenue and profitability, though it continues to be pragmatic about the pace of the global macroeconomic recovery.

“We are pleased with our third quarter results, which reflect the solid progress we have achieved over the past year in driving revenue growth and improving profitability,"
said Carl Bass, Autodesk president and CEO. “We saw particular strength in our manufacturing business, which experienced strong demand on a global basis. We also delivered double digit year-over-year revenue growth in each of our geographies. Strong revenue coupled with tight cost controls led to a significant year-over-year improvement in profitability. Our relentless attention to building and selling great products allows us to serve our customers well and capitalize on a $14 billion market opportunity.”

“As a result of strong revenue growth and a focus on cost controls, for the year we expect to deliver significant improvement in key financial metrics, including revenue, operating margin, EPS, and cash flow from operating activities,”
said Mark Hawkins, Autodesk Executive Vice President, Chief Financial Officer. “Our revenue growth in the third quarter was well balanced with all of our top countries growing year-over-year. Going forward, we are optimistic about our ability to grow revenue and profitability, though we continue to be pragmatic about the pace of the global macroeconomic recovery.” (Hawkins joined Autodesk in April 2009).

Operational Overview

EMEA (Europe, Middle East, and Africa) revenue was $183 million and increased 15% compared to the third quarter last year. EMEA revenue decreased 3% sequentially.

Revenue in the Americas was $179 million and increased 10% compared to the third quarter last year and 7% sequentially.

Revenue in Asia Pacific was $115 million and increased 22% compared to the third quarter last year. Revenue in Asia Pacific decreased 1% sequentially.

Revenue from emerging economies was $76 million, an increase of 23% compared to the third quarter last year. Revenue from emerging economies increased 7% sequentially. Revenue from emerging economies represented 16% of total revenue in the third quarter.

Revenue from the Platform Solutions and Emerging Business segment was $174 million, an increase of 12% compared to the third quarter last year and a decrease of 2% sequentially. Revenue from the Architecture, Engineering and Construction business segment was $136 million, an increase of 9% compared to the third quarter last year and 3% sequentially. Revenue from the Manufacturing business segment was $117 million, an increase of 30% compared to the third quarter last year and 4% sequentially. Revenue from the Media and Entertainment business segment was $50 million, an increase of 5% compared to the third quarter last year and 2% sequentially.

Cash flow from operating activities was $114 million, compared to $47 million in the third quarter last year, and $112 million in the second quarter of 2010. Autodesk's cash and investments balance at the end of the third quarter was over $1.3 billion.

Business Outlook

The following statements are forward-looking statements that are based on current expectations and assumptions, and involve risks and uncertainties some of which are set forth below.

Nominal 2010 Full Year

Net revenue for current full year is expected to increase by 12 to 13% compared to nominal 2009 and be in the range of $1.924 billion and $1.944 billion. GAAP earnings per diluted share are expected to increase more than 230% compared to nominal 2009 and be in the range of $0.83 and $0.86.

Autodesk anticipates GAAP operating margin for nominal 2011 to increase between 950 and 990 basis points for full year nominal 2011 compared to this year.

Nominal Fourth Quarter 2010

Net revenue for the next quarter is expected to be in the range of $500 million and $520 million. GAAP earnings per diluted share are expected to be in the range of $0.19 and $0.22.

Fourth quarter outlook assumes an effective tax rate of 25% for GAAP results.



As of press time for this issue of the MCAD/MCAE Commentary, Autodesk aficionados are already aware of the huge number of activities (and people) that are about to descend on Nevada from November 30 through December 2, 2010. The annual Autodesk University has ballooned into a massive learning and networking soirée in Las Vegas this year. It features three days of classes, hands-on labs, and keynote speeches presented by well known professionals, industry leaders, and Autodesk executives, plus the latest technology and services from what has now become yearly the world’s largest gathering of Autodesk developers and strategic partners. Autodesk management hopes that again this year, “What’s learned in Vegas, does not stay in Vegas.”


ADSK    11/24/10 CLOSE = $ 35.43      MKT CAP = $8.04 B

NASDAQ   11/24/10 CLOSE = $2543.12

Autodesk self description

Autodesk, Inc. is a leader in 3D design, engineering and entertainment software. Customers across the manufacturing, architecture, building, construction, and media and entertainment industries - including the last 15 Academy Award winners for Best Visual Effects - use Autodesk software to design, visualize, and simulate their ideas. Since its introduction of AutoCAD software in 1982, Autodesk continues to develop the broadest portfolio of state-of-the-art software for global markets. For additional information about Autodesk, visit Autodesk and AutoCAD are registered trademarks or trademarks of Autodesk, Inc., and/or its subsidiaries and/or affiliates in the USA and/or other countries. Academy Award is a registered trademark of the Academy of Motion Picture Arts and Sciences. All other brand names, product names, or trademarks belong to their respective holders. Autodesk reserves the right to alter product and service offerings, and specifications and pricing at any time without notice, and is not responsible for typographical or graphical errors that may appear in this document. © 2010 Autodesk, Inc. All rights reserved.

On October 28, 2010 Dassault Systèmes (DS) (Euronext Paris: #13065, DSY.PA) reported IFRS [1] unaudited financial results for the third quarter ended September 30, 2010.

Financial Highlights

Third Quarter 2010 revenues were 403.6 million Euros, compared to 385.6 million Euros in sequential Q2 2010, and 291.7 Euros year over year in Q3 2009. Using average exchange rates appropriate to each quarter, this corresponds to $520.64 million in Q3 2010 revenues, $490.8 million in sequential Q2 2010, and $417.13 million in year over year Q3 2009.

Revenues in the Americas in Q3 2010 were up 30.8% year over year, Europe +28.3%, and Asia + 68.6%.

Third Quarter 2010 net income was 55.4 million Euros vs. sequential net income of 48.7 million Euros in Q2 2010, and vs. 38.4 million Euros in Q3 2009. Using average exchange rates appropriate to each quarter, this corresponds to $69.0 million in Q3 2010 earnings, $61.98 million in sequential Q2 2010, and $54.9 million in year over year Q3 2009.

“Dassault Systèmes delivered a powerhouse third quarter thanks to important contributions from all of our brands and superb execution from every organizational unit in DS and among our sales partners around the globe. We were very pleased by both the level of new software sales and the growth of our recurring software revenue,
commented Bernard Charlès, Dassault Systèmes President and Chief Executive Officer. “Given the backdrop of a still fragile economic recovery, this performance demonstrates the value of our industry solutions for our customers. We continued to gain important new references for our Version 6 global collaborative platform, amongst the most recent of which was Bell Helicopter's decision to select ENOVIA V6 and expand the usage of our products to include SIMULIA, DELMIA and 3DVIA and to upgrade to CATIA V6.”

Business Outlook

Thibault de Tersant
, Senior Executive Vice President and CFO, commented, “DS delivered a strong third quarter, with total revenue, operating margin and earnings per share coming in ahead of our expectations. Both new licenses revenue and recurring software revenue contributed to the strength of the software results, growing, respectively, 54% and 32% in constant currencies. We benefited from strong growth in all geographic regions, an important level of contribution from our industry diversification and a good dynamic in our core industries. Turning to our financial objectives for the fourth quarter and year, first, we are reconfirming and leaving unchanged our fourth quarter objectives which had already incorporated our assumption of an acceleration of revenue growth during the second half of 2010. Secondly, we are increasing our 2010 financial objectives to reflect the full third quarter revenue over-performance of €25 million in constant currencies. Therefore, with respect to our 2010 financial objectives, we are raising our revenue growth target range by two points to 18% to 19% in constant currencies, increasing our operating margin target range an additional 100 basis points to 27% to 28% and raising our earnings per share growth objective about five points to 26% to 32% growth.”

The total DS headcount at the end of Q3 2010 was 8892 vs. a headcount of 7812 one year ago.

Note: DS completed the acquisition of the IBM PLM operations on March 31, 2010 and these operations were merged into the Company's operations within its PLM business segment for the six-month period commencing April 1, 2010. Due to the deep integration of former IBM PLM employees into the Company's operations, involving many changes in sales territories and responsibilities, it is not possible to track the IBM PLM revenue and profit since the acquisition date. As previously disclosed, the IBM PLM share of DS software revenue was estimated at approximately €45 million in the 2009 third quarter.

DASTY.PK    11/24/10 CLOSE = $ 71.93       MKT CAP = $8.38 B

NASDAQ   11/24/10 CLOSE = $2543.12


Dassault Systèmes self description

As a world leader in 3D and Product Lifecycle Management (PLM) solutions, Dassault Systèmes brings value to more than 115,000 customers in 80 countries. A pioneer in the 3D software market since 1981, Dassault Systèmes develops and markets PLM application software and services that support industrial processes and provide a 3D vision of the entire lifecycle of products from conception to maintenance to recycling. The Dassault Systèmes portfolio consists of CATIA for virtual product design - SolidWorks 3D for Professionals - DELMIA for virtual production - SIMULIA for realistic simulation - ENOVIA for global collaborative lifecycle management, and 3DVIA for online 3D lifelike experiences. Dassault Systèmes' shares are listed on Euronext Paris (#13065, DSY.PA) and Dassault Systèmes' ADRs may be traded on the US Over-The-Counter (OTC) market (DASTY). For more information, visit

CATIA, DELMIA, ENOVIA, SIMULIA, SolidWorks and 3DVIA are registered trademarks of Dassault Systèmes or its subsidiaries in the US and/or other countries.

