MCAD/MCAE Industry View - A March 2011 Update
[ Back ]   [ More News ]   [ Home ]
MCAD/MCAE Industry View - A March 2011 Update

Commentary: MCAD/MCAE Industry View - A March 2011 Update

by Dr. Russ Henke
Henke Associates


This March 2011 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 Fourth 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 thirty (30) 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 financial reporting 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 article 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-second (32ND) 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 fourth quarter of calendar 2010:

The timing of the posting date of the MCAD/MCAE Commentary each quarter is driven by the release date of quarterly financials of the last G5 vendor reporting.
Again this quarter it was Autodesk, which released its Q4 2010 results on FEBRUARY 24, 2011, but this month did so just a few hours after ANSYS’ Q4 2010 release.

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


G5 MCAD/MCAE Vendors' Financials in Q4 2010

Measured in $US except where indicated, Table 1 below reveals that the combined total revenue of the G5 was US$1610.9 million in Nominal Q4 2010, a very healthy 12.8% rise over the $1427.7 million total in the just prior Q3 2010, and a robust 16.3% above the total year-over-year figure of $1385.6 million for Q4 2009.

With such a healthy quarter to end the year, the G5’s average quarterly revenue for 2010 was $1431.8 million, a gaudy 13.9% better average than the $1257 million per quarter in 2009. “Gaudy” to be sure, but sadly not enough for 2010’s annual revenue total to reach or eclipse the revenue total in 2008, i.e. the revenue total for the year just before Bush 43’s second recession started sucking the life from the worldwide economy in December 2007.

But Q4 2010 almost made it happen -- another $210 million in additional revenue from the G5 in Q4 2010 is “all it would have taken.” For some of us MCAD aficionados, it would have been a nice additional feather to add to President Obama’s “Comeback Hat” [1].

As Table 1 reveals, both ANSYS and Autodesk made up for 9 months of relative revenue flatness, each with a proportionally huge Q4 2010 revenue result, achieving 2010 yearly revenue totals of $580.2 million and $1.952 billion, respectively. Dassault Systemes (DS) made the climb with increasing revenue each quarter toward a $2 billion+ revenue year, and PTC split the year in half, advancing in two “half-year steps” toward a billion dollar+ revenue year. Rounding out the G5, the ESI Group chimed in with a $100 million+ revenue total of its own for 2010.

So it will most likely still be another year (2011) before 2008 is matched or exceeded in terms of G5 total annual revenue. But already in early 2011, the steady U.S. economic recovery is threatened with upheavals in the Middle East, ballooning oil prices, and misguided U.S. right wing crusading for union busting, deficit reductions that no one wants, and a threatened U.S. Government shutdown [2].

1 Notice that these Table 1 columns calculate the percentage of one quarter over the other, as labeled, whereas in Table 2 below, the relevant columns provide the numerical dollar differences in earnings between two different quarters as labeled.

2 In Tables 1 and 2, the FX rates for Q4 10 & Q4 09 for ESI Group, were the same FX rates used for DS in Q3 10 & Q3 09.

Turning to earnings in Table 2 below, the same four vendors whose combined net earnings total was only $146.3 million in sequential Q3 2010, blossomed nearly +85% in Q4 2010 to an earnings total for Q4 2010 just under $231 million, with DS leading the profit charge but with the three others also providing healthy contributions.

The resulting Total G5 Q4 2010 ROS of over 14% is not too shabby, and not surprisingly, it was the best total ROS quarter of 2010.

3 Notice that these Table 2 columns calculate the numerical dollar differences in earnings between two different quarters as labeled, whereas in Table 1, the relevant columns provide the percentage of one quarter over the other, as labeled.

Individual G5 Vendors' Q4 2010 Performances

On February 24, 2011, ANSYS (NASDAQ:ANSS) reported on its financial results for Q4 2010 and for its Fiscal Year 2010, both ending December 31, 2010.

As is customary these days, ANSYS began its report with Highlights:

"We are pleased to close out 2010 with strong quarterly and annual performance that exceeded our initial commitments of a year ago. All aspects and regions of the business made solid contributions. Throughout the year, we heightened investment in our organization, our technology offerings and our infrastructure, while delivering profitable growth. We released ANSYS® 13.0 during Q4 2010, which positioned us even better to drive top-line growth and extend our customer relationships through the broadest, deepest and most integrated product offerings in our 40 year history. Into 2011, all of the factors driving simulation remain in full force as companies strive to compete with next generation products, and with smarter products that are increasingly more energy efficient, productive and sustainable. Our long-term enthusiasm for the future remains intact," commented ANSYS president & CEO Jim Cashman.

ANSYS' fourth quarter and full year 2010 financial results are presented below.

Total GAAP revenue of $166.6 million in Q4 2010, above the top of the $157 to $163 million guidance range given last quarter, up 19.17% or $26.8 million over sequential Q3 2010 revenue of $139.8 million; and up 10.78% as compared to $150.4 million in Q4 2009.

Total GAAP revenue of $580.2 million in 2010, up 12.25% as compared to $516.9 million in 2009.

A GAAP operating profit margin of 39.3% in the fourth quarter of 2010 as compared to 40.1% in the fourth quarter of 2009; a GAAP operating profit margin of 37.8% in 2010 as compared to 35.5% in 2009.

GAAP net income of $49.1 million in Q4 2010, up 36.01% or $13 million above sequential Q3 2010 net income of $36.1 million, and up 30.59% or $11.5 million as compared to GAAP net income of $37.6 million in Q4 2009; GAAP net income of $153.1 million in 2010, up 31.53% or $34.9 million as compared to GAAP net income of $116.4 million in 2009.

GAAP diluted earnings per share of $0.52 in Q4 2010, above the top of the guidance range of $0.44 to $0.48 provided 3 months ago, and up 26.8% as compared to GAAP diluted earnings per share of $0.41 in Q4 2009; GAAP diluted earnings per share of $1.64 in 2010, up 29.13% as compared to GAAP diluted earnings per share of $1.27 in 2009.

Operating cash flows of minus $25.3 million (cash outflows) in the fourth quarter of 2010 as compared to $44.9 million (cash inflows) in the fourth quarter of 2009; operating cash flows of $166.9 million for fiscal year 2010 as compared to $173.7 million for fiscal year 2009. Operating cash flows included net incremental tax payments of $66.1 million and $55.1 million in the fourth quarter and fiscal year 2010, respectively, related to the restructuring of the Company's Japan subsidiaries that was disclosed with the Company's third quarter earnings announcement and Form 10-Q. Excluding these amounts, operating cash flows were $40.9 million for the fourth quarter of 2010 and $222.0 million for fiscal year 2010.

The GAAP results discussed above include the following:

The Company's GAAP results reflect stock-based compensation charges of approximately $5.1 million ($3.8 million after tax) or $0.04 diluted earnings per share for the fourth quarter of 2010 and approximately $19.0 million ($14.8 million after tax) or $0.16 diluted earnings per share for fiscal year 2010.

Management's 2011 Financial Outlook

The Company's 2011 guidance for both revenue and for GAAP earnings per share are provided below.

First Quarter 2011 Guidance

The Company currently expects the following for the quarter ending March 31, 2011:

Revenue in the range of

$151.0 - $157.0 million

GAAP diluted earnings per share of

$0.41 - $0.44

Fiscal Year 2011 Outlook

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

Revenue in the range of

$640.0 - $660.0 million

GAAP diluted earnings per share of

$1.77 - $1.89

The first quarter and fiscal year 2011 guidance reflected above includes the following estimated income tax benefits related to the previously announced restructuring of the Company's Japan subsidiaries:

First quarter 2011 estimated tax benefits:

$2.0 million - $2.1 million

Fiscal year 2011 estimated tax benefits:

$8.0 million - $8.4 million

Additionally, the Company expects that the restructuring of the Japan subsidiaries will positively impact 2011 cash flow operations by approximately $45.0 - $50.0 million by reducing required income tax payments.

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

ANSYS turns 40!

In case you missed it, readers may be interested in the “ANSYS turns 40!” profile of ANSYS first posted by this writer in an EDA WEEKLY on July 19, 2010:

As it happens, the same “ANSYS turns 40!” article by this writer was also published in Jeff Rowe’s column on the same date in!

ANSYS, Inc. self description

ANSYS, Inc., founded in 1970, develops and globally markets engineering simulation software and technologies widely used by engineers and designers across a broad spectrum of industries. 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 approximately 1,660 people and distribute ANSYS products through a network of channel partners in over 40 countries. Visit for more information.

Additional Information about ANSYS [3]:

From time to time, the writer of this quarterly MCAD/MCAE Commentary will include excerpts from a G5 Vendor’s Form 10-K Report to the United States Securities and Exchange Commission (SEC). This supplement is intended solely to give new or occasional readers a background on the MCAD/MCAE business sector in general and the featured Vendor in particular. See Footnote [3].

