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August 11, 2003
MCAD Industry View -- What did the Last Quarter Bring? by Dr. Russ Henke
Please note that contributed articles, blog entries, and comments posted on MCADcafe.com are the views and opinion of the author and do not necessarily represent the views and opinions of the management and staff of Internet Business Systems and its subsidiary web-sites.
Russ Henke - Contributing Editor

by Russ Henke - Contributing Editor
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In a
May 8, 2003 Commentary by this author published in MCADCafé.com, then-recent yearly and quarterly financial performances of eight (8) public Mechanical Computer Aided Design (MCAD) companies were analyzed and compared. Expectations of future financial performances of these same MCAD entities were documented. The conclusions in May? A gloomy economic outlook still gripped most high-tech companies and, in terms of major revenue growth, a significant MCAD turnaround was predicted to be unlikely during 2003.

Three months later -- how prescient were these predictions? What's the outlook today for the rest of 2003 and beyond? One industry observer again offers his thoughts on the subject.

In mid-July 2003, Americans were startled to read this headline in their morning newspapers, "The U.S. Economic RECESSION? Over!" Not only was the recession over, said the National Bureau of Economic Research in Cambridge, MA, but also the recession actually "ended" in November 2001 after only eight months (San Francisco Chronicle, July 18, 2003, page B1)!

With unemployment nationally still well above 6%, such "news" was fairly hard to accept for those millions of unemployed workers who knew that U.S. jobs were in fact still falling, some 21 months after November 2001! Indeed, the Labor Department reported on August 1, 2003, that 486,000 more U.S. jobs have vanished just since January 2003. The number of U.S. workers claiming jobless benefits now has reached its highest point since February 1983, said the IEEE*USA News (July 11, 2003).

The problem of course is that U.S. GDP "growth" since November 2001 has remained far too anemic to create new jobs, even though it's been just positive enough arithmetically to escape a formal recession classification. As a result, many firms have been trying to boost their bottom lines by reducing purchases and keeping payroll costs down, demanding more and more from old equipment and remaining employees. Among other causes, these mild profit improvements have nudged the stock market averages up slightly, but still well below the market levels of January 2001. And of course, cost cutting has natural limits.

U.S. manufacturing has been among the hardest hit. Manufacturing payrolls have contracted every month since July 2000. New York-based economist Maria Fiorini Ramirez said on the August 1, 2003 "News Hour with Jim Lehrer", that the U.S. is suffering a "depression in manufacturing", with massive job losses, often to offshore suppliers that may never be recovered.

In the May 8 MCADCafé Commentary, it was asserted that the key to MCAD's importance lies in the leverage its users apply to create the everyday durable goods with which we are all familiar: automobiles, trucks, military gear & weapons, appliances, farm & construction equipment, aircraft & aerospace vehicles, etc. In short, MCAD is arguably responsible for enabling today's manufacturing industries, which are the centerpieces of creating real productivity and wealth in every modern economy.

So if there is a "depression in manufacturing" today, it means a smaller manufacturing base to enable, at least in the U.S. In the sequel, we'll examine just how the public Mechanical Computer Aided Design (MCAD) companies are fairing in this relatively depressed environment.

Any MCAD Industry progress in Q2 2003?

Below we will check out the recent progress of the same group-of-eight public MCAD entities selected for mention in the May 2003 Commentary, plus we have added the ESI Group (Paris, France) to this quarter's list. (For additional information on these companies,
click here). In May 2003 we saw that 2002 brought decreased performances for MCAD year-over-year, compared to 2001. We also noted that Q1 2003 did not provide improvement in financial performance for most of the covered companies, compared to Q1 2002. Indeed, the four largest MCAD companies sported revenue results that were down year over year in Q1 2003 compared to Q1 2002.

So was Q2 2003 any kinder to these MCAD companies? See Figures 1 and 2.

Company Last QTR


Prev QTR



2002 QTR

Last QTR vs.