On September 29, 2010 ESI GROUP (Compartment C of NYSE Euronext Paris) reported financial results for the first half of its 2010/2011 fiscal year, the period ending July 31, 2010. The following chart comes directly from the ESI Group news release:

Since we knew the nominal Q2 2010 sales for the period ending April 30, 2010 from the last MCAD/MCAE Commentary in August 2010, we can deduce the ESI sales for nominal Q3 2010 (the quarter ending July 31, 2010). The nominal Q3 2010 sales are first half 33.3 million Euros minus Q2 2010 15.9 million Euros = 17.4 million Euros. Using the calculated average exchange rate for the period in question, 17.4 million Euros is $22.24 million.

Likewise nominal Q3 2009 sales are 31.2 million Euros minus 16.4 million = 14.8 million Euros. Using the calculated average exchange rate for the period in question, 14.8 million Euros is $20.67 million.

Because ESI Group profitability or loss is reported only by half year increments, and because to date the numbers have been small, the practice of omitting ESI quarterly earnings/losses in G5 totals (e.g. Table 2) will continue.

Alain de Rouvray
, ESI Group's Chairman and CEO, comments: “The substantial interest shown by our key accounts in our Virtual Prototyping strategic innovations is resulting in the growing success of our solutions, particularly visible on the second quarter. Simultaneously, keeping our cost structure under control, which is at the heart of our concerns, has resulted in an improvement in the gross margin and has curbed our operating costs excluding one-offs and currency effects. These trends confirm our expectations that business and results will continue to improve this financial year.”

Commenting on the ESI Group half-year results through July 31, 2010, Rouvray painted a picture of gradual improvement, “As announced on 14th September 2010, first-half sales totaled 33.3 million euros, giving a purely organic growth of +6.8% in actual terms and +2.2% by volume. This improvement is a result of the acceleration in the growth of Licenses (+10.5% in real terms over the half, +23.3% over the second quarter). Subsequently, the product mix has evolved in favor of this activity, as Licenses accounted for 69% of first-half sales compared to 66% for the first half of 2009/10.

The gross margin came to 64.9% of sales, versus 61.6% over the first half of 2009/10. This substantial increase was due to the change in the product mix and the improvement in the profitability of Licenses activity, which benefited from the optimization of distribution and support costs. Services activity remained stable, impacted by the downturn in the situation in the Americas.

Mirroring the improvement in the Group's economic performance, the EBITDA margin was up by +1.6 percentage points, at -6.8% over the first half of this year versus -8.4% over the first half of 2009/10.

The Company's financial situation remains sound. The Group had available cash of 10.6 million euros at 31st July 2010.

License activity improved significantly, in terms of sales growth and gross margin. A more favorable market context has led to a higher level of repeat business from the installed base (86%), with key clients increasingly willing to choose ESI's integrated solutions.

New License Business was up sharply over the first two quarters of the year, increasing by a total of +32.7% over the first half. This reflects the intensification of our sales efforts, with new clients coming onboard and existing clients purchasing new products. New Business is also feeding (our) business sectors' diversification, with clients from the Transportation, Aerospace, Machinery and Education sectors for example.

Providing technical support to ESI's French and German subsidiaries, our new Tunisian nearshore production center has been strengthened via the creation of a new division dedicated to Automotive Powertrain technology. This new division reflects the convergence of the expertise and know-how of ESI's Tunisian teams and the high demands of the Group's clients in terms of technicality, quality and costs.”

ESI.PA   11/24/10 CLOSE =  10.31 EURO       MKT CAP = N/A

NASDAQ   11/24/10 CLOSE = $2543.12


ESI self description

ESI is a pioneer and world-leading player in virtual prototyping that take into account the physics of materials. ESI has developed an extensive suite of coherent, industry-oriented applications to realistically simulate a product's behavior during testing, to fine-tune manufacturing processes in accordance with desired product performance, and to evaluate the environment's impact on product performance. This offer represents a unique collaborative and open environment for Simulation-Based Design, enabling virtual prototypes to be improved in a continuous and collaborative manner while eliminating the need for physical prototypes during product development. Present in over 30 countries, ESI employs over 750 high-level specialists throughout its worldwide network. ESI Group is listed on compartment C of NYSE Euronext Paris. For further information, go to


On October 26, 2010 PTC (NASDAQ: PMTC) reported results for its fiscal year end and for its fourth fiscal quarter (equivalent to calendar Q3 2010), both ending September 30, 2010.

Revenue for calendar Q3 2010 was $268 million, up 10.3% compared to sequential calendar Q2 2010 revenue of $243 million, but up only 8.8% year over year compared to calendar Q3 2009 revenue of $246 million.

GAAP net income for calendar Q3 2010 was minus $13.21 million for an EPS of ($0.11). This compares to plus $15.9 million net income in calendar Q3 2009 for an EPS of $0.13. GAAP net income was plus $10.72 million in the just prior calendar Q2 2010.

Highlights for Calendar Q3 2010

Results Commentary

James Heppelmann
, now president and chief executive officer, commented, "Calendar Q3 was another solid quarter for PTC with total revenue up 9% year-over-year and license revenue up 26%. Importantly, our services and maintenance revenues were up on a year-over-year basis for the first time since calendar Q1'09. Our PLM license revenue in calendar Q3 2010 was $44.3 million, up 27% year-over-year, continuing to highlight our leadership position in a large and growing segment of the enterprise software market. Our CAD license revenue was $44.7 million, up 25% year-over-year, with growth in every region." On a constant currency basis, total calendar Q3 2010 revenue was up 11% and license revenue was up 27% compared to the year ago period.

"Our continued revenue momentum in the PLM market is further bolstered by an additional three strategically-important 'domino' account wins during calendar Q3 2010 and another one completed early in calendar Q4 2010," Heppelmann continued. "Since 2009, we have won 19 domino accounts, all of which are large multinational companies who have chosen to standardize their PLM initiatives on our Windchill platform. Dominoes represent the largest of many competitive displacement opportunities, and we believe they are a clear indicator of our momentum in the PLM market. They also demonstrate that PTC is gaining share and becoming recognized as the industry leader for both our technology and product development process expertise. We are further engaged in more than 250 other opportunities world-wide with companies that are looking to replace their existing PLM solution to help improve their competitive position in their own markets."

Heppelmann added, "Our pipeline for new business opportunities with new and existing customers remains strong. During the quarter we recognized revenue from leading organizations such as Bombardier, Bosch, Deere & Company, NASA, Raytheon, Steelcase, the US Army, the US Navy, and Whirlpool."

Jeff Glidden
, chief financial officer, commented, "From a profitability standpoint, while we outperformed our revenue targets, our EPS result was (nevertheless) in line with our original guidance due to higher incentive compensation expense. As a result of our over-performance, we elected to provide a profit sharing bonus to our employees, who have not received a merit increase in two years given the belt tightening we did as a result of the macro-economic environment."

"We ended the third calendar quarter of 2010 with $240 million of cash," continued Glidden. "During calendar Q3 2010 we repurchased $2 million worth of our stock. Additionally, we resolved the litigation with GE Japan, which resulted in a GAAP benefit of $9 million to other income in calendar Q3 2010; this resolution will reduce our cash balance by approximately $48 million in calendar Q4 2010. Our non-GAAP tax rate was lower than expected during the quarter as a result of lower than expected taxes in several foreign jurisdictions. Additionally, we completed a business realignment initiative during the quarter, primarily in Europe, to simplify our corporate structure for tax efficient cash repatriation. This realignment resulted in a significant non-cash GAAP tax rate increase in calendar Q3 2010."

Total PTC headcount was 5,317 as of September 30, 2010, up slightly from 5,289 as of June 30, 2010.

Outlook Commentary

"Based on the market momentum we are seeing, the strength of our pipeline, our increased sales capacity, many important product initiatives, including the launches of Windchill 10 and Project Lightning [aka Creo], as well as the significant interest we are seeing in other products such as Arbortext, Relex and InSight, we continue to be excited about our long-term growth opportunity," said Heppelmann. "Given our 25% year-over-year non-GAAP EPS growth in FY'10 (calendar October 2009 to September 2010) and our expected 20% to 25% year-over-year non-GAAP EPS growth in FY'11 (calendar October 2010 to September 2011), we remain confident and committed to achieving our goal of a 20% non-GAAP EPS CAGR through 2014." (GAAP figures were not given here).

"Looking to FY'11, we are targeting 10% to 12% revenue growth and 20% to 25% non-GAAP EPS growth," said Glidden. "We are expecting license revenue growth of approximately 20% to 25%, services revenue growth of approximately 10% and maintenance revenue growth of approximately 5%. The currency (exchange) assumption embedded in our guidance is $1.37 USD/EURO. We are also establishing a target of having won 30 domino accounts by the end of FY'11 (i.e. end of September 2011), up from 19 currently."