Over time in future Commentaries, such Form 10-K excerpts may be included for each G5 Vendor if available, at the rate of one per quarter.

On February 24, 2011, Autodesk, Inc. (NASDAQ:ADSK) reported the financial results for its fourth quarter and full fiscal year 2011, both ending in January 31, 2011. Autodesk’s actual fourth fiscal quarter is treated herein as nominal Q4 2010.

Q4 2010 Highlights:

Q4 2010 revenue was $528 million, a year-over-year increase of nearly 16% compared to nominal Q4 2009 and approximately +11% compared to sequential Q3 2010. Provided three months ago, Autodesk’s revenue guidance for nominal Q4 2010 was a range from $500 million to $520 million.

Q4 2010 GAAP operating margin was 14%, compared to 12% in nominal Q4 2009 and 15% in the just prior Q3 2010.

Q4 2010 GAAP Net Income was $61.6 million, up 23% compared to $50.1 million in nominal Q4 2009, and up 14.9% compared to $53.6 million in sequential Q3 2010.

Q4 2010 GAAP diluted earnings per share were $0.26, compared to $0.21 in nominal Q4 2010, and compared to $0.23 in sequential Q3 2010. Provided three months ago, Autodesk’s GAAP diluted EPS guidance for nominal Q4 2010 was a range from $0.19 to $0.22.

Cash flow in Q4 2010 from operating activities was $176 million, a year over year increase of 40% compared to Q4 2009 and 54% compared to sequential Q3 2010.

“We closed the year with solid momentum and double-digit quarterly revenue growth in all of our geographies and all of our business segments," said Carl Bass, Autodesk president and CEO. “We’re seeing a global increase in demand for 3D design, engineering, and entertainment tools. Demand for our Inventor software helped to deliver record quarterly revenue in our Manufacturing segment, and record quarterly sales of our Revit family of products led to strong growth in our Architecture, Engineering and Construction segment.”

“Our fourth quarter results topped a solid year of growth for Autodesk,” said Mark Hawkins, Autodesk Executive Vice President, and Chief Financial Officer. “In addition to diversified revenue growth in the (fourth) quarter, we generated strong cash flow from operations, record maintenance billings, and ended the quarter with a record balance for deferred revenue. We achieved significant operating margin improvement for the fiscal year despite higher than expected performance-based compensation expense due to our “over performance” on revenue for the year. With close to $1.5 billion in cash and marketable securities and no debt, our balance sheet is very strong.”

Nominal Q4 2010 Autodesk Operational Overview

Q4 2010 EMEA (Europe, Middle East, Africa) revenue was $212 million and increased 13% compared to the fourth quarter last year as reported and +22% on a constant currency basis. EMEA revenue increased 16% sequentially as reported and 14% on a constant currency basis.

Q4 2010 revenue in the Americas was $193 million and increased 15% compared to the fourth quarter last year and 7% sequentially.

Q4 2010 revenue in Asia Pacific was $123 million and increased 22% compared to the fourth quarter last year as reported and 20% on a constant currency basis. Revenue in Asia Pacific increased 7% sequentially as reported and 5% on a constant currency basis.

Q4 2010 revenue from emerging economies was $85 million, an increase of 16% compared to the fourth quarter last year as reported and 20% on a constant currency basis. Revenue from emerging economies increased 11% sequentially as reported and 10% on a constant currency basis. Revenue from emerging economies represented 16% of total revenue in nominal Q4 2010.

All constant currency calculations remove the impact of foreign currency fluctuations and any gains or losses recorded to revenue within the current period as a result of Autodesk’s hedging program.

On a product segment by product segment basis, Q4 2010 revenue from the Platform Solutions and Emerging Business segment was $181 million, an increase of 10% compared to the fourth quarter last year and an increase of 5% sequentially. Revenue from the Architecture, Engineering and Construction business segment was $162 million, an increase of 18% compared to the fourth quarter last year and 19% sequentially. Revenue from the Manufacturing business segment was a record $133 million, an increase of 23% compared to the fourth quarter last year and 14% sequentially. Revenue from the Media and Entertainment business segment was $52 million, an increase of 12% compared to the fourth quarter last year and 3% sequentially.

Cash flow from operating activities was $176 million, compared to $126 million in the fourth quarter last year, and $114 million in sequential Q3 2010.

Autodesk Full Year Fiscal 2011 Results

Full Year revenue was $1.952 billion, an increase of 14% compared to fiscal 2010. Provided three months ago, Autodesk’s revenue guidance for the Full Year Fiscal 2011 was a range from $1.924 billion to $1.944 billion.

Full Year GAAP operating margin was 14%, compared to 4% in fiscal 2010.

Full Year GAAP diluted earnings per share were $0.90, compared to diluted earnings per share of $0.25 in fiscal 2010. Provided three months ago, Autodesk’s equivalent EPS guidance for the Full Year Fiscal 2011 was a range from $0.83 to $0.86.

Full Year cash flow from operations was $541 million, an increase of 119% compared to fiscal 2010.

“After a challenging fiscal 2010, we experienced a healthy rebound in global demand for our software solutions in fiscal 2011,” continued Bass. “We made significant progress in growing our business and profitability, and our employees and partners are to be congratulated on their efforts. As we head into fiscal 2012, Autodesk is well positioned to build on the success of the past year and drive towards our 5-year targets.”

Autodesk Business Outlook

The following Autodesk statements are forward-looking and are based on its current expectations and assumptions, and involve risks and uncertainties some of which are set forth below. Autodesk states it is not able to provide 5-year targets for GAAP operating margins at this time because of the difficulty of estimating excluded GAAP items that would affect its operating margin, including charges related to stock-based compensation expense and amortization of acquisition related intangibles.

First Quarter Fiscal 2012 (a.k.a. Nominal Q1 2011)

Net revenue for the first quarter of fiscal 2012 is expected to be in the range of $510 million and $525 million. GAAP earnings per diluted share are expected to be in the range of $0.21 and $0.24.

The first quarter outlook above is said to include the impact of the two recently-announced Autodesk acquisitions, which are expected to close during the current quarter. The two acquisitions are:

1. Scaleform Corporation of Greenbelt, Maryland, a privately held user interface (UI) tools and middleware company, for approximately $36 million in cash.

2. Blue Ridge Numerics, Inc. of Charlottesville, VA, a vendor of Computational Fluid Dynamics (CFD) software, for approximately $39 million.

Autodesk’s Full Year Fiscal 2012 Outlook

Autodesk net revenue for its fiscal 2012 is expected to increase by approximately 10% compared to fiscal 2011. Autodesk anticipates fiscal 2012 GAAP operating margin will increase by approximately 220 basis points compared to fiscal 2011. Operating margin growth is anticipated to return to “typical linearity” during the year. Autodesk is not providing specific EPS guidance for fiscal 2012 at this time.

The Fiscal 2012 outlook includes the impact of the two recently announced Autodesk acquisitions (see reference to Scaleform and Blue Ridge Numerics above). The outlook also assumes an effective tax rate of approximately 24% for GAAP results.

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, AutoCAD, Inventor and Refit 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 the original documents.

On February 10, 2011 Dassault Systèmes (Euronext Paris: #13065, DSY.PA) reported its IFRS unaudited financial results for the fourth quarter and year ended December 31, 2010. {Note: “IFRS” stands for “International Financial Reporting Standards”. See Footnote [4]}

Total DS Revenue for the 2010 fourth quarter was €462.7 million [or US$629.27 million (avg XR=1.36)], up 36.49% over the 2009 fourth quarter €339.0 million [or US$501.72 million (avg XR= 1.48)]. [Q4 10 revenue was 25.42% over Q4 09 revenue measured in US$; Q4 10 revenue was 20.88% over Q3 10 measured in US$].

Total DS Net Income for the 2010 fourth quarter was €78.7 million [or US$107.03 million], up 2.34% over the 2009 fourth quarter €76.9 million [or US$113.81 million]. [Measured in US$, Q410 net income was down 5.96% from Q409 net income, due primarily to the exchange rate differential for each respective quarter].