Comparable QTR

2002 Revenue
Autodesk 211 195 229 92%
Dassault €181 €183 €190 95%
PTC 165 171 178 93%
EDS 5520 (7/23/03) 5370 (5/07/03) 5412 102%
EDS PLM 205 (7/23/03) 201 (5/07/03) 226 90%
ANSYS 27.6 24.6 22.7 121%
ESI Group €11.0 €17.11 €9.0 122%
Moldflow 9.9 9.5 8.3 120%
MSC.Software 80.3 85.1 95.1 84%
Tecnomatix 20.2 20.6 20.2 99%
Figure 1 -- Nine Public MCAD Companies' Latest Qtrly Revenue Performances

(Millions; U.S. $ except as indicated)

Note: 1 ESI Group historically enjoys a seasonal skew in its revenue in the fourth quarter of its fiscal year. The Q4 € 17.1 million here was 40% of its annual turnover in YE January 2003. In the previous year, Q4 was 35% of the annual turnover for YE January 2002. The Q4 € 17.1 million here was 14.5% higher than Q4 of the previous year.

Company Last QTR


Prev QTR



2002 QTR

Last QTR vs.

Comparable QTR

2002 Earnings
Autodesk 7.5 6.4 17.6 43%
Dassault €28.2 €25.3 €27.7 102%
PTC (33.8) (15.2) (27.3) worse
EDS 138.0 (126.0) 316.0 44%
EDS PLM Earnings for EDS PLM Solutions are not reported by EDS
ANSYS 4.4 4.3 4.7 95%
ESI Group €(0.5)1 -- €2.02 slightly worse
Moldflow 0.25 (0.59) (0.85) better
MSC.Software (27.8) 1.1 (6.1) far worse
Tecnomatix (0.2) (1.6) 0.2 slightly worse
Figure 2 -- Nine Public MCAD Companies' Latest Qtrly Earnings Performances

(Millions; U.S. $ except as indicated)

Note: 1 Full Year Ending 01-31-03. 2 Full Year Ending 01-31-02.

Autodesk's revenue this most recent quarter was right at the high end of the range of $205 to $210 million predicted by management three months earlier. While Autodesk's revenue this quarter improved sequentially 8% over its last quarter, it was nevertheless still down 7% from its comparable quarter in 2002 (Figure 1). Moreover, while still slightly positive, net income this quarter was only 43% of last year's comparable quarter (Figure 2).

Dassault Systemes total revenue in its most current quarter declined 5% from the comparable quarter last year (see Figure 1), and software-only revenue was down 9%. Sequentially from the previous quarter, total revenue also declined slightly. Management says, however, that the Q2 2003 was within its target range of € 180 to € 185 million. While earnings were up 11% sequentially from the just-previous quarter, Dassault was able to squeeze out only a very slight earnings increase this quarter vs. last year (see Figure 2). Dassault will definitely have to juice up its 2H 2003 revenue to meet its overall 2003 €-revenue growth goals.

Parametric's fortunes continued to decline in its most recent 2003 quarter, with revenue down 4% sequentially from last quarter, and 7% compared to last year (see Figure 1). Net Loss was more than double last quarter's and worse than last year's comparable quarter (see Figure 2). Parametric management had predicted only three months earlier that revenue this last quarter would be equal to the previous quarter; however, they missed their revenue forecast by some $6 million on the low side, compounding their most recent delay in chopping costs as predicted.

On July 23, EDS announced second quarter 2003 total revenue rose 2 percent to $5.52 billion (down 3 percent on a constant currency basis) versus the same quarter a year ago (See Figure 1). While virtually flat sequentially with its previous quarter, "EDS PLM Solutions revenues decreased 10 percent, at constant currency, from a year ago to $205 million, reflecting weak software spending across a range of industries," said the news release. Earnings information in Figure 2 for EDS reflects the wide fluctuations endured during EDS' current year of reconstruction. Figure 2 of course offers no insight into EDS PLM margins, as earnings for EDS PLM Solutions are not reported by

ANSYS continued its remarkable record of revenue growth in its most recent quarter, advancing 12% sequentially and 21% over its 2002 comparable quarter (see Figure 1). However, earnings were up only 4% sequentially and actually declined 5% from the same quarter last year (see Figure 2).