Glidden continued, "We are expecting non-GAAP operating margin of approximately 17% to 18%. We intend to continue to invest prudently in our business to leverage our technology leadership position and capitalize on our long-term growth opportunity." For FY'11, the GAAP operating margin target is 11% to 12% and the GAAP EPS target is $0.75 to $0.80.

The FY'11 targets assume a non-GAAP tax rate of 25%, a GAAP tax rate of 25% and 121 million diluted shares outstanding. The FY'11 non-GAAP guidance excludes approximately $43.3 million of stock-based compensation expense, $28.2 million of acquisition-related intangible asset amortization and their related income tax effects.

"For calendar Q42010 we are initiating guidance of $255 to $265 million in revenue with non-GAAP EPS of $0.22 to $0.26," Glidden added. "We are expecting approximately flat to low single digit year-over-year growth in our license revenue in the quarter, with our combined services and maintenance businesses essentially flat resulting in flat to low single-digit year-over-year growth in total revenue." The calendar Q4 2010 GAAP EPS target is $0.11 - $0.15.

The calendar Q4 2010 guidance assumes a non-GAAP tax rate of 25%, a GAAP tax rate of 25% and 121 million diluted shares outstanding. The calendar Q4 2010 non-GAAP guidance excludes approximately $11.0 million of stock-based compensation expense, $7.3 million of acquisition-related intangible asset amortization expense and their related income tax effects.

PMTC    11/24/10 CLOSE = $ 21.84       MKT CAP = $2.50 B

NASDAQ   11/24/10 CLOSE = $2543.12

PTC self-description:

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Recent MCAD/MCAE News Highlights


ANSYS posted this article from “NASA Tech Briefs”

Industry Update: Analysis & Simulation Software
Monday, November 01, 2010

In our annual poll of executives at leading analysis and simulation software companies, we asked about (1) the economic situation's effect on the market, (2) the pros and cons of virtual prototyping, and (3) how software vendors are helping customers do more with less. Here's what they had to say about market trends for 2011, and maintaining competitive advantages in a challenging business market.

Doing More With Less



Last year, the executives we polled discussed the challenging economic environment and how their customers were being forced to do more with less, including a reduced staff of analysts and qualified simulation experts. But today, while the economy is still struggling, companies are using more simulation and it is being performed by both experts and designers/engineers.

Engineers have historically been expert in a specific area of simulation. They would run one case at a time with time available to double-check their work,” said Mike Peery, president and CEO of Tecplot. “Today, simulations are being run more and more by generalists - the engineers who are a direct part of the design process - and they are tasked with doing many things.” As a result, added Peery, the easier the software is to use, the better. “We worked to make our tool easy to learn and apply. After all, specialists appreciate fast learning curves as much as any professional with a heavy workload.”

Jim Spann, vice president of marketing for Blue Ridge Numerics, agrees that experts and “generalists” are collaborating more to produce more and faster simulations. “Experienced analysts are taking advantage of new collaboration and customization tools that allow them to share knowledge, participate in design reviews, and build templates for use by design engineers. This removes a lot of the learning curve for the designer and helps ensure every simulation follows pre-defined guidelines that will yield consistent results.”

This broader community of simulation users also has benefits for managers. “The economic situation has focused organizations on several needs, including not only efficiency, but on their competitive situation,” said Dale Berry, director of technical marketing for Dassault Systèmes SIMULIA. “What we see is not that designers are taking up analysis tasks instead of dedicated analysts. Rather, designers are now being asked to leverage and re-use methods previously developed and validated by expert groups.” As a result, said Berry, “The work is not shifting to designers from analysts, but is expanding as designers discover the value of the experts' methods.”

“Innovation is enabled by using simulation up-front in conceptual analysis and design, as well as by broadening the user community beyond a core group of specialized analysts,” added Dipankar Choudhury, vice president of corporate product strategy and planning for ANSYS. “As the simulation community expands, there is a continued need for experts who understand deep, comprehensive physics concepts and how to best deploy the simulation tools to a broader base. At the same time,” Choudhury explained, “not every user will require the same level of technology because he or she may not have the need to model complex physics.”

So while the simulation user base is expanding and evolving, so is the software. According to Bruce Klimpke, technical director of Integrated Engineering Software, “There is a trend by senior R&D managers to acquire software that the design engineer can learn quickly. This requires the results of the simulation to match reality with very little room for error. This is especially true in organizations where simulation results are followed by production.” While the current economy is speeding up this trend, said Klimpke, it is the natural evolution of simulation software.

This evolution means there are more diverse users of simulation and analysis software, which should, in turn, help both the software vendors and their customers. “The primary effect of the current economy is on the amount of simulation being done,” said David L. Vaughn, vice president of worldwide marketing for CD-adapco. “It seems everyone has realized that simulation is the key to reducing product development costs by reducing or eliminating physical prototyping and testing.”

“Over the past several years, managers looking to streamline workflows and engineers interested in quicker turnaround for results have moved from dedicated environments for simulation and analysis to their desktop,” said Jon Friedman, aerospace and defense industry manager at The MathWorks. “Engineers visualize and analyze data, develop algorithms, and share results, allowing the industry to adapt to changes in both the economy and market needs.”

Dave Weinberg, president and CEO of NEi Software, continues to see new users of finite element analysis software from a diverse group, including those involved in the earliest stages of product design. “We offer several ways to support engineers who are new to using simulation or analysis tools. Although engineers may have different requirements to ramp up on the solution, they generally seek training and some degree of mentoring.”

Bill Chown, product line director of the system modeling and analysis division at Mentor Graphics, agrees that multi-disciplinary engineering is increasing. “Where organizations traditionally had dedicated simulation departments, today's designs can't wait for such departments to turn simulation predictions. The need for concurrent-based simulation by staff engineers is critical.”

Added Svante Littmarck, president and CEO of COMSOL, “I don't see design engineers replacing dedicated analysts in our market. If the current economy has changed anything, I'd say analysis is more popular than ever before.”

Pros and Cons of Virtual Prototyping

As both simulation software and the computers it runs on become more sophisticated, virtual prototyping also becomes more widespread. Explained Choudhury, “As engineering simulation progresses, we're seeing the definition of virtual prototyping take on a new and expanded meaning. Where once it meant using engineering simulation to study the behavior of an individual component, it now means testing the entire system-notjustapieceofit-in the environment in which it will operate to reach an optimal design.” Such an approach, he added, involves more than engineering software - the computer hardware must advance at the same pace.

Chown explained that a virtual prototyping infrastructure, in which models from different domains can be integrated at each stage of the design lifecycle, allows system integration issues to be identified and addressed earlier in the process. “During the verification phase of the design, simulation can again be employed to verify intended system operation. It is a common mistake to completely design a system and then attempt to use simulation to verify whether or not it will work correctly,” Chown said. “Simulation should be considered an integral part of the entire design phase and continue well into the manufacturing phase.”

An advantage to virtual prototyping is that by identifying repetitive simulation methods, organizations can realize substantial return on their simulation software investment. “Unlike machine tools, simulation methods never wear out. So once developed, the ROI continues to grow with time,” said Berry. “That's the true value of virtual prototyping.”

Added Klimpke, “If you are designing lower-cost products, it may well be easier to just build and test. But you still lose a lot of design insight that only simulation can give you. You can't see temperature distribution in a part until you simulate it.”

But the benefits of virtual prototyping are tempered by the need for real-world physical prototypes. “While the value of complete virtual prototyping is dependent on the situation, we, as an industry, are approaching a level of capability that will allow a consensus in favor of complete virtual prototyping,” according to Vaughn. “I do want to be cautious in the use of this terminology, because at the same time, I also believe that only in very few instances can physical testing be eliminated.” [Insertion by the MCAD Commentary writer, former president & COO of SDRC 1969 - 1982, “This is the same debate that we at SDRC used to have with customers in the 60's and 70's. Our conclusion then: there's a place for both computer analysis and physical testing; we built our entire SDRC business on that principle. Still true!”].


“It depends on what you're doing. Any product that's either very expensive to manufacture or to operate, and is sensitive to small variations in design, is a great candidate for virtual prototyping,” according to Peery. “Another limitation is accuracy. There are cases where the physics are not well modeled by the equations solved in the simulation.”

“The benefits of virtual prototyping can reduce field product failure risk and test multiple scenarios that reduce the number of prototypes needed to validate designs,” stated Weinberg. However, he added, “Virtual prototyping cannot negate the need for a physical prototype that can reveal design flaws that were not observed in the virtual environment.”

Friedman agrees that organizations must carefully weigh risk and benefit when looking at complete virtual prototyping. “There is no single, hard rule that can be applied. Engineers must always ask themselves what testing can move up front to the virtual world, and where the dimensioning returns for the efforts are.” At some point, Friedman cautioned, “a physical prototype is needed to perform final system-level testing, because no one wants to fly in a plane that hasn't been tested as a physical prototype.”

Trends for 2011

While virtual prototyping continues to be a trend in the analysis and simulation software arena, other important trends also will become prominent in 2011, according to our panel of experts. One of those trends is the growing interest in the use of simulation data management (SDM) or product lifecycle management (PLM) by analysts and general users. This is causing vendors to create new capabilities for SDM and PLM.