DS Summary Highlights for the Full Year 2010

- Reached all 2010 objectives

- 2010 revenue growth of 20% to €1.56 billion (IFRS)

- 2010 new licenses revenue up 30% (IFRS)

- 2010 EPS growth of 27% to €1.82 (IFRS)

- Net operating cash flow of €408 million for 2010

- Strong sales performances & successful integration of IBM PLM

- Over 16,000 new customers in 2010

DS Summary Highlights for Q4 2010:

- Total Revenue growth of 36% to €462.7 million (IFRS)

- Software Revenue growth of 39% to €418.2 million (IFRS)

- Q4 EPS of € 0.64 or minus 2% (IFRS)

- Operating Margin of 27%

“In short, we had an outstanding finish to a great year. Our sales pipeline entering the fourth quarter strengthened further, leading to new licenses revenue growth of 33%, with all our brands and sales channels contributing to this outperformance. We had a very good level of Version 6 wins in the quarter with both new and existing customers and see an important inflection point ahead in the adoption of our Version 6 PLM 2 applications,” commented Bernard Charlès, Dassault Systèmes President and Chief Executive Officer.

“Dassault Systèmes’ full year financial performance was equally strong. New licenses revenue increased 30%, clearly demonstrating the success of the IBM PLM integration. These results highlight the broad interest in our product offer with each of our brands delivering double-digit software growth, our progress in industry diversification, with a robust year in high tech and energy in particular, and good growth in automotive and industrial equipment.”

“To date, more than 600 companies have adopted PLM 2 with our Version 6 for many reasons, and key among these, are the attractiveness of its online features, its real-time collaboration capabilities and the creation, management and protection of intellectual property which Version 6 enables. We are expanding into new domains such as embedded system management with Version 6. In this regard, we were pleased to announce today that BMW has selected Version 6 as its new platform for Embedded Systems architecture, integration and design. In fact, our customers tell us that the best way for them to power open collaboration between suppliers and partners, while protecting intellectual property, is PLM 2 with Version 6.”

“In 2011, we plan to drive even more diversification and expansion into all sectors of the global economy through our search-based applications (SBA) and our focus on innovation through communities. And, as our financial objectives indicate, 2011 should be another year of strong performance with double-digit growth in new licenses revenue.”

Note: Dassault Systèmes 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 nine-month period commencing April 1, 2010. Due to the successful 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 Dassault Systèmes software revenue was estimated at approximately €53 million in the 2009 fourth quarter and €151 million for the April to December 2009 nine-month period.

DS Q4 2010 Review

- IFRS total revenue increased 29%, principally reflecting software revenue growth of 32%.

- IFRS new license revenue increased 33% on strong contributions from the Company’s sales channels and brands.

- IFRS recurring software revenue grew 31%. The growth in recurring software revenue reflected a further improvement in subscription revenue trends and the higher level of new business activity during 2010 compared to 2009.

- Services and other revenue contributed to the growth in total revenue increasing 11%.

- IFRS PLM software revenue grew 34%.

- Mainstream 3D software revenue increased 22%. New SolidWorks commercial seats licensed increased 22% to 11,983 seats in the fourth quarter. By the way, Bertrand Sicot is now CEO of SolidWorks:

- While IFRS operating income increased 36% in the fourth quarter, IFRS earnings per diluted share decreased 2% principally reflecting a lower tax rate in the year-ago period related to non-recurring tax benefits. The IFRS operating margin was 27.0% in the 2010 fourth quarter.

DS Full Year 2010 Financial Summary

- IFRS total revenue for the entire year 2010 increased 20% on software revenue growth of 23%. The Company saw a positive dynamic in the target industries, and growth in investments by automotive and industrial equipment companies compared to 2009.

By geographic region, Europe represented approximately 45% of total revenues, the Americas 29% and Asia 26%.

- New licenses revenue increased 30%, well supported by the performances of each of the Company’s six brands.

- Recurring software revenue increased 21% and represented approximately 72% of total software revenue in 2010 compared to 73% in 2009.

- Services and other revenue increased in the second half of 2010 but for the year decreased 3%, reflecting the lower software activity in 2009.

- PLM IFRS software revenue increased 26% for the year.

- Mainstream 3D reported record software revenue of €311.5 million, with new SolidWorks commercial seats licensed up 18% to 42,205 seats, accompanied by strong sales of its product data management and simulation software. Total SolidWorks commercial and educational seats sold surpassed 1.5 million seats at the end of 2010.

- Operating income increased 39.4% to €322.0 million (IFRS) and 44.0% to €451.7 million. The operating margin also benefited from currency exchange rates and from the impact of a change in tax law that resulted in the classification as income tax of certain French taxes previously accounted for as operating expenses.

- Net income per diluted share increased 27.3% to €1.82 (IFRS) on strong operating income growth.

- Cash Flow and Other Financial Highlights: IFRS net operating cash flow was €408.3 million for 2010, compared to €297.9 million for 2009. The Company’s net financial position was €845.7 million at December 31, 2010, compared to a net financial position of €858.0 million at December 31, 2009. The Company’s cash and short-term investments and long-term debt were €1.14 billion and €293.4 million, respectively at December 31, 2010 compared to €1.06 billion and €200.0 million, respectively at the end of 2009. For 2010, the Company’s principal uses of cash included cash acquisitions totaling €462.5 million, net of cash acquired and cash dividends of €54.5 million.

DS Business Outlook

Thibault de Tersant, Senior Executive Vice President and CFO, commented, “During 2010 we achieved all our key financial and business objectives. It was a year of good execution, with the integration of IBM PLM, the expansion of our addressable markets with the acquisitions of Exalead in search-based applications and Geensoft for embedded systems management, and the investments in strengthening our infrastructure and all our teams, with our employee base growing 15% in 2010. With these results, we had a promising start for our five-year financial objectives.

“Working with customers in more than 80 countries across a diverse set of industries, Dassault Systèmes has a strong global presence. We are also focused on continuing to develop our local teams to serve our customers and are already well positioned thanks to the extraordinary value brought by our employees, representing more than 90 different nationalities, and to the leadership of Jeff Ray who was recently appointed to lead Geography Operations.

Jeff Ray

Tersant continued, “Looking forward, both our fourth quarter sales as well as the pipeline of opportunities we have entering 2011 support our view of a pattern of progressive improvement in customer investments. At the same time, we believe the overall global economic environment could continue to be volatile. Taking into account these factors, we are targeting new license revenue growth of about 15% in constant currencies, a healthy increase in our recurring revenue, even with the important level of one-time maintenance recoveries we had in 2010, and further improvement of our operating margin.”

The Company’s initial 2011 non-IFRS* financial objectives are the following:

- First quarter 2011 non-IFRS total revenue objective of about €390 to €400 million, non-IFRS operating margin of about 25% to 26% and non-IFRS EPS of about €0.53 to €0.57;

- 2011 non-IFRS revenue growth objective range of about 9% to 11%; (€1.68 to €1.71 billion based upon the 2011 currency exchange rate assumptions below);

- 2011 non-IFRS operating margin of about 29.0%;

- 2011 non-IFRS EPS range of about €2.64 to €2.75, representing growth of about 6% to 10%;

- Objectives are based upon exchange rate assumptions for the 2011 first quarter and full year of US$1.40 per €1.00 and JPY120 per €1.00.

* While the MCAD/MCAE Commentary focuses 99% on IFRS or GAAP numbers, Dassault chooses to state its objectives only on a non-IFRS basis and are subject to the Company’s cautionary statement set forth below:

The non-IFRS objectives set forth above do not take into account the following accounting elements and are estimated based upon the 2011 currency exchange rates above: deferred revenue write-downs estimated at approximately €1 million for 2011; share-based compensation expense estimated at approximately €15 million for 2011 and amortization of acquired intangibles estimated at approximately €80 million for 2011. The above objectives do not include any impact from other operating income and expense, net principally comprised of, acquisition, integration and restructuring expenses. These estimates do not include any new stock option or share grants, or any new acquisitions or restructurings completed after February 10, 2011.

Dassault Systèmes self description

As a world leader in 3D and Product Lifecycle Management (PLM) solutions, Dassault Systèmes brings value to more than 130,000 customers in more than 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 NYSE 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

On December 14, 2010 the ESI GROUP (Compartment C of NYSE Euronext Paris) reported financial results for the first nine (9) months of its 2010/2011 fiscal year, the period ending October 31, 2010.

It has been the practice of the writer of the MCAD/MCAE Commentary to call the ESI Group’s “Quarter N”, as our nominal “Quarter N+1”. Thus the ESI Group’s fiscal Q3 ending October 31, 2010 becomes our nominal Q4 2010 for consistent reporting purposes.

Thus this boxed chart that comes directly from the ESI Group December 14, 2010 news release, not only provides the revenue for “our Q4 2010” report as 16.0 million, but also it serves to confirm our arithmetic when we “calculated” ESI Group revenue for “our Q3 2010” report three months ago as 17.4 million.

MCAD Commentary Q4 2010 Q3 2010 Q2 2010 Q4 2009 Q3 2009 Q2 2009

ESI Group reported that revenue for Q4 2010 was up 15.5% compared to the same quarter last year (although 16.0 divided by 13.8 yields 15.94%), but was down 8.04% sequentially compared to Q3 2010. For the nine months, revenue this fiscal year is 49.3 vs. nine months last year of 45.0, yielding +9.55%.

