Commentary: Will Partnership with IBM/Dassault Transform RAND Worldwide?

by Ira Breskin

Rand Worldwide is making the most of its independence.

The large Canadian system integrator and value added reseller that specializes in installing MCAD systems is overjoyed about the deal announced last Monday making it a preferred distributor of Dassault Systemes' PLM products.

"This is a huge, huge opportunity for Rand," said Frank Baldesarra, Rand president, co-founder and chief operating officer.

Rand can align with Dassault because its once preferred distributor agreement with competing Parametric Technology Corp. had run its course.

Until several years ago, Rand was PTC's exclusive distributor and preferred integrator for small and medium size North American and European accounts of ProEngineer, its popular parametric modeling MCAD software. That exclusivity, which evolved from a partnership that began in 1988, was dissolved at the behest of both parties, according to Baldesarra.

To wit: PTC wanted to engage a number of distributors in order to broaden its marketing reach, while Rand sought to handle the full PTC line, including two-year-old Windchill, a design collaboration package, and manage bigger accounts.

ProEngineer, despite the PTC divorce, remains important to Rand. At year end, almost half the company's customers were ProEngineer users, down from about 75% two years earlier, according to Baldesarra. Integrator Rand installs a host of MCAD packages including AutoDesk Inc.'s AutoCAD. It also develops software-middleware and structural analysis tools-and resells required computer hardware.

Rand, based in Mississauga, Ontario, near Toronto, also operates Engineering.com, a several-year-old engineering industry portal.

What Rand offers Dassault is MCAD integration expertise and a large customer base. In 2001, Rand sales totaled C$366.1 million, down from C$420.5 in 2000. Rand last year lost C$46.4 million, which included write downs and a restructuring charge, compared to a profit of C$13.9 million in 2000. Rand, at Dec. 31, technically violated some bank agreements. Earlier, management reduced the company payroll by about 10%.

But with the IBM deal in hand, Rand expects to resume hiring, Baldesarra said. Rand expects to work closely with the IBM Corp. sales force that markets Dassault software in North America and supplement the engineering department integration efforts of IBM Global Services, IBM's large systems integration unit.

Further cementing Rand's relationship with Dassault was it agreeing to lend Rand a total of $25 million (US). Dassault, within two years of the projected June 12 deal close, can convert that loan into a Rand equity stake not to exceed 19.9%.

For additional information about RAND Worldwide, see www.rand.com.

Ira Breskin, a freelance editor/writer specializing in business and technology issues, is a frequent contributor to Business Week, Newsday, and the New York Times. He holds a B.A. from Columbia University and a Knight-Bagehot Fellowship in Economics and Business Journalism, Columbia University Business School. He may be reached at ibreskin@optonline.net.

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See also:
IBM, Dassault Systemes and RAND Worldwide Join Forces to Expand Product Lifecycle Management




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