ESI Group (Paris, France): Flat from 2001 to 2002 at just over € 42 million in revenue, the ESI Group nevertheless slipped from slightly positive net income in 2001 to slightly negative in 2002. However, as shown in Figure 1 above, the ESI Group scored a 22% gain in its Q1 2003 first quarter revenue (ending April 30, 2003) over the same quarter the previous year (reported June 4, 2003). Some 81% of ESI Group's revenues come from outside France. Note: The ESI Group is a provider of numerical simulation prototypes and manufacturing processes that take into account the physics of materials. A pioneer of virtual crash test simulation with PAM-CRASH and virtual stamping with
PAM-STAMP, the ESI Group invented the Virtual Try-Out Space. Second Quarter results for the ESI Group will not be available until about September 4, 2003.

Moldflow also turned in a substantial quarterly revenue increase in its results posted August 5, 2003, growing to $9.9 million, 20% over the comparable quarter last year and up nearly 5% sequentially (See Figure 1). Moldflow also moved its net income back into black ink territory in the last quarter, compared to last year's (and even the recent sequential quarter's) red ink (see Figure 2). (Note: Last quarter's actual results beat management's guidance for both revenue and earnings. This was Moldflow's April 24, 2003 prediction: "We expect the current quarter to end with revenues somewhere between 95 percent to 101 percent of the previous quarter, and earnings to be somewhere
between a slight loss and breakeven). As with ANSYS' and the ESI Group's revenues, however, Moldflow's positive growth provides minimal lift to the overall MCAD group's revenue sum because of Moldflow's relatively small contribution to MCAD revenue totals. Nevertheless, these three smaller companies (ANSYS, ESI Group, and Moldflow) are demonstrating remarkable growth during these troubled times."

On July 23, MSC.Software Corporation announced financial results for its second quarter ended June 30, 2003. For the second quarter, reported revenue including discontinued operations was $80.3 million, down 16% compared to $95.1 million for the second quarter of 2002. Sequentially, MSC revenue was down 6% from Q1 2003. See Figure 1. MSC's second quarter net loss ($27.8 million) worsened considerably from last year and was also well down sequentially from Q1 2003's slight ~$1 million net income (see Figure 2). These results are of course in stark contrast to management's statements of April 23, 2003, "We expect revenues for next quarter (Q2) to be in the range of 100 percent to
106 percent of last quarter, with dramatically improved EPS."

Tecnomatix Technologies Ltd. announced its financial results on July 30, 2003 for the second quarter ended June 30, 2003. Revenues for the second quarter of 2003 were just below being even with the $20.2 million for the second quarter of 2002. Sequentially from Q1 2003, revenues declined 2%. See Figure 1. The second half of 2003 will require significant revenue improvements to meet Tecnomatix' revenue predictions for all of 2003. The acquisition of USDATA (annual revenue of ~$10 million) should help! Net Income slipped slightly into the red in Q2 2003, vs. the same quarter last year. Q2 2003's net loss was a big sequential improvement over Q1's net loss. See Figure 2.

MCAD Company Stock Prices

With three exceptions (ANSYS, ESI Group & Moldflow), Figure 1 reveals that recent trailing year over year quarterly revenue performances hardly recommend an increase in the price of company equities. Nor do the sequential quarterly revenue performances, although these figures are somewhat closer to one another. Ditto for the earnings performance data in Figure 2.

Nevertheless, fully eight of the nine covered MCAD companies enjoyed a rise in their share prices between May 1 and August 1, 2003, as shown in Figure 3 below.

Company May 1

$ Price
August 1

$ Price

Aug 1/May 1
Autodesk 15.60 15.00 96%
Dassault 28.50 34.41 121%
PTC 3.07 3.10 101%
EDS 18.37 22.29 121%
EDS PLM EDS does not break out EDS PLM from parent
ANSYS 26.90 33.72 125%
ESI Group 9.60 11.70 122%
Moldflow 8.00 9.80 122%
MSC.Software 6.21 7.40 119%
Tecnomatix 6.95 8.98 129%
Total MCAD Basket 123.23 146.40 119%
Figure 3 -- Nine Public MCAD Companies' Stock Prices on May 1 and August 1, 2003

Such MCAD company stock price rises from May 1 to August 1 are somewhat less significant when viewed in the context of the general rises during the same period in the overall stock market averages, as shown in Figure 4. Nevertheless, the Total MCAD Basket did outperform even the tech-heavy NASDAQ, however slightly.