The company also reports acceleration in the growth of Licenses activity (+24%); an increase in the installed base (+20%) and strong surge in New Business (+59%); all with positive exchange rate effects.

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, declared, “ESI has recorded a good third quarter of fiscal year 2010/11 (a.k.a. our Q4 2010) pursuing the trends observed since the (just-previous) second quarter of the fiscal year. Beyond a sustained growth in the Licenses installed base, amplified by positive foreign exchange rate effects, we are particularly satisfied with the buoyant increase in New Business. Indeed, the acceleration in New Licenses sales shows the increasing appeal of our solutions, which are an essential factor for increasing the competitiveness of manufacturing industries. We are confident that our growth will continue throughout the fourth quarter, which remains our most important quarter due to the strong seasonality effect of our Licensing revenues.

Q4 2010 Revenue

Revenue for the quarter totaled 16.0 million euros, reflecting a purely organic growth of +15.5% in current currency rates and +6.2% at constant foreign exchange rates. The growth in Licenses activity further accelerated, as it was up +23.5% and +12.2% by volume, with revenue totaling 10.6 million euros. It was driven on the one hand by a +19.6% increase in the installed base to 6.4 million euros with a high repeat business rate of 89.2%, and on the other hand by a surge in New Business, which jumped by +59.2% to 2.9 million euros. Pursuing the trend observed since the start of the year, Services activity remained relatively stable, increasing by +2.7% in current currencies to 5.4 million euros but down -3.6% by volume.

Nine-months Revenue

Benefiting from the good Q4 2010 performance, global activity for the first nine months recorded an increase of +9.5% in current currency rates and +3.5% at constant foreign exchange rates. Licenses revenue increased by +14.3% over the first nine months of the year, while Services revenue remained stable (+0.7%). New Business recorded buoyant growth, totaling 7.6 million euros (+41.7%), while recurrent installed base growth (+8.3%) resulted in a Repeat Business rate of 86.9% for Licenses over the first nine months, compared to 76.9% over the same period last year.

The evolution in the geographical split in revenues reflects the increasing success of the solutions marketed by ESI Group in Asia, which now represents 43.5% of 9-months’ activity, +23.4% increase over the period (+11.2% by volume).

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 January 26, 2011 PTC (NASDAQ: PMTC) reported results for its first fiscal quarter ended January 1, 2011 (a.k.a. Q4 2010 for purposes of this MCAD Commentary).

PTC delivered $266.55 million in revenue in Q4 2010, down 0.54% compared to sequential Q3 2010 revenue of $268 million, and 3.14% better than year-over-year Q4 2009 revenue of $258.43 million.

On the net income side, PTC booked $13.26 million ($0.11 EPS) in profit in Q4 2010, an improvement of $26.48 million over the sequential loss of $13.22 million in Q3 2010, but a disappointing reduction of $4.6 million compared to the $17.86 million of Q4 2009 ($0.15 EPS).

PTC Highlights from Q4 2010

Q4 2010 revenue of $266.6 million and GAAP EPS of $0.11

Q4 2010 GAAP operating margin of 6.4%

Q4 2010 EPS negatively impacted by $0.03 to $0.04 related to contract accounting treatment of the first phase of our expected multi-year engagement with Hyundai Motor Company and Kia Motors Corporation, a strategic Automotive OEM win

Q4 2010 guidance three months ago was $255 - $265 million in revenue with GAAP EPS of $0.11 to $0.15. Assumed $1.37 US$ / EURO

Guidance for entire year October 2, 2010 to September 1, 2011:

Revenue of $1,110 to $1,130 million

GAAP EPS of $0.73 to $0.78

License revenue growth target of 20% to 25% year-over-year growth

GAAP operating margin of 11% to 12%

Assumes $1.37 USD / EURO

Q4 2010 Results Commentary

James Heppelmann, president and chief executive officer, commented, "PTC had a very strong Q4 2010, with revenue above our guidance range and EPS that would have been at the high-end of the range prior to the Hyundai Motor Company and Kia Motors Corporation contract accounting treatment. As reflected in our EPS guidance for FY '11 we will save a commensurate amount throughout the balance of the year and continue to expect to deliver full year non-GAAP EPS of $1.20 to $1.25."

"We were pleased to see that our (Q4 2010) license revenue of $75.5 million included 36% year-over-year growth in Desktop license revenue, led by significant strength with several large customers and matched with broad-based strength in the SMB market," Heppelmann continued. "We are sensing the market is as excited as we are about our new Creo platform for CAD, which we expect to deliver in the third quarter. Our results were further bolstered by continued strong performance of our Enterprise PLM license revenue, though we are comparing against a year ago period where we had a handful of very large Enterprise PLM transactions in North America which drove significant (more than $20 million) upside to our license revenue performance. Overall, solid strength across the board allowed us to perform well against this comparison as total Q4 2010 revenue was up 4% on a constant currency basis and license revenue was up 2% compared to the strong year ago period."

"Our continued revenue momentum in the PLM market included transactions with 3 new strategically important 'domino' accounts during Q14 2010," Heppelmann said. "Since 2009, we have won 22 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 demonstrate that PTC is gaining share and becoming recognized as the industry leader for both our technology and product development process expertise in the PLM market. Of particular note, late in Q4 2010 we won a 2 year benchmark and began a Windchill implementation at Hyundai Motor Company and Kia Motors Corporation, one of the world's largest and fastest growing automotive OEM brands. This was PTC's most strategic sales campaign of FY'11 (Oct 2010 to Sept 2011) and we believe this important win will further bolster our momentum in the large and important automotive vertical. We continue to expect we will win a cumulative total of 30 domino accounts by the end of FY'11."

Heppelmann added, "We had 22 large deals (license + services revenue of more than $1 million) in Q4 2010, compared to 10 in Q4 2009. We believe this is an indicator of the strength of our pipeline for business opportunities with new and existing customers. During the quarter we recognized revenue from leading organizations such as Fresenius Medical, Gemalto, GKN, Lockheed Martin, Northrop Grumman, Raytheon, Schaeffler, System SPA, and Vestas Wind Systems."

Jeff Glidden, chief financial officer, commented, "From a profitability standpoint, while we outperformed our revenue targets, one EPS result was adversely impacted in Q4 2010 by approximately $0.03 to $0.04 related to contract accounting treatment of the first phase of our expected multi-year engagement with Hyundai Motor Company and Kia Motors Corporation, for which we did not recognize any revenue during the quarter."

"We ended the quarter with $183 million of cash, which was negatively impacted by approximately $48 million related to a previously announced litigation settlement in Japan," continued Glidden.

Outlook Commentary

"Based on the market momentum we are seeing, the strength of our pipeline, our sales capacity, many important product initiatives such as the launches of Windchill 10 and Creo, and 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. "We remain confident and committed to achieving our goal of a 20% (non-GAAP) EPS CAGR through 2014."

"For calendar Q1 2011 we are providing guidance of $260 to $270 million in revenue," Glidden added. "From a revenue perspective, we are expecting approximately 20% to 25% year-over-year growth in our license revenue in Q1 2011, with our combined services and maintenance businesses up in the mid-single digit range resulting in high single- to low double-digit year-over-year growth in total revenue." For Q1 2011 the GAAP EPS target is $0.11 to $0.15. The Q1 2011 guidance assumes a GAAP tax rate of 25% and 122 million diluted shares outstanding.

Glidden continued, "Looking to the full year FY'11, we are continuing to target revenue growth of 10% to 12%. We are expecting license revenue growth of approximately 20% to 25%, services revenue growth of approximately 10% and maintenance revenue growth of approximately 5%. We are committed to achieving our non-GAAP EPS target of $1.20 to $1.25, while balancing investments in future growth with our commitment to 20% non-GAAP EPS growth." For FY'11 the GAAP EPS target is $0.73 to $0.78.

PTC self description

PTC provides discrete manufacturers with software and services to meet the globalization, time-to-market and operational efficiency objectives of product development. Using the company's PLM and CAD and related solutions, organizations in the Industrial, High-Tech, Aerospace/Defense, Automotive, Retail/Consumer and Life Sciences industries are able to support key business objectives such as reducing costs and shortening lead times while creating innovative products that meet customer needs and comply with industry regulations.

Stock Prices and Market Caps

The stock prices of the G5 MCAD/MCAE vendors prospered during the last three months indicated in Table 3 below, commensurate with the vendors’ improved performances in revenues and earnings (along with other more esoteric factors).

All the G5 vendors save one enjoyed double-digit percentage rises in their Market Caps, with Autodesk leading the way with +21% improvement. Autodesk overtook Dassault in total Market Capitalization during that three month period, becoming, well, the MCAD company with the largest Market Cap (on that date)!