For example, with the latest version of their multi-physics software, COMSOL has included database features for the analyst to document and keep track of creations and changes to every piece of the model and simulation, according to Littmarck. “For documentation, production, future enhancements, and maintenance purposes, PLM-type features are necessary in a package for modeling and simulation. Such features shorten time to market, increase quality control, and aid investigation into critical failures.”

Peery explained that Tecplot also has added workflow integration and management features to their products. “We're very aware of how important this is. We've created layout files so work can be easily saved, restored, and archived in their systems, and decisions can be traced back to the original idea.” But PLM systems are still not easy to navigate. Added Peery, “There is a very heavy overhead associated with getting data into existing PLM systems. So, there is a lot of work we can do to make it easy and compatible.”


Added Vaughn, “Our observation is that most organizations are not sure yet how, why, or when to include simulation data in their PLM system. There is also growing interest and development of SLM. Our approach has been to listen carefully to our customers in terms of their future requirements and to position our products to be ready if and when the customers require a PLM or SLM interface.”

The most important trend for next year is an increase in the use of simulation, and the number and types of engineers who will be using the software. “Software and embedded systems will continue to grow in impact, importance, complexity, and power through 2011,” stated Friedman.

Littmarck agreed that “analysis tools will become increasingly more powerful, easier to use, and more connected to - and even embedded in - other software systems used by complementary groups of specialists or managers.”


The demand for simulation will also result in software being used in new applications. “Simulation software will continue to find new and specialized applications that will expand the demand from both traditional users and new users in industries such as off-shore, alternative energy, and medical,” predicted Weinberg. “The demand will be supported by the increases in advanced analysis product offerings at every price point.”

Both analysts and generalists having the right tool for the job is an important consideration for vendors. Said Vaughn, “I see a trend that engineers and their management are realizing that, in fact, they need a toolbox, and that one tool does not fit all jobs. My prediction is that what remains of the 1990s trend to reduce software vendors will turn back in favor of encouraging competition and making sure that engineers have the right tool for each job.”

Added Klimpke, “Given the reluctance of business to increase hiring, some designers will have to get involved in parts of designs that were previously not in their realm.” As a result, said Klimpke, the tools they use must be easy to learn and supported well by the vendor.

High-performance computing enhancements also will impact simulation and analysis next year. “As the industry makes strides in making high-performance computing more prevalent and more affordable, organizations will want to leverage engineering simulation tools to find not just a good design, but the optimal design,” explained Choudhury.

“Social networking for simulation, simulation on the cloud, and high-performance computing are all trends - evolving or developing - that vendors will increasingly need to pay attention to,” said Berry.

About NASA Tech Briefs

When the U.S. Congress formed the National Aeronautics & Space Administration in 1958, it mandated in the charter that NASA and its contractors must report to industry any new, commercially-significant technologies developed in the course of their R&D, so that engineers, managers, and scientists could use this valuable information to improve their competitiveness and productivity. For more than three decades, this has been accomplished primarily through the publication of NASA Tech Briefs. First issued as single sheet reports in the 1960s and converted to a magazine format in the 1970s, NASA Tech Briefs has been a joint publishing venture of NASA and Tech Briefs Media Group (New York City) since 1985, a pioneering government-private sector partnership that has saved taxpayers millions of dollars in publishing costs while dramatically increasing the magazine's reach to OEM design/development engineers and managers. Today, NASA Tech Briefs' qualified circulation surpasses 190,000.


In April 2006, the writer of this November 2010 MCAD/MCAE Commentary received the 2006 Lifetime Achievement Award from The CAD Society, presented by CAD Society president Jeff Rowe at COFES2006 in Scottsdale, AZ. Subsequently, in February 2007, the writer became affiliated with Cyon Research's select group of experts on business and technology issues as a Senior Analyst. This Cyon Research connection aids and supplements the writer's ongoing, independent consulting practice (HENKE ASSOCIATES), and of course the Cyon connection occasionally influences the contents of issues of the articles written for the quarterly MCAD Commentary and/or the articles written as a contributing editor of EDAcafé WEEKLY. While Cyon Research has held annual COFES sessions in Scottsdale AZ every spring since 1999, in January 2010 Cyon announced that a COFES would also be held in Tel Aviv, Israel in December 2010. See this URL:


So in preparation for the current November MCAD Commentary, the writer would occasionally “graze” news tidbits about “doings” in Israel.

One Israeli “news source” kept popping up - blogs from a group called GarargeGeeks, which describes itself as an Israeli-based not-for-profit physical and virtual space for innovative and creative people to introduce, network, expose, create, brainstorm, innovate and build. People that take part in the activities come from different disciplines such as electronics, software, mechanical, art, design, music, hacking and gaming. The spirit of GarageGeeks promotes building non-commercial projects that may otherwise not come to life. The GarageGeeks is an Israeli Registered Association (Amuta).

The home of GarageGeeks is located in the Holon Industrial Zone, Israel. The garage is a 100 square meter space that includes heavy and light machine tools, electronic components, a software development environment and raw project materials. The garage hosts monthly evening events which are all about meeting people, networking, gaming and eating, starting with monthly presentations to discuss some of the topics that are of interest to the garage community.

GarageGeeks is sponsored by Gemini Israel Funds and Carmel Ventures. Recently the writer of the MCAD Commentary came across a news tidbit dated October 22, 2010 that said that the GarageGeeks and Yossi Vardi were going to be hosting Carl Bass, Autodesk CEO. In following up, the writer then saw an article by one Shmulik Shelah dated November 14, 2010 where the latter met with Carl at such a GarageGeeks session on November 2, 2010. The article appeared in Globes [online], Israel business news -

Carl Bass was apparently en route from India back to the USA, and stopped in Israel to fulfill a promise he made last year after acquiring an Israeli company named “Visual Tao,” now called “Planned Platform,” which currently pursues developing remote access to engineering design software via the Internet.

The Shkulik Shelah article went on to quote Carl as saying, "Our software is not interesting, unless you give it to creative people who do interesting things. Over the past 15 years, every movie that has won an Academy Award in the US for visual effects used Autodesk software. Something crazy is happening in the world of mobile telephone applications. A year ago, some of our guys began a project unauthorized by management, in which they adapted the software to work with the (Apple) iPhone. We didn't believe that anyone would want to use it, but we were wrong. There is big use. The illustrations created following the use of (our) Sketchbook software for iPhone's has caused millions of users to consider buying the software. We've been in the business for 28 years, and 10-12 million copies of our software have been purchased to date. That's a lot, but it's only an average of (400,000 per year) over all the years, and all of a sudden half a million people bought the “app” software at the application store. This was the cheapest project we ever did, which reached more people than any other project. It surprised me."

Your MCAD Commentary writer was intrigued and went looking for some news release he might have missed while he was off doing EDA WEEKLY research. And there it was, a News Release from Autodesk dated September 30, 2010, entitled, “Autodesk Launches Web and Mobile Access to AutoCAD Designs -- AutoCAD WS extends AutoCAD through the cloud to web and iPad, iPhone and iPod touch.”

On September 30, 2010 Autodesk, Inc. (NASDAQ:ADSK) announced the availability of AutoCAD WS, a new free web application that uses cloud computing technology to enable AutoCAD software users to view, edit and share their AutoCAD designs and DWG files through web browsers and mobile devices. The AutoCAD WS mobile application for iOS is also now available as a free app in the App Store for iPad, iPhone and iPod touch.

"Through anytime anywhere access to AutoCAD designs, the AutoCAD WS web and iOS app greatly simplifies the way designers and engineers work in the field and with multiple stakeholders," said Amar Hanspal, senior vice president, Autodesk Platform Solutions and Emerging Business. "Autodesk has a long history of making design more accessible, and AutoCAD WS is the latest example of how Autodesk is using cloud computing and mobile platforms to extend design beyond the desktop, while helping accelerate better design."

The AutoCAD WS web application was previously available as "Project Butterfly," a technology preview on Autodesk Labs that was used by more than 75,000 people to view, edit and share AutoCAD designs through their web browsers.

With the commercial launch of AutoCAD WS, users can upload and manage designs in their online workspace directly from their AutoCAD desktop software through a new free plug-in now available for download, or as part of the Subscription Advantage Pack for AutoCAD 2011. The plug-in is compatible with 2011 English language versions of AutoCAD, AutoCAD LT and other AutoCAD products. This capability will also be integrated into the soon to be released AutoCAD for Mac software.

AutoCAD WS enables AutoCAD users to conduct virtual design reviews with stakeholders across the globe, helping to avoid issues of version control and accuracy associated with design teams sharing files via email or relying on paper documentation in the field. Using an integrated service from Google Maps, AutoCAD WS also helps users to better demonstrate designs in their environments by under-laying maps in CAD drawings.

Additional AutoCAD WS functions include the following:

"AutoCAD WS has become an essential tool in our workflow because we're able to share drawings in real-time and work from the same information, no matter where we are located," said Luis Guillermo Natera Orozco, Director, Colectivo Triciclo. "AutoCAD WS has the potential to dramatically change and improve how we work."