During the same three months, the NASDAQ Composite Index had risen 9.36%, from 2543.12 to 2781.05.

Taken together, the total Market Capitalization of the G5 stood at a formidable $27 Billion on February 24, 2011, up a tidy 15% since November 24, 2010. That ain’t chump change, folks!

The only EDA or Electronics IP company that comes close to the MCAD leaders in Market Capitalization, is Arm Holdings plc of Cambridge, England.

The FX rates used in the Euro to $ figures shown in Table 3 were taken from for the dates in question. The numbers marked with the “superscript 4” are educated estimates.

Recent MCAD/MCAE News Highlights

Dr. Ajei S. Gopal Named to ANSYS Board of Directors

Dr. Ajei S. Gopal

On February 23, 2011 ANSYS, Inc. (NASDAQ: ANSS) announced that Dr. Ajei S. Gopal, executive vice president, Technology and Development Group at CA Technologies, had been appointed to the ANSYS Board of Directors. He also will serve on the ANSYS Board's Audit Committee.

"It's a great pleasure to welcome Ajei to our Board of Directors," said Peter J. Smith, executive chairman of ANSYS. "With his accomplished history in the software and information technology domains, he brings experience and perspective that will be of great value to ANSYS."

Peter J. Smith

At CA Technologies, Gopal is responsible for development of a broad portfolio of IT management and security products and solutions, and oversees a global team of over 4,000 professionals. Before joining CA in 2006, he was executive vice president and chief technology officer for Symantec Corporation, where he earlier also had responsibilities for mergers and acquisitions.

Prior to Symantec, Gopal served as CEO and board member of ReefEdge Networks, Inc., a wireless LAN systems company that he cofounded. He spent several years at IBM, initially at IBM Research and later as chief technology officer of IBM's Pervasive Computing Division. He began his career as a member of the technical staff in the Applied Research Division at Bell Communications Research.

"I am honored to be asked to join the ANSYS Board and share the company's passion for pushing the limits of technology so customers can turn concepts into successful, innovative products," said Gopal. "In a world where technology investments are challenged on a daily basis, ANSYS has a 40-year history of driving proven results for its customers. I am looking forward to working with the Board of Directors and the senior management team."

Gopal is the author of more than twenty issued U.S. patents and numerous publications. He received a bachelor's degree in engineering from the Indian Institute of Technology in Mumbai and a doctorate in computer science from Cornell University.

Ajei draws on his more than 25 years in the IT industry as a business leader, technical visionary and entrepreneur to lead the Technology and Development Group, which plans, develops and delivers the innovative product offerings that keep CA Technologies at the forefront of the IT industry. Ajei and his team work with the Customer Solutions Group and Worldwide Sales and Operations to ensure that its products and solutions meet evolving customer needs, and are delivered effectively to markets around the world.

As a member of CA Technologies Executive Management Team, Ajei helps define and ensure execution of the company's strategy.

On May 17, 2010 CA Technologies EVP Ajei Gopal outlined the future of IT as organizations become more cloud connected and industry goes through the first major IT paradigm shift of the 21st Century. Speaking to thousands of CIOs, IT executives and IT professionals in a morning keynote at CA World 2010, Gopal explained how the cloud transforms the way to manage and secure information technology.

”Instead of being a monolithic supplier of technology services to the business, the IT department can become the manager of a dynamic supply chain of internal and external resources that delivers services to the business and its internal and external clients,” Gopal said. “When that happens, all rhetoric about aligning IT with the business becomes irrelevant because now – for many organizations – IT is the business. That’s the paradigm shift. We’re at the dawn of a new era. A set of business needs – increased agility, cost effectiveness, environmental sustainability – is coming together with a set of innovations in technology and delivery models to enable another true watershed moment in IT. And like the paradigm shifts of the past – mainframe, distributed and Internet – those organizations that embrace today’s paradigm shift will prosper,” Gopal said.

Autodesk Names Steve Blum to Lead

Worldwide Sales and Services Organization

On February 14, 2011 Autodesk, Inc. announced the appointment of Steve Blum to senior vice president, worldwide sales and services, for Autodesk. Reporting to the company’s President and CEO, Carl Bass, Mr. Blum is now responsible for the execution of sales and services of Autodesk’s entire portfolio of leading 3D design, engineering and entertainment software.

Steve Blum

“Steve brings deep knowledge of the company and excellent business and leadership acumen to his new role,” said Mr. Bass. “He has built strong relationships with our partners and customers. We’re all very excited to welcome Steve to his new role and look forward to his continued contributions to Autodesk.”

Mr. Blum has been with Autodesk for eight years, heading up Autodesk’s Americas Sales organization. In that capacity he has been responsible for driving sales, channel strategy, sales execution and field marketing throughout the Americas. Under Mr. Blum’s leadership, the Americas revenues more than doubled. He also spearheaded the Autodesk Assistance Program, which has provided tens of thousands of out-of-work architects and engineers with software and training to maintain their skills in a down economy. Just prior to Autodesk, Mr. Blum was executive vice president of sales and account management for Parago, Inc.

On December 14, 2010 Autodesk had announced that Ken Bado, executive vice president sales and services, would leave Autodesk to pursue other opportunities.

Ken Bado

“I want to acknowledge and thank Ken for the significant contributions he has made to Autodesk’s success during his eight years with the company,” said Carl Bass, Autodesk president and CEO. “Over this period, Ken has installed a strong and effective senior leadership team, strengthened relationships with our customers and channel partners, and provided critical support for our sales initiatives.”

Autodesk said in December that Mr. Bado would transition his responsibilities during calendar Q1 2011 and that a search for his replacement had been initiated. That search resulted in the selection of Mr. Blum.

The writer of this MCAD/MCAE Commentary is acquainted with both Mr. Bado and Mr. Blum, having worked with them in the 90’s at Mentor Graphics Corporation. The two men were mentioned in the March 2010 MCAD Commentary as follows:

On February 23, 2010 Autodesk announced that two of its executives were named CRN Channel Chiefs for 2010: Ken Bado, executive vice president of Sales and Services, and Steve Blum, senior vice president, Americas Sales. CRN, the flagship publication of CMP Channel, selected the Autodesk executives because of their investment in partner success and innovative channel partner programs. This past year, Bado and Blum continued to expand Autodesk channel partner programs, which now encompass 1,900 partners across the globe.

Once his remaining duties at Autodesk are completed, rumor has it that Mr. Bado will become associated with the management team of a privately-held company in the Silicon Valley.

We wish both men continued success in their respective endeavors.


Try clicking on the URL above, or copy and paste this URL into your browser, to enjoy a brief video clip about fresh water becoming a vital resource in danger. As the world starts to question the future of “our blue gold,” some sharp minds have come up with a slightly crazy idea: what if icebergs, gigantic freshwater reservoirs that they are, became the solution to the drinking-water shortage problem? Using its advanced technology, Dassault Systèmes leads the investigation and simulates the feasibility of this unconventional project.

Premium German Automaker, BMW, Implements Dassault Systèmes’ V6 PLM Solutions as New Platform for Embedded Systems Architecture, Integration and Design. In a separate press release, Dassault Systèmes announced that BMW had selected the DS V6 PLM Solutions to develop the future electrical, electronics and embedded software (E/E) architecture of BMW cars to thousands of engineers.

ENOVIA V6 Collaborative Innovation Solution is Helping LG Electronics to Enhance and Integrate Collaboration and Product Data Management. On November 3, 2010 Dassault Systèmes announced that LG Electronics (LG) had successfully adopted Dassault Systèmes’ ENOVIA V6 solution. Designed to enhance and integrate collaboration and product data management, LG’s Mobile Communications (MC) Company’s deployment of ENOVIA V6 has been implemented in its R&D, manufacturing and purchasing processes by LG CNS, an IT consulting and Solutions Company, and Dassault Systèmes. Starting with LG’s MC business unit, ENOVIA V6 will be implemented enterprise-wide to support the entire product development process.

Bell Helicopter Improves Collaboration and Time-to-Market with Dassault Systèmes V6 PLM Platform. On November 9, 2010 Dassault Systèmes announced that Bell Helicopter, a Textron company, is using its V6 PLM platform to improve collaboration and decrease the amount of time it takes to bring a new helicopter to market. As part of an effort to improve business processes and update systems across the company, Bell Helicopter is leveraging Dassault Systèmes’ full range of brands, including ENOVIA V6, CATIA V6, DELMIA V6, 3DVIA V6, and SIMULIA V6. The project will eventually be deployed to 6,000 users.

Apparel Manufacturer Mammut Sports Group AG Adopts Dassault Systèmes’ ENOVIA V6 Solution. On November 18, 2010 Dassault Systèmes announced that Switzerland-based Mammut Sports Group AG had selected Dassault Systèmes’ ENOVIA V6 solution to manage its development processes from initial product design through to sourcing, manufacturing and sales. The company needed to group information related to all its products in one database and replace manual, time-consuming methods for data search and consolidation that left room for error when communicating internally and with external suppliers.

ESI CFD Multi-physics Seminar March 15, 2011

Come discover how your simulation needs can be met with ESI’s latest solutions:


March 15, 2011


Ann Arbor, MI

Contact Email

Email Contact

Contact Phone

(248) 381-8040


(lunch will be provided)

ESI understands the increasingly important role that multi-physics plays in R&D and in product design, and the need for realistic simulation solutions.

Join ESI for a seminar on multi-physics modeling that will show how to unlock research and product innovation, while using real world examples – not simplified concepts. ESI experts will guide attendees through the theory and application of an industrial solution that takes advantage of the ESI ACE+ Suite of simulation tools.

ACE+ Suite: Multi-physics Solution

The emphasis of this event will be on multi-physics applications; however, those interested in Computational Fluid Dynamics (CFD) simulation in any field are welcome.


University of Michigan Duderstadt Center
2281 Bonisteel Boulevard
1180 Teleconference Room
Ann Arbor MI 48109-2094
Phone: (734) 763-3266

PTC’s PLM Momentum Accelerates As Automotive Industry Evolves

On February 14, 2011 PTC® (NASDAQ: PMTC) announced plans to establish a Research and Development Center of Excellence focused on the specific PLM requirements of the automotive industry, including the requirement for globalization, the desire for an open PLM platform, the opportunity to optimize service operations, and the need for tighter integration between CAD, BOM and the Digital Mock-Up for rapidly changing vehicle configurations. The R&D center is located in Korea.

"Automotive OEMs and supply chain participants are facing an expanding set of business and technical complexities that include evolving supply chain relationships, increasingly complex vehicles with more electronics and software; rapidly developing regulatory compliance-related requirements, and increasing consumer quality, functional and time-to-market demands," said Peter Bilello, President of CIMdata, a leading global PLM management consulting and research firm.

Peter Bilello

"The good news is that PLM-enabling solutions are seen by many in the global automotive industry as critical to addressing these issues."

Jim Heppelmann, President and CEO of PTC, commented, "We are seeing a significant amount of generational turnover of PLM technology in the automotive industry. Over the past 12 months, PTC has partnered with leading passenger and heavy vehicle OEMs such as Hyundai Motor Company and Kia Motors Corporation, and Volvo Group, as well as major automotive suppliers such as Continental, Schaeffler, HARMAN Automotive, and Cummins to help them implement their next-generation product development systems. Each of these companies intends to leverage our core Windchill® PLM software as the backbone of their product development technology platform. These partnerships have contributed greatly to our momentum in the automotive vertical, characterized by more than 70% Windchill revenue growth and four ‘domino' wins in the last year."

"We believe that automotive companies who are selecting Windchill are choosing to leapfrog their competition in terms of PLM technology and product development process sophistication," continued Heppelmann. "Windchill is the fastest growing PLM product in the market, and equally important, PTC has the professional services scale and expertise to help companies implement and extract the most value from their PLM technology. PTC is committed to helping automotive companies as they refresh and expand their PLM technology solutions into enterprise-class business solutions focused on enabling thousands of users across the value chain to collaborate and more effectively participate in the product development process. We believe our new Automotive PLM R&D Center of Excellence will continue to enhance our presence and momentum in the automotive vertical."

PTC's enterprise 3D design, product data management and collaboration solutions customers in the automotive industry include 8 of the top 10 powertrain suppliers and 3 of the top 5 automotive OEMs.

Hyundai Motor Company and Kia Motors Corporation Select PTC’s Windchill As Its Enterprise PLM Solution

PTC’s PLM suite of products to enable significant vehicle development process improvements for global automotive OEM

On January 26, 2011 PTC® announced that Hyundai Motor Company and Kia Motors Corporation, the fifth-largest and fastest-growing global automobile manufacturer by market share, has selected PTC as its strategic partner for its enterprise PLM initiative.

Following an extensive two-year benchmark testing and selection process, Hyundai Motor Company and Kia Motors Corporation selected PTC's Windchill® as its enterprise PLM solution to consolidate multiple existing systems into a single platform for managing critical product data and related processes for vehicle development. Hyundai Motor Company and Kia Motors Corporation is adopting the Windchill PLM system in its core R&D groups and intends to extend use of the solution through its internal and external value chain.

Dr. H. S. Lee, Vice Chairman of HKMC's R&D center, said, "In order to support our ambitious growth plans, we have prioritized the need for a faster and more efficient environment to facilitate global concurrent product development and support the rapidly changing requirements for our vehicle programs. Two years ago we began looking at all available PLM solutions to meet our requirements. We selected and procured with PTC because of Windchill's impressive results in our comprehensive benchmarking process, PTC's proven track record as an effective partner in powertrain development, and its growing strength in the automotive industry."

The first phase of delivery, which has already begun, establishes a system of record for the complete vehicle -- the engineering Bill of Materials -- and for Change Management. Phase I also includes CATIA data management and a Digital Mock-Up (DMU) environment. The system gradually is expected to be expanded globally.

"PTC is proud to work with Hyundai Motor Company and Kia Motors Corporation, one of the largest, fastest-growing and most important brands in the global automotive industry," said Jim Heppelmann, President and CEO of PTC. "As a global automotive OEM, Hyundai Motor Company and Kia Motors Corporation can now benefit from a single source for accessing data and managing processes across vehicle design programs in order to quickly respond to changes, to address the unique needs of global markets, and to ensure quality through production in many countries."

Heppelmann added: "We are very excited that Hyundai Motor Company and Kia Motors Corporation has chosen us to help it move forward in what is a very dynamic and demanding industry. This selection clearly demonstrates PTC's PLM momentum in the automotive sector."

PTC solutions for automotive needs are designed to meet the product design and product life cycle management needs of both OEMs and suppliers in the automotive industry. PTC's customers in the automotive industry utilizing PTC's enterprise 3D design, product data management and/or collaboration solutions include eight of the Top 10 power train suppliers and three of the Top Five automotive OEMs.

Aston Martin to Standardize Its Global Sports Car Development with Siemens PLM Software

Adoption Clearly Emphasizes Siemens PLM Software’s Automotive Market Leadership and Underscores the Importance of Its Open Strategy

On February 1, 2011 Siemens PLM Software, a business unit of the Siemens Industry Automation Division and a leading global provider of product lifecycle management (PLM) software and services, announced that Aston Martin is standardizing its global sports car development process using NX™ software for integrated computer-aided design, manufacturing and engineering analysis (CAD/CAM/CAE) and Teamcenter® software to manage their product and process knowledge. This company-wide commitment will enable Aston Martin to drive productivity improvements, common processes and enhanced global collaboration for product design and development.

Aston Martin Rapide

The growing sophistication of design and development has forced numerous automotive original equipment manufacturers (OEMs) to evaluate the systems currently in place to ensure they are using best-in-class technology. Aston Martin began its extensive and ongoing competitive PLM technology evaluation two years ago. The decision to migrate from its current technology to NX and Teamcenter is critical to its mission of continuing to produce some of the world’s greatest sports cars.

“The automobile industry is undergoing enormous transformation both in terms of technology and business operations. The increasing complexity of vehicles and changing economic conditions are forcing automakers to re-evaluate their existing PLM applications to align with the best available in the market,” said Sanjeev Pal, PLM analyst at IDC Corp.

“Luxury automotive manufacturers like Aston Martin must make their product decisions earlier and more efficiently in today’s marketplace. We are pleased that our technology has been selected for the advanced product planning through detailed engineering processes which are critical to increased productivity,” said Chuck Grindstaff, president and chief technology officer, Siemens PLM Software. “It’s truly a must for OEMs to be able to manage increased sophistication across all systems in a car to ensure quality while reducing time-to-market.”

Check out this YouTube video (after the TV image is displayed, click once on the tiny arrow in the middle of the screens. Once you have seen enough, don’t forget to come back here to finish up!).

Aston Martin’s decision to adopt Siemens PLM Software’s technology as the corporate-wide PLM standard highlights the importance of an open PLM environment to enhance innovation and manage increased sophistication. It also demonstrates the scalability of Siemens PLM Software solutions to match the diverse deployment requirements of the full spectrum of automotive OEMs.