The AutoCAD WS mobile application for iOS is available “for free” from the App Store on iPad, iPhone and iPod touch or at

For more information about AutoCAD WS or to download and learn about products compatible with the free plug-in for AutoCAD software, visit

About Autodesk

Autodesk, Inc. is a leader in 3D design, engineering and entertainment software. Customers across the manufacturing, architecture, building, construction, and media and entertainment industries -- including the last 15 Academy Award winners for Best Visual Effects -- use Autodesk software to design, visualize and simulate their ideas. Since its introduction of AutoCAD software in 1982, Autodesk continues to develop the broadest portfolio of state-of-the-art software for global markets. For additional information about Autodesk, visit

Note: Free products and services are subject to the terms and conditions of the end-user license agreement that accompanies them.

Autodesk, AutoCAD, AutoCAD LT, DXF and DWG are registered trademarks or trademarks of Autodesk, Inc., and/or its subsidiaries and/or affiliates in the USA and/or other countries. Academy Award is a registered trademark of the Academy of Motion Picture Arts and Sciences. All other brand names, product names or trademarks belong to their respective holders. Autodesk reserves the right to alter product and services offerings, and specifications and pricing at any time without notice, and is not responsible for typographical or graphical errors that may appear in this document.

Finally, to wrap up the recent news tidbits from Autodesk, the MCAD Commentary writer includes this one about Autodesk and Stanford. Since the writer's daughter and son-in-law are both Stanford graduates, and since their daughter is enrolled at Stanford at the present time, what choice did the writer really have? Except now the writer will soon have to feature news from Cal Berkeley and San Francisco State University to placate his sons.


Stanford Students Design Recyclable Laptop
with Autodesk Inventor Software
Modular Computer Simplifies Electronics Recycling, Reduces Electronic Waste and Disassembles in Two Minutes

On October 29, 2010 Autodesk, Inc. (NASDAQ: ADSK) named a class of Stanford University graduate students as Autodesk Inventor of the Month for October for developing a prototype of the recyclable Bloom laptop.

The Bloom laptop is the project of a team of students from Stanford and Finland's Aalto University who were given the task to create a recyclable consumer electronics product that makes electronics recycling a simpler, more effective and engaging process for consumers. The students used Autodesk Inventor and Autodesk Inventor Publisher software to help develop and refine the innovative laptop during the school year. Creating 3D digital prototypes of the hardware components inside the laptop aided in creating a readily accessible laptop design that is also easy to disassemble.

When separated into different material types -- such as plastics, metals and circuitry -- the Bloom laptop's modular design makes it easy for consumers to decrease the amount of electronic waste added to landfills. For example, 1.9 to 2.2 million tons of electronics became obsolete in 2005, with only 345,000 to 379,000 tons being recycled. The Bloom can be disassembled in just two minutes, without tools and in just 10 steps. By comparison, a commercially available laptop takes about 45 minutes to disassemble, requires three separate tools and involves as many as 120 steps.

"We used Autodesk Inventor software often during the ideation phase to experiment with the design," said Aaron Engel-Hall, a Stanford student and team member. "We created 3D shapes to represent the hardware we had to design around, and the parametric design of Inventor software let me put in different parameters so that all the model dimensions would update immediately. I was also able to experiment with various thicknesses for the case enclosure, making it as thin as possible while maintaining structural integrity."

Autodesk Inventor Publisher software helped the student team create 3D technical documentation materials directly from the Autodesk Inventor digital prototypes. Interactive product manuals and instructions for the Bloom laptop -- including a 10-second animation showing the entire laptop being disassembled -- make electronics recycling a straightforward, user-friendly experience.

Beyond recyclability, Bloom delivers other benefits for consumers. The team used the easy-to-disassemble modularity of Bloom to develop a keyboard and track pad that detach and allow for improved ergonomics. The ease of disassembly also makes it easier to repair and upgrade components over the lifetime of the product, so that buying a computer is no longer a singular investment, but a longer-term relationship between the consumer and the service provider. For more information, visit the Stanford University ME310 course.

"Consumer electronics waste is a significant and growing problem," said Robert "Buzz" Kross, senior vice president, Manufacturing Industry Group at Autodesk. "These students are facing that issue head-on with their innovative Bloom laptop prototype. It's encouraging and exciting to see college students embrace Digital Prototyping to tackle the sustainability challenges of our times."

About the Autodesk Inventor of the Month Program

Each month, Autodesk selects an Inventor of the Month from the users of Autodesk Inventor software, which takes manufacturers beyond 3D to Digital Prototyping. Winners are chosen for engineering excellence and groundbreaking innovation. For more information about Autodesk Inventor of the Month, contact Email Contact.

Autodesk, AutoCAD, Autodesk Inventor and Inventor are registered trademarks or trademarks of Autodesk, Inc., and/or its subsidiaries and/or affiliates in the USA and/or other countries. Academy Award is a registered trademark of the Academy of Motion Picture Arts and Sciences. All other brand names, product names or trademarks belong to their respective holders. Autodesk reserves the right to alter product and services offerings, and specifications and pricing at any time without notice, and is not responsible for typographical or graphical errors that may appear in this document.

Dassault Systèmes Strengthens its R&D Activities in India

On November 9, 2010 Dassault Systèmes (Euronext Paris: #13065, DSY.PA) announced it combined its R&D activities in India under 3DPLM Software Solutions, Ltd.; including all DELMIA, ENOVIA, CATIA, SIMULIA and Solidworks Research & Development activities, currently based in Bangalore and Chennai.

Through its holding company, DELMIA India will become a part of 3DPLM. This acquisition will result in a change in the holding pattern of 3DPLM, increasing Dassault Systèmes' share from 30% to 42%. The completion of the transaction is conditional to regulatory approvals and is expected to occur in 2011.

Dominique Florack, Dassault Systèmes Senior Executive Vice President, Products R&D, commented: “Today's announcement is the result of our successful R&D activities in India, which started by our DELMIA laboratory in Bangalore more than 20 years ago. 3DPLM Software Solutions has been an important contributor to Dassault Systèmes global research and development platform since 2002. The expansion of our partnership today underscores the solid growth dynamic in India and Dassault Systèmes ambition to leverage this environment with deeper and more agile R&D capabilities. Moreover, by increasing our stake in 3DPLM, Dassault Systèmes both reinforces its R&D presence in the region as well as advances its innovation strategy in India for the long term. Finally, I am pleased to seize this opportunity to salute the continued high performance of Dassault Systèmes and 3DPLM R&D employees in India who will be given new opportunities to contribute to our success. I am looking forward to working with our unified team of more than 1,000 highly skilled employees.”

Mr. Shashank Patkar, CEO, 3DPLM added: “We are very pleased with this transaction which illustrates the confidence of Dassault Systèmes in our capabilities. This is a testimony of the excellence of work we do, and the speed with which we have become an integral part of Dassault Systèmes' R&D ecosystem. We are welcoming all Dassault Systèmes R&D India employees who have been demonstrating over the years their strong skills in digital manufacturing”.

About Dassault Systèmes

As a world leader in 3D and Product Lifecycle Management (PLM) solutions, Dassault Systèmes brings value to more than 115,000 customers in 80 countries. A pioneer in the 3D software market since 1981, Dassault Systèmes applications provide a 3D vision of the entire lifecycle of products from conception to maintenance to recycling. The Dassault Systèmes portfolio consists of CATIA for designing the virtual product - SolidWorks for 3D mechanical design - DELMIA for virtual production - SIMULIA for virtual testing - ENOVIA for global collaborative lifecycle management, and 3DVIA for online 3D lifelike experiences. For more information, visit CATIA, DELMIA, ENOVIA, SIMULIA, SolidWorks and 3D VIA are registered trademarks of Dassault Systèmes or its subsidiaries in the US and/or other countries.

YoungBin Cho, General Manager of Dassault Systèmes Korea, Honored for Attracting Foreign Investment

On November 3, 2010 Dassault Systèmes (DS) announced that Young-bin Cho, general manager of Dassault Systèmes Korea, had won the Commendation of Prime Minister for attracting foreign investment during 'Foreign Company Day 2010' hosted on November 3, 2010 by the Ministry of Knowledge Economy and organized by the Korea Foreign Company Association. This celebration also rewards the key role of Dassault Systèmes in the undisputable successful transformation of industries like Automotive, High Tech, Electronics and now Shipbuilding.

“I am proud to lead the Korean teams of a company so fully committed to delivering competitive advantage to the Korean industry through its unique collaborative innovation approach, its industry orientation and investments in Korean talents in Daegu,” said Young-bin Cho, general manager, Korea, Dassault Systèmes.

“Dassault Systèmes is strongly committed in Korea and our success in the shipbuilding industry is an additional illustration of that willingness to make a difference, involving the entire ecosystem of an industry. The shipbuilding sector certainly gained from our strong track record in other industries and I am looking forward to serving additional domains in my country.”

Dassault Systèmes shipbuilding R&D center in Daegu, which is regarded as the best R&D center in terms of 3D technology in Korea set up by a software company, will contribute not only to the existing development of shipbuilding industry, but also discovering the next generation of profit models for this industry in new areas such as cruises, yachts and leisure boats.

To drive the 3D convergence industry successfully, Dassault Systèmes partners with Daegu city and Kyungpook National University. In addition, Young-bin Cho was appointed as the head of “Korea 3D Convergence Industry Forum”, a key organization driving 3D convergence industry business, and announced his commitment to fostering 3D convergence industry in Daegu, Gwangju and province of Gyeongsangbuk-do.