Siemens PLM Software’s Automotive Leadership

Siemens PLM Software is the leading supplier to automotive OEMs in all areas of product development and manufacturing where PLM software is applicable. Siemens PLM Software’s industry-leading technology is used by automakers and suppliers to collaborate, plan, design and validate the development and manufacturing of vehicles. The solutions satisfy the critical needs of leading automakers for managed collaboration across complex engineering functions and throughout the extended supply chain. By breaking down barriers between engineering functions and all other disciplines associated with the product lifecycle, and by providing real-time access to design, analysis and simulation, Siemens PLM Software has enabled efficiencies and key innovations throughout the industry.

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.

MSC.Software and Defiance Technologies Partner to Deliver Advanced Engineering Software and Services

MSC.Software and Defiance Technologies Partner to Deliver Advanced Engineering Software and Services

On February 24th, 2011 MSC.Software Corporation announced that Defiance Technologies in India has partnered with MSC.Software and will utilize its suite of multidiscipline engineering software solutions to help customers improve design development while minimizing software costs.

As a leading provider of high-end engineering services solutions, Defiance believes in proven engineering simulation tools that help exceed the expectations of its customers. Its engineering, testing and manufacturing services are offered globally. While traditional engineering services have been a key offering of the company, Defiance has moved up the value pyramid by offering advanced engineering consulting solutions and program management for global manufacturing customers dealing with increasingly complex problems.

"As a premier engineering solutions provider, we work with a varied customer base across industries. The company is set to play a significant role at the top of the value pyramid as a system integrator for sub-system and product development," said Mr. Subu D. Subramanian, Managing Director & CEO at Defiance Technologies. "Our partnership with MSC.Software allows us to access industry-standard engineering analysis tools and provides more flexibility to respond to our customers' complex analyses requirements."

Today, companies are insisting on more ROI for their engineering software investments. MSC.Software and Defiance Technologies deliver against this imperative by empowering customers to leverage proven solutions that will reduce costs and drive employee productivity.

"The partnership with Defiance Technologies extends our commitment in the engineering consulting segment and offers customers unprecedented solutions from a leading provider of consulting services," said Mr. Eric Favre, Vice President at MSC.Software, Asia Pacific.

"By combining MSC.Software tools and Defiance Technologies services, the partnership provides one of the strongest portfolios of engineering analysis solution offerings in India today."

About Defiance Technologies

Defiance Technologies, a Hinduja Group Company, is a leading provider of Engineering, ERP and IT services to global customers leveraging the Global Delivery Model. Founded in 1976 in USA, Defiance was later acquired by the Hinduja Group and has a long history of serving top global companies with over 120 global clients including 30 of the Fortune 500 companies. Headquartered at Chennai, India, Defiance has world class development centers at Chennai and Bangalore in India, and state-of-the-art engineering and validation facilities at Troy and Westland, Michigan. Defiance has business offices in USA, Europe, Middle East, South Africa and India. For more information, please visit

About MSC.Software

MSC.Software is the worldwide leader of multidiscipline simulation solutions that help companies improve quality, save time and reduce costs associated with designing and testing manufactured products. MSC.Software works with thousands of companies worldwide to develop better products faster with simulation technology, software, and services. MSC.Software is a global company with offices in 20 countries. For additional information about MSC.Software's products and services, please visit

The MSC.Software corporate logo, Simulating Reality, Adams, Dytran, Easy5, Marc, MD Adams, MD Nastran, Patran, Mentat, OpenFSI, MSC, MSC.Masterkey, MSC Nastran, Mvision, SimDesigner, SimManager, and SimXpert are trademarks or registered trademarks of the MSC.Software Corporation in the United States and/or other countries. NASTRAN is a registered trademark of NASA. All other trademarks belong to their respective owners.


[1] Footnote: The term “Obama’s Comeback” refers to the opening paragraphs of the January 10, 2011 EDA WEEKLY:

... an article that began as follows:

“Despite the tragedies of 2010 (Haitian Earthquake, Deepwater Horizon explosion & BP Gulf Oil Spill, ongoing high unemployment, the weakening of U.S. national Democratic influence on (election day) November 2, and other disturbing events too numerous to mention), around these parts we enter the new year (of 2011) buoyed by “Obama's Comeback” during the last month of 2010:

Unemployment compensation! Gay rights! Food safety! Judicial appointments! Arms control! Health care for 9/11 responders!

and of equal importance to our local long-term euphoria:


[2] Footnote: Please click on this URL to read a Frank Rich article from the Sunday February 27, 2011 edition of the New York Times:

[3] Footnote: Excerpt from ANSYS 10-K:

ANSYS, Inc. develops and globally markets engineering simulation software and services widely used by engineers, designers, researchers and students across a broad spectrum of industries and academia, including aerospace, automotive, manufacturing, electronics, biomedical, energy and defense.

Headquartered at Southpointe in Canonsburg, Pennsylvania, the Company and its subsidiaries employ approximately 1,660 people as of December 31, 2010 and focus 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 distributes its ANSYS ® suite of simulation technologies through a global network of independent resellers and distributors (collectively, channel partners) and direct sales offices in strategic, global locations

Given the integrated approach to the multi-discipline problem-solving needs of the Company’s customers, a single sale of software may contain components from multiple product areas and include combined technologies.

The Company’s product portfolio consists of the following:

ANSYS Workbench

ANSYS Workbench is the framework upon which the Company’s suite of advanced engineering simulation technology is built. The innovative project schematic view ties together the entire simulation process, guiding the user through complex multiphysics analyses with drag-and-drop simplicity. With bi-directional computer-aided design (“CAD”) connectivity, an automated project level update mechanism, pervasive parameter management and integrated optimization tools, the ANSYS Workbench delivers productivity, enabling Simulation Driven Product Development .


The Company’s multiphysics product suite combines solver technology for all physics disciplines with an open and adaptive ANSYS Workbench environment, flexible coupled-physics simulation methods and parallel scalability. Together these technologies form the foundation for comprehensive multiphysics simulation capable of solving complex engineering challenges.

Structural Mechanics

The Company’s structural mechanics product suite offers simulation tools for product design and optimization that increase productivity, minimize physical prototyping and help deliver better and innovative products in less time. These tools tackle real-world analysis problems by making product development less costly and more reliable. In addition, these tools have capabilities that cover a broad range of analysis types, elements, contacts, materials, equation solvers and coupled physics capabilities all targeted toward understanding and solving complex design problems.

Fluid Dynamics

The Company’s fluid dynamics product suite offers modeling of fluid flow and other related physical phenomena. Fluid flow analysis capabilities provide all the tools needed to design and optimize new fluids equipment and to troubleshoot already existing installations. The fluid dynamics product suite contains general purpose computational fluid dynamics software and additional specialized products to address specific industry applications.

Explicit Dynamics

The Company’s explicit dynamics product suite simulates short, high deformation, large strain, fracture or complete material failure applications. This product suite is ideal for simulating physical events that occur in a short period of time and may result in material damage or failure. These types of events are often difficult or expensive to study experimentally.


The Company’s electromagnetics product suite provides electromagnetic field simulation software used by engineers to design high-performance electronic and electromechanical products. The software is used to streamline the design process and predict performance of mobile communication and internet-access devices, broadband networking components and systems, integrated circuits and printed circuit boards, as well as electromechanical systems such as automotive components and power electronics equipment prior to building a prototype.

Simulation Process & Data Management

ANSYS Engineering Knowledge Manager (“ANSYS EKM”) is a comprehensive solution for simulation-based process and data management challenges. ANSYS EKM provides solutions and benefits to all levels of a company and enables an organization to address the critical issues associated with simulation data, including backup and archival, traceability and audit trail, process automation, collaboration and capture of engineering expertise, and intellectual property protection.


The Company’s academic product suite provides a highly scalable portfolio of academic products based on several usage tiers: associate, research and teaching. Each tier includes various noncommercial products that bundle a broad range of physics and advanced coupled field solver capabilities. The academic product suite provides entry-level tools intended for class demonstrations and hands-on instruction. This academic product suite also provides flexible terms of use and more complex analysis suitable for doctoral and post-doctoral research projects. The Company also provides a low-cost, problem-size-limited product suitable for student use at home.

High-Performance Computing

The Company’s high-performance computing (“HPC”) product suite enables enhanced insight into product performance and improves the productivity of the design process. The HPC product suite delivers cross-physics parallel processing capabilities for the full spectrum of the Company’s simulation software by supporting structural, fluids, thermal and electromagnetic simulations in a single HPC solution. This product suite decreases the turnaround time for individual simulations, allowing users to consider multiple design ideas and make the right design decisions early in the design cycle.

Geometry Interfaces

The Company offers comprehensive geometry handling solutions for engineering simulation in an integrated environment with direct interfaces to all major CAD systems, support of additional readers and translators, and an integrated geometry modeler exclusively focused on analysis.


The Company makes significant investments in research and development and emphasizes accelerated new integrated product releases. The Company’s product development strategy centers on ongoing development and innovation of new technologies to increase productivity and to provide engineering simulation solutions that customers can integrate into enterprise-wide product lifecycle management systems. The Company’s product development efforts focus on extensions of the full product line with new functional modules, further integration with CAD and product lifecycle management (“PLM”) products, and the development of new products. The Company’s products run on the most widely used engineering computing platforms and operating systems, including Windows, Linux and most UNIX workstations.

During 2010, the Company completed the following major product development activities and releases (in chronological order):

The release of version 12.1 of HFSS software, which helps engineers design, simulate and validate the behavior of complex high-performance radio frequency, microwave and millimeter-wave devices in next-generation wireless devices, defense communication systems and consumer electronics. The release introduces a new integral equation electromagnetic solver option, which is effective for large-scale radiating and scattering simulation studies. The new solver computes the currents on the surfaces of objects and uses those currents to accurately determine the radiated and/or scattered fields. Users of this latest version of HFSS software can achieve a reduction in development time and costs while at the same time realizing increased reliability and design optimization.

The release of version 6.0 of Ansoft Designer ® with Solver on Demand ® , which enables electronic design engineers to quickly and accurately analyze signal integrity, power integrity and electromagnetic interference problems from a single schematic- and layout-based environment. This release enables high-speed electronics and RF/microwave designers to access industry-leading field and circuit simulation tools, while designing electronic packages and printed circuit boards (PCBs), early in the design cycle before manufacturing costs are incurred. The Solver on Demand technology offers the ability to predict how high-frequency electromagnetic components affect the integrated circuits.

The release of version 13.0 of ANSYS ® software, which incorporates valuable capabilities that compress design cycles, optimize product performance across multiple physics, maximize the accuracy of virtual prototypes and automate the simulation process. The software features an electromagnetic transient solver that produces higher-fidelity results in dynamic simulation environments. The release also facilitates the collaboration of multiple users with different engineering specialties to exchange data and develop real-world simulations that incorporate multiphysics. The software suite can provide speedup ratios that are greater than previous software releases. Complex multiphysics simulations can be accomplished more quickly and efficiently, speeding up product development and market launch initiatives.

The Company’s total research and development expenses were $89.0 million, $79.9 million and $71.6 million in 2010, 2009 and 2008, respectively, or 15.3%, 15.4% and 15.0% of total revenue, respectively. As of December 31, 2010, the Company’s product development staff consisted of approximately 530 full-time employees, most of whom hold advanced degrees and have industry experience in engineering, mathematics, computer science or related disciplines. The Company has traditionally invested significant resources in research and development activities, and intends to continue to make significant investments in this area, particularly as it relates to expanding the capabilities of its flagship products and other products within its broad portfolio of simulation software, evolution of its ANSYS ® Workbench platform, and ongoing integration.


The Company’s employees generally perform product development tasks according to predefined quality plans, procedures and work instructions. Certain technical support tasks are also subject to a quality process. These plans define for each project the methods to be used, the responsibilities of project participants and the quality objectives to be met. The majority of software products are developed under a quality system that is certified to the ISO 9001:2008 standard. The Company establishes quality plans for its products and services, and subjects product designs to multiple levels of testing and verification in accordance with processes established under the Company’s quality system.


The Company distributes and supports its products through a global network of independent channel partners, as well as through its own direct sales offices. This network provides the Company with a cost-effective, highly specialized channel of distribution and technical support. It also enables the Company to draw on business and technical expertise from a global network, provides relative stability to the Company’s operations to offset geography-specific economic trends and provides the Company with an opportunity to take advantage of new geographic markets. Approximately 27% in 2010, 26% in 2009 and 30% in 2008 of the Company’s total revenue was derived through the indirect sales channel.

The channel partners sell ANSYS products to new customers, expand installations within the existing customer base, offer training and consulting services, and provide the first line of ANSYS technical support. The Company’s channel partner certification process helps to ensure that each channel partner has the ongoing capability to adequately represent the Company’s expanding product lines and to provide an acceptable level of training, consultation and customer support.

The Company also has a direct sales management organization in place to develop an enterprise-wide, focused sales approach and to implement a worldwide major account strategy. The sales management organization also functions as a focal point for requests to ANSYS from the channel partners and provides additional support in strategic locations through the presence of direct sales offices. A Vice President of Worldwide Sales and Support heads the Company’s sales management organization.

During 2010, the Company continued to invest in its existing domestic and international strategic sales offices. In total, the Company’s direct sales offices employ approximately 430 full-time employees who are responsible for the sales, marketing initiatives and administrative activities designed to support the Company’s overall revenue growth and expansion strategies.

The Company’s products are utilized by organizations ranging in size from small consulting firms to the world’s largest industrial companies. No single customer accounted for more than 10% of the Company’s revenue in 2010, 2009 or 2008.


The Company has established and continues to pursue strategic alliances with advanced technology suppliers, and marketing relationships with hardware vendors, specialized application developers, and CAD and PLM providers. The Company believes that these relationships facilitate accelerated incorporation of advanced technology into the Company’s products, provide access to new customers, expand the Company’s sales channels, develop specialized product applications and provide direct integration with leading CAD, electronic design automation (“EDA”), product data management and PLM systems.

The Company has technical and marketing relationships with leading CAD vendors, such as Autodesk, Dassault Systèmes, Parametric Technology Corporation and Siemens Product Lifecycle Management Software Inc., to provide direct links between products. These links facilitate the transfer of electronic data models between the CAD systems and ANSYS products. In addition, the Company has an agreement with Dassault Systèmes under which ANSYS fluid flow modeling technology is embedded in the CATIA V5 product lifecycle management environment. This fully integrated product, FLUENT for CATIA V5, enables model building, computation, post-processing and data management within the analysis infrastructure of CATIA V5.

Similarly, the Company maintains marketing and software development relationships with leading EDA software companies, including Cadence, Synopsys and Mentor Graphics. These relationships support transfer of data between electronics design and layout packages and the ANSYS electronics simulation portfolio.

The Company has established relationships with leading suppliers of computer hardware, including Intel, AMD, Microsoft, Hewlett-Packard, Sun Microsystems, IBM, Dell, Cray, Panasas, QLogic, Mellanox, Platform Computing and other leading regional resellers and system integrators. These relationships provide the Company with joint marketing opportunities, such as advertising, public relations, editorial coverage and customer events. In addition, these alliances provide the Company with early access and technical collaboration on new processors and related computing technologies, ensuring that the Company’s software products are certified to run effectively on the most current hardware platforms. Key 2010 milestones included incorporation of the latest Intel compilers and math libraries, resulting in significant performance boosts, and initial support for acceleration of computations using General-Purpose Graphical Processing Units.

The Company’s Enhanced Solution Partner Program actively encourages specialized developers of software solutions to use the Company’s technology as a development platform for their applications and provides customers with enhanced functionality related to their use of the Company’s software. With over 100 active enhanced solution partnerships, spanning a wide range of technologies, including electronics, mechanical simulation, fluid simulation, acoustics, turbomachinery and CAD, this partner ecosystem extends the depth and breadth of the Company’s technology offerings. During 2010, the Company focused on the integration of partner solutions in the Workbench environment, with improved interoperability for solutions from DYNARDO GMBH, JAHM Software, Inc., Materiality, L.L.C., Red Cedar Technology, SpaceClaim Corp., and Vistagy, Inc .

The Company has a software license agreement with Livermore Software Technology Corporation (“LSTC”) whereby LSTC has provided LS-DYNA software for explicit dynamics solutions used in applications such as crash test simulations in automotive and other industries. Under this arrangement, LSTC assists in the integration of the LS-DYNA software with the Company’s pre- and post-processing capabilities and provides updates and problem resolution in return for royalties from sales of the ANSYS/LS-DYNA combined product.


The Company believes that the principal factors affecting sales of its software include ease of use, breadth and depth of functionality, flexibility, quality, ease of integration with other software systems, file compatibility across computer platforms, range of supported computer platforms, performance, price and total cost of ownership, customer service and support, company reputation and financial viability, and effectiveness of sales and marketing efforts.

The Company continues to experience competition across all markets for its products and services. Some of the Company’s current and possible future competitors have greater financial, technical, marketing and other resources than the Company, and some have well established relationships with current and potential customers of the Company. The Company’s current and possible future competitors also include firms that have or may in the future elect to compete by means of open source licensing. These competitive pressures may result in decreased sales volumes, price reductions and/or increased operating costs, and could result in lower revenues, margins and net income.

[4] 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?


Comments? Feedback? Tell us what you think about this topic, or share any additional information you may have on the subject! Submit your comments to: Email Contact

The Author of the March 2011 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 EDA WEEKLY articles approximately every four weeks 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-four (94) 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