EADS and Dassault Systèmes to Reach a New level of Cooperation to Accelerate Introduction of PLM 2.0

On October 28, 2010 Dassault Systèmes (Euronext Paris: #13065, DSY.PA announced enhanced cooperation with EADS in the PLM domain, supporting the recent EADS initiative called Phenix PLM Harmonization Center (PHC). The PHC program, involving extensive validation study performed on the V6 Dassault Systèmes portofolio, aims at accelerating the introduction of PLM 2.0 platform to better meet business needs and challenges on current and future EADS programs.

Dr. Jean Botti, Chief Technology Officer at EADS, stated: “Our strategic goal is to improve the efficiency and performance of our engineering and manufacturing. Dassault Systèmes is an EADS strategic partner for this purpose in the PLM domain. With our new EADS corporate initiative, the PLM Harmonization Center (PHC), this will continue to foster innovative practices at EADS.”

EADS is a global leader in aerospace, defense and related services. In 2009, the Group - comprising the Divisions Airbus, Astrium, Cassidian and Eurocopter - generated revenues of € 42.8 billion and employed a workforce of more than 119,000.

ESI India User Forum 2010 will bring together Indian users to share expertise, best practices, challenges and successes in Virtual Prototyping. In addition to learning from simulation experts, attendees will get a sneak peak at ESI's latest product features and benefits, as well as practical tips and tricks.

4 reasons to attend ESI India User Forum:

ESI Releases PAM-CEM Simulation Suite 2010

On October 28, 2010 the ESI Group announced the release of its electromagnetic package for full virtual testing, called PAM-CEM Simulation Suite 2010.

ESI's PAM-CEM Simulation Suite addresses realistic models in their early “electromagnetic” design stage thanks to unique coupling capabilities allowing multi-scale electromagnetic phenomena to be assessed in the middle and high frequency ranges. End-users thus benefit from PAM-CEM's ability to handle fully equipped 3D models, featuring on-board complex antennas as well as sophisticated cable networks.


The 2010 version of PAM-CEM Simulation Suite includes several key enhancements of significant benefit for industrial users, among which there are two major enhancements of special interest to the Automotive and Marine sectors:

Near radiated fields for Automotive RADAR

The previous version of PAM-CEM offered a dedicated upgrade to access electromagnetic fields radiated in the so-called “near zone”, i.e. outside the 3D computational domain but not yet in the far zone. With the brand new 2010 upgrade, additional reflecting obstacles or vehicles can be taken into account together. Also, very thin paint bumper coatings that interfere with automotive RADAR devices are treated.

“The introduction of PAM-CEM has allowed us to conduct very precise electromagnetic wave simulations. We believe electronic control systems will be increasingly important in the development of the cars of the future”, declared Yasushi Hamada, Manager of the Electronic Testing and Research Group at MAZDA Motor Corporation.

High Frequency Electromagnetics 

PAM-CEM Simulation Suite 2010 includes an additional product, named PAM-CEM/HF, which relies on the Physical Theory of Diffraction (PTD) combining Physical Optics and Equivalent Edge Currents. Specific applications can be found in Aeronautics with high frequency RADAR scattering or in the Navy with the radiation of integrated antennas.

“Together with Visual-CEM 6.5 and the forthcoming Special Version also presenting some new capabilities such as 3D/3D coupling for advanced source modeling, PAM-CEM Simulation Suite 2010 is clearly user-oriented and targets industrial modeling”, said Dr. Jean-Claude Kedzia, PAM-CEM Product Manager at ESI Group.

About ESI Group

ESI is a pioneer and world-leading solution provider in virtual prototyping that takes into account the physics of materials. ESI has developed an extensive suite of coherent, industry-oriented applications to realistically simulate a product's behavior during testing, to fine-tune manufacturing processes in accordance with desired product performance, and to evaluate the environment's impact on performance. ESI's solutions fit into a single collaborative and open environment for End-to-End Virtual Prototyping, thus eliminating the need for physical prototypes during product development. The company employs over 750 high-level specialists worldwide covering more than 30 countries. ESI Group is listed in compartment C of NYSE Euronext Paris. For further information, visit


On October 28, 2010 PTC unveiled “Project Lightning,” its landmark initiative that it says will redefine CAD, in a combination on site and virtual event. Physically held in Boston at the Park Plaza Castle, this event allowed both in person as well as Internet-connected attendees the opportunity to be among the first “to witness the vision, hear the strategy and see the product that PTC hopes will transform the mechanical CAD marketplace.”

The formal part of the event was held from 10:00 AM EDT to NOON EDT, which was the portion the remote audience could see and hear via the Internet. The writer of this MCAD COMMENTARY participated remotely from 7:00 AM to 9:00 AM PDT, for example.

The main PTC speakers were Jim Heppelmann, PTC president and CEO; Brian Shepherd, executive vice president of product development; and Michael Campbell, divisional vice president of design and visualization products, and several speakers from key customers who had already been exposed to Creo and gave testimonials. Each speaker was well prepared and backed by excellent, often animated visuals. The customers were CAD executives/managers and users who first spoke to difficulties each had encountered in the past using existing CAD tools. Then, as the presentation progressed, the same customers extolled the features, functions and benefits that they perceived would be in Creo.

So a combined on-site and virtual worldwide audience had a chance to learn how PTC plans to:

PTC gained lots of press coverage within the weeks that followed the October 28 “event.” A fine report was turned in by MCADcafe's own Jeff Rowe, first posted on November 9, 2010. Read it at:


See also PTC's announcement summary below:

PTC Introduces Creo Design Software

Four Breakthrough Technologies Designed to Unlock Potential; Solve Chronic Customer Challenges With Traditional CAD Tools
On October 28, 2010 PTC (NASDAQ: PMTC) unveiled CreoTM design software. Creo is being designed as a scalable suite of interoperable, open, and easy-to-use product design apps. The Creo vision and strategy, first introduced in June 2010 at the PTC/USER World Event as Project Lightning, recognizes that product development involves many different users with different needs at different points in the product lifecycle. Unlike solutions to date, Creo is designed to remedy lingering, unaddressed problems that have plagued CAD for decades.

"Creo is being specifically created to solve the big problems remaining in the mechanical CAD market: usability, interoperability, assembly management and technology lock-in," said James E. Heppelmann, president and CEO, PTC. "By providing the right-size product design apps for each participant in a company's extended product development team, Creo will enable more people to participate earlier and more fully in the product development process, significantly expanding innovation capacity."

"Historically companies have made significant investments in CAD applications that bind them into inflexible business processes and design practices dictated by the specific visual authoring or simulation application that they pick. PTC's game-changing vision to release a highly flexible CAD application in a new code base, while sticking to existing file formats under the Creo portfolio, is expected to rejuvenate the mature CAD market and open up a path for non-PTC CAD users to move easily on a flexible visual design platform," says Sanjeev Pal, research manager, IDC.

Highlights of planned apps include:

"We believe Creo could be significant and a positive advance in PTC's product offerings." said Mike Galbraith, Global Engineering Systems & Services, Tyco Electronics. "Creo could allow the teams involved in designing new products and bringing them to market...across different functions, different locations, etc... to productively use the same toolset throughout the product life-cycle process. We're looking forward to working with PTC and their other partners in shaping these new capabilities."

"Creo is being designed to allow product development organizations to do what they do best - innovate and develop great products free from the constraints imposed by the tools they depend on," said Brian Shepherd, EVP Product Development, PTC. "Many customers are trapped by legacy tools and locked into technologies that may no longer meet their needs. High switching costs make it difficult to migrate to a new technology, application or vendor and retire old tools. We expect Creo will eliminate the pressure to standardize on a single vendor or technology platform."

Heppelmann concluded, "By leveraging a core set of technology assets unique to PTC, we are once again redefining a market plagued by seemingly insurmountable challenges."

Existing Brands

PTC's current design software product families and associated modules, extensions and packages are being rebranded in alignment with the functional capabilities provided by each product.

Data created in these applications will be fully upwards compatible with the Creo family of products.

For more information please visit:


PTC expects Creo 1.0 to be available during mid-year 2011.

The timing of any product release, and any features or functionality thereof, are subject to change at PTC's discretion.

To learn more about Creo, please visit

About PTC (

PTC (NASDAQ: PMTC), The Product Development Company®, develops, markets and supports product development software solutions and related services that help companies achieve their product development strategies and optimize their processes. Using the company's tightly integrated CAD and enterprise PLM solutions, organizations are better able to create and manage product information throughout the lifecycle for optimal product development success.

This press release contains forward-looking statements about the anticipated effects of Creo on the CAD market and the expected release and features of Creo. Creo may not have the effects we expect on the market, may not be adopted by customers as we expect, and may not generate the revenue we expect. Further, the timing of the release of Creo, and any planned apps, features or functionality thereof, may be delayed and may be changed at PTC's discretion. PTC and its logo, The Product Development Company, Creo, Pro/ENGINEER, CoCreate, ProductView, Windchill, AnyMode Modeling, AnyData Adoption, AnyRole Apps, AnyBOM Assembly, Elements/Pro, Elements/Direct and Elements/View are trademarks or registered trademarks of Parametric Technology Corporation or its subsidiaries in the United States and other countries.

On November 3, 2010
PTC announced that NCR Corporation has selected Pro/ENGINEER® ( now CreoTM Elements/ProTM), PTC's design software, and Windchill®, PTC's PLM software to consolidate its data environment and enable faster global product development and innovation.

The implementation is part of NCR's corporate strategy to converge on one design platform and to establish an enterprise-wide repository for design data management. This strategy will help drive innovation across the company and bring next-generation innovations in self-service technology to market faster.

Together, Pro/ENGINEER (now Creo Elements/Pro) and Windchill provide a standard design platform and global design data management system for NCR. The design platform and consolidated data environment means fewer systems to support and maintain, enables management to apply resources to the most critical projects, lowers operating costs and enhances collaboration and round-the-clock design and development.

"Today more than ever, data management and product development are critical to achieving global success," said Kathleen Mitford, vice president, product market and strategy, PTC. "We are excited to work with NCR, as through this newly optimized global environment the company is able to further strengthen its geographic presence."

About NCR Corporation

NCR Corporation (NYSE: NCR) is a global technology company leading how the world connects, interacts and transacts with business. NCR's assisted- and self-service solutions and comprehensive support services address the needs of retail, financial, travel, healthcare, hospitality, entertainment, gaming and public sector organizations in more than 100 countries. NCR ( ) is headquartered in Duluth, Georgia.

On November 15, 2010 PTC® (NASDAQ: PMTC) announced it has been named the winner of the Fall 2010 Technology Services Industry Association (TSIA) STAR Award for Overall Operational Excellence in Technology Professional Services. The award was announced October 20, 2010 at the Technology Services World conference in Las Vegas.

The award recognizes PTC for achieving exceptional organizational maturity across all areas of the professional services business. These include developing people, building customer relationships, and delivering high quality services to customers.

With more than 20 years experience in implementing complex product development systems, PTC Global Services believes that a successful customer program occurs through a strategic partnership that is focused on achieving customer value. PTC's Value Centric Engagement approach enables customers to maximize their product development investments by building a roadmap to value that leverages industry best practices, the appropriate governance, a shared delivery model, and a value scorecard that measures client specific metrics for success. This approach helps customers achieve real, measurable value from their PLM (product lifecycle management) implementations. This concept of realized value underlies PTC's delivery strategy which utilizes its proprietary its proprietary Realized Value Platform (RVP), a comprehensive set of field-tested intellectual property configured to meet customer specific implementation needs and to deliver an efficient, high-quality PLM implementation.

“Customer value is the center of everything we deliver,” said Marc Diouane, executive vice president global services, PTC. “Our expertise, capabilities and capacity enable PTC customers to realize value through the full lifecycle of deploying an enterprise PLM solution. We work to create a partnership with our customers to improve product development performance through technology-enabled process improvements. The TSIA STAR award is validation that PTC is committed to customer service and support.”

"The here-and-now realities facing today's services organizations present a multitude of challenges and PTC has clearly demonstrated its high-level commitment to delivering world-class results," said J.B. Wood, CEO, TSIA.

Companies seeking the STAR Award undergo a rigorous evaluation process, with the winners selected by TSIA's service discipline advisory board members. Since 1990, the STAR Awards have become one of the highest honors in the service and support industry, acknowledging the contribution of companies of all sizes to the continual improvement of service and support delivery industry-wide. For information on the STAR Awards, go to

About TSIA

The Technology Services Industry Association (TSIA) is the leading association dedicated to advancing the business of technology services. Technology services organizations large and small look to TSIA for world-class benchmarking and research, exceptional peer networking and learning opportunities, and high-profile certification and awards programs. Find TSIA online at

The writer of the MCAD Commentary just heard from industry sources about the following news on November 24, 2010. It is the writer's understanding from those same industry sources that Dassault Systems is the current software supplier to Daimler AG that will be displaced, following a long and arduous benchmarking evaluation.

Daimler Selects CAD Software from Siemens as New Platform for Worldwide Car and Truck Development

On November 24, 2010 Daimler AG announced it had selected CAD Software from Siemens as their standard for their worldwide vehicle development. Starting in the summer of 2012, Daimler will integrate work from over 20 development centers and their most important suppliers on a single product development platform. Both companies have agreed not to disclose the contract value.

With the decision for the NX™ CAD Software of Siemens, Daimler completes their current implementation of Teamcenter®,the company's product data management backbone. Based on this combination, the automotive manufacturer will establish digital collaboration from initial concept design, through simulation during design, down to proof of concept of design solutions. The consolidation of digital product information in one single worldwide data pool will facilitate new vehicle development. The introduction of parallel processes in development, design, production planning and production will further optimize the entire value chain.

“The combination of NX CAD software with our product data management system Smaragd, which is based on Teamcenter, will integrate our entire product creation process from design through production planning down to managing production machines,” said Prof. Bharat Balasubramanian, who is responsible at Daimler for R&D product innovation and process technology.

With Daimler another vehicle manufacturer decided this year to optimize their worldwide vehicle development process with software solutions from Siemens. By changing to Siemens' open software solutions, car manufacturers can enhance their quality and efficiency in vehicle design and development.

Modern vehicle design requires an increasing integration of mechanical, electrical and electronic components with an ever expanding software ratio. This requires the integration of all of the information associated with mechanical, electrical and software in an integrated platform to allow for collaboration across the full value chain, including suppliers.

“Our CAD and PLM software will help manufacturers enhance their development processes and their production planning and therefore increase their productivity,” Chuck Grindstaff stated, president and chief technology officer of Siemens PLM Software, a business unit of the Division Industry Automation.

With software from Siemens, car manufacturers can manage the product and production planning in parallel with production, encompassing the entire value chain. Daimler has worked with Siemens' Teamcenter software for collaborative product data management since the mid 90s. With NX CAD software from Siemens, Daimler will implement a computer-based tool for the entire product development process and therefore a solution for collaborative design, engineering- and development work.

Today Siemens is one of the leading suppliers of PLM software with 6.7 million licenses and 69,500 customers around the world. The market for PLM software is exhibiting stronger growth than any other business software market. In 2009 the market had a volume of € 23 billion with a growth rate of 8% p.a. by 2014.

About Siemens PLM Software

Siemens PLM Software, a business unit of the Siemens Industry Automation Division, is a leading global provider of product lifecycle management (PLM) software and services with 6.7 million licensed seats and more than 69,500 customers worldwide. Headquartered in Plano, Texas, Siemens PLM Software works collaboratively with companies to deliver open solutions that help them turn more ideas into successful products. For more information on Siemens PLM Software products and services, visit

About the Siemens Industry Automation Division

Siemens Industry Automation Division (Nuremberg, Germany) is a worldwide leader in the fields of automation systems, industrial controls and industrial software. Its portfolio ranges from standard products for the manufacturing and process industries to solutions for whole industrial sectors that encompass the automation of entire automobile production facilities and chemical plants. As a leading software supplier, Industry Automation optimizes the entire value added chain of manufacturers - from product design and development to production, sales and a wide range of maintenance services. With around 33,000 employees worldwide (September 30), Siemens Industry Automation achieved sales of €6.2 billion in fiscal year 2010.

About Siemens Industry Sector

The Siemens Industry Sector (Erlangen, Germany) is the worldwide leading supplier of environmentally friendly production, transportation, building and lighting technologies. With integrated automation technologies and comprehensive industry-specific solutions, Siemens increases the productivity, efficiency and flexibility of its customers in the fields of industry and infrastructure. The Sector consists of six divisions: Building Technologies, Drive Technologies, Industry Automation, Industry Solutions, Mobility and Osram. With around 204,000 employees worldwide (September 30), Siemens Industry achieved in fiscal year 2010 total sales of approximately €34.9 billion.

In the preface of this November 2010 issue of the MCAD/MCAE Commentary, the following MSC.Software status was noted:

On July 07, 2009 MSC.Software announced that it had entered into a definitive agreement with affiliates of Symphony Technology Group (STG) under which a company controlled by STG would acquire all of MSC's outstanding shares in a one-step cash merger transaction. This acquisition of MSC.Software by STG was finally consummated on October 14, 2009. No financial results for MSC.Software were published for Q3 2009, and none since. Unless and until such data are subsequently made available, MSC.Software has been dropped from coverage herein, although occasionally MSC.Software news items that bear on the industry as a whole will be mentioned.

One of the important announcements of the October 14, 2009 consummation date was the appointment of Dominic Gallello as the new MSC CEO. (A new CFO Jim Johnson was also appointed and announced on October 14, 2009).




While no further financial results have since been published by MSC for us to include in our quarterly MCAD Commentaries, we have followed MSC's progress from afar, occasionally reporting on MSC activities that affect the MCAD/MCAE industry as a whole. Such reports have included mention of certain MSC customer wins over the last year or so, as well as occasional mention of product updates and releases that have occurred.

But what may have escaped our notice since October 14, 2009, are the relatively quiet but critical changes in MSC management leadership that Mr. Gallello has wrought over the last 13 months. A glance at today's list of managers published on MSC's web site, reveals a host of new names that the MCAD Commentary writer does not recall as being prominently listed prior to Mr. Gallello's and Mr. Johnson's appointments. Many new faces have come from outside the company, while several have been promoted from within MSC:





MCAD Commentary readers may check out the backgrounds of each of these individuals on whom the future of MSC.Software depends, at this URL:





Economic & Political Editorial:

While the Democratic Party and especially President Obama have been blamed in recent quarters for the U.S. unemployment rate still hovering at 9.6 %...


… it's important to remember that it was the Bush Administration's deregulation policies of 2001 through 2007 that led to Bush 43's second recession, which put the country into this pickle! This is because the public has a very short-term collective memory; accordingly, it now runs the chance of once again favoring (and adopting) the very misbegotten policies which led to that economic downturn in the first place, starting in December 2007 (i.e. 14 months before President Obama took office). The outcome of the mid-term elections earlier this month (November 2010) demonstrates that much the public has already begun to forget which party was in the oval office when the worst recession since the Great Depression began and worsened.

The fact of the matter is, that the Obama Administration has been doing a fairly decent job of recovering from the jobs hole that the recession created and that Mr. Obama inherited.

If one considers the critical statistic of job creation in the U.S. from private employers (i.e. not census workers and the like), the progress from the middle of 2009 is obvious, with just a hiccup in mid-2010 (when the Deepwater Horizon explosion and BP Gulf Oil Spill momentarily dulled the country's optimism), as the chart below shows:

On November 5, 2010, the U.S. Labor Department said that the United States economy added 151,000 total jobs in October 2010,of which 159,000 were private sector jobs (the orange bar in the graph above), even though “economists” had forecast a net gain of only 50,000 for October.The Labor Department also revised upward the employment numbers for August and September 2010, showing 110,000 fewer jobs lost than previously reported. In total, the American economy has added 860,000 positions just this calendar year, indicating that the picture is not quite as bleak as Mr. Obama's rivals painted it before the midterm elections.

There were other positive notes in the November 5th report as well. Hourly wages were slightly higher last month. A broader measure of unemployment, which includes people who are working part time because they cannot find full-time jobs and people who have given up seeking work, went down to 17.0% from 17.1% in September.

John Ryding, chief economist at RDQ Economics, looks for growth in the fourth quarter of 2010. “The notion that the economy might be double dipping can now be safely tossed out,” he said.

Among the industries with the biggest gains in October were education and health services, which added 53,000 jobs;retail, which added 28,000; and temporary help services, which expanded by 34,900 jobs. Another positive sign was a lengthening of the private-sector workweek, which rose by one-tenth of an hour, to 34.3 hours. Like the hiring of temporary workers, an expanding workweek is a harbinger of more permanent hiring. Longer hours and higher hourly wages should help propel consumer spending, which in turn will lead retailers to hire more workers.

So with all this progress since the middle of 2009, why does the U.S. unemployment rate still just hover above 9%? The basic reason is that far more Americans enter the work force each month than the jobs progress to date can absorb. As the New York Times points out, even if the economy suddenly expands and starts adding, say, 208,000 jobs a month, it would still take 12 years to close the gap between the growing number of American workers and the total available jobs.

We really need eight years like 1993 through 2000, when the Clinton Administration managed an economy that added an average of 240,000 jobs per month.

Unfortunately, Mr. Obama's clear progress in creating private sector jobs to this point is constantly threatened, because both the Republicans and the Tea Party seem to oppose every Obama policy, simply to discredit Obama and limit him to one term, regardless of the relative success of the Obama policy in discussion. These same Obama opponents are constantly vocal about keeping the Bush tax cuts for the rich, killing the new Health Care bill, upping the retirement age to 70, cutting Social Security benefits, ad nauseum -- the country and the rest of us be damned.

In fact, there was only a moment in mid-November when Mr. Obama's critics fell silent. It was when General Motors had one of the most successful public stock offerings in history, raising $23.1 billion in its return to the stock market, allowing the U.S. Government to reduce its stake in GM from 61% to 26%. Mr. Obama's bailout of GM has been under intense criticism from the right wing ever since his courageous decisions nearly two years ago to try to save the American auto industry and the millions of jobs it represents. “We are finally beginning to see some of these tough decisions that we made in the midst of the crisis pay off,” Mr. Obama said. “Our automakers are in the midst of their strongest period of job growth in more than a decade.”

But that moment of silence from Mr. Obama's critics passed quickly.

These same Obama opponents went right back to their shouting pulpits, this time to actually propose leaving the new START treaty un-ratified!Signed by Mr. Obama and Russian president Dmitri Medvedev in Prague in April 2010, the new treaty mandates 30% cuts in deployed strategic nuclear weapons by both sides, and it is the cornerstone of a new era of U.S.- Russian cooperation.


The weapons cuts are valuable in themselves, because they oblige the two countries, which together possess 90% of the world's nuclear weapons, to reduce to 1,550 warheads each. The treaty also imposes drastic reductions in delivery vehicles (intercontinental ballistic missiles, submarine-launched ballistic missiles, and long-range bombers) from 1,600 for each country under the last treaty (signed by Bush 41) to only 700 in the future.

But the symbolic importance of the new treaty is at least as important,as it was the first concrete step in the reconciliation of the two former superpowers after the growing hostility of the last decade.

The immediate diplomatic benefits of the treaty for the United States have included Russian support for harsher sanctions in response to Iran's alleged nuclear weapons program, Russian logistical support for NATO's operation in Afghanistan (Moscow is supplying one-third of the fuel used by U.S. troops there), and a remarkable degree of Russian-American co-ordination in dealing with the violent chaos in Kyrgyzstan earlier this year.

Failure to ratify the treaty would drastically undermine the new mutual trust that has been established between Russia and the United States.Yet that is exactly what many Republicans are proposing, merely to deny Mr. Obama a foreign policy victory. Plain nuts!

Oh Yeah … one parting thought: These same Obama opponents are also arguing against extending unemployment insurance payments for the U.S. jobless. So much for “faith, hope and charity.” Happy Thanksgiving and Happy Holidays, everyone!


[1] Footnote: Virtually all US companies that have international operations, and any company whose HQ is outside the USA (e.g. Dassault Systemes, ESI Group, ARM Holdings plc, et al) encounter the need to express financial data in both GAAP as well as IFRS standard formats. Apparently, the world is moving more and more to merging the two accounting standards, with a definite bias toward IFRS.

(This is not to say that companies will totally abandon the use of non-GAAP or non-IFRS reporting when it suits their reporting presentation goals).

International Financial Reporting Standards (IFRS) have been affecting US companies for some time, whether through their business dealings with non-US customers and supply chains that use IFRS, or through their non-US subsidiaries' adoption of IFRS. If they have not done so already, US companies will feel the increasing effect of IFRS as key aspects of United States Generally Accepted Accounting Principles (US GAAP) and IFRS continue to converge. The US Securities and Exchange Commission's (SEC) roadmap for adopting IFRS recently called for adoption by 2014, although that date is of course subject to delay.

Despite such delay, the US government's acknowledgment of the need for a single set of high-quality global standards, in addition to the continuing globalization of capital markets, suggest that IFRS (not US GAAP) will eventually become the new global standard.

Most likely the end result will be a convergence of US GAAP and IFRS standards. In the meantime, many US companies and their investors will see, among other things, major changes in financial statements. The impact of the accounting changes caused by convergence will go beyond mere financial reporting. Tax policy, mergers and acquisitions, financial planning, systems requirements, and compensation structures are just some of the areas that will be affected. Get familiar with it; it's coming fast! Who said accounting was dry and boring?




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About the Author of the November 2010 MCAD/MCAE Commentary

Since 1996, Dr. Russ Henke has been president of HENKE ASSOCIATES, a San Francisco Bay Area high-tech business & management consulting firm. The number of client companies for HENKE ASSOCIATES now numbers more than forty. During his corporate career, Henke operated companies sequentially on "both sides" of MCAE/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 served on the SME International Board of Directors. He is also a member of the IEEE and a Life Fellow of ASME International. In April 2006, Dr. Henke received the 2006 Lifetime Achievement Award from the CAD Society, presented by CAD Society president Jeff Rowe at COFES2006 in Scottsdale, AZ. In February 2007, Henke became affiliated with Cyon Research's select group of experts on business and technology issues as a Senior Analyst. This Cyon Research connection aids and supplements Henke's ongoing, independent consulting practice (HENKE ASSOCIATES). Dr. Henke is also a contributing editor of the EDACafé EDA WEEKLY, having published 14 EDA WEEKLY articles since November 2009. To access these articles, go to:

To obtain details on the "2010 Business Planning Tool Kit Promotion" from HENKE ASSOCIATES, which has now been extended until May 2011, please click on the URL below and scroll to the last entry on that page:

Since May 2003 HENKE ASSOCIATES has now published a total of ninety-three (93) independent COMMENTARY articles on MCAD, PLM, EDA and Electronics IP on IBSystems' MCADCafé and EDACafé. Further information on HENKE ASSOCIATES, and URL's for past Commentaries, are available at March 31, 2011 will mark the 15th Anniversary of the founding of HENKE ASSOCIATES