Index May 1

August 1


Aug 1/May 1
DJIA 8550 9150 107%
NASDAQ 1470 1715 117%
S&P 500 910 985 108%
Figure 4 -- Closing Averages of three indices on May 1 and August 1, 2003

Could it be that stock prices are better harbingers of future company performances than trailing financial data? Do investors in the MCAD businesses anticipate something positive that's less visible to the rest of us? Time will tell!

Finally, it might be observed that the equity price rises for May 1 to August 1 for the MCAD Companies listed in Figure 3 are probably just as well. This is because, historically speaking, August is the absolute worst month for stocks in the Dow Jones Industrial Average (DJIA) and Standard & Poor's 500 index, according to the SmallCap MarketWatch Newsletter of August 4, 2003. During the past fifteen years, the DJIA has lost an average of 1.9% in August and the S&P 500 has lost an average 1.6% in August (Stock Trader's Almanac). August is only the second worst month of the year for the Nasdaq Composite; that distinction is reserved for September.

MCAD Company Guidance for next Quarter:

Autodesk's May 22, 2003 guidance for its next quarter: "Net revenues for the second quarter of fiscal 2004 (Note: to be reported around August 22, 2003) are expected to be in the range of $207 million to $212 million (Note: Flat with last sequential quarter). Earnings per diluted share for the second quarter of fiscal year 2004 are expected to be in the range of $0.07 to $0.10." (Note: Autodesk has about 113.5 million shares outstanding). For the Full Year Fiscal 2004: "Net revenues for fiscal 2004 are still expected to be in the range of $875 million to $900 million. Earnings per diluted share for fiscal year 2004 are expected to be in the range of $0.50 to $0.60. Despite a constrained spending environment and the uncertainty of SARS, we remain conservative yet highly confident in the outlook for the company. There is less visibility on the full year and more potential for geopolitical and economic forces to impact our anticipated results of operations." Note: Autodesk's total revenue for the whole year 2003 may eclipse that of 2002, but it'll soon need near term results far in excess of management's current 2003 projections to come even close to 2001's revenue total. Barring a revenue/earnings disaster in the next few quarters, however, Autodesk should eclipse 2002's net income and maybe even 2001's, an indication that, like many U.S.
companies, operating costs (i.e. people) have been deeply slashed since 2001.

Dassault Systemes forecasts next quarter's revenue to be € 175 to € 180 million. On July 24, 2003 Thibault de Tersant, Executive Vice President and CFO, commented, "While we continue to be cautious with respect to any improvement in the economic environment in the second half of the year, based upon first half results and our business outlook, we are reconfirming our full year revenue growth objective of about 7% (in constant currencies) and our operating margin growth objective of up to 1 percentage point above the 27.7% operating margin achieved in 2002." Note: While Dassault's CATIA pricing & packaging scheme remains very complicated, Dassault made a significant
improvement in the features & functions in its SolidWorks 2004 release announced on July 7, 2003.

PTC plans more cost cuts and layoffs. PTC's July 16, 2003 guidance for its next quarter: "For the fourth quarter of 2003 (Note: to be reported around October 16, 2003), we expect revenue to be in the range of $160 million to $170 million and net loss per share to be in the range of $0.10 to $0.14. (Note: PTC has about 264 million shares outstanding). This guidance includes a restructuring charge of approximately $15 million for the quarter related to the cost reduction initiatives." For the future: "Our goal is to be profitable in our next fiscal year (2004)."

EDS' July 23, 2003 guidance was as follows: "While we met our financial commitments in the (last) quarter, the results highlight continuing issues in our sales and operating efficiency," said EDS Chairman and CEO Mike Jordan on July 23, 2003. "We are taking aggressive steps through our ongoing transformational process to improve our cost structure, productivity and competitiveness. We also fortified our balance sheet with a significant infusion of capital. Now we must translate our improved competitive position into greater marketplace success."

EDS also announced July 23 that it is finalizing its analysis of the expected EITF 00-21 adjustment, which it believes will result in a net reduction of unbilled receivables and deferred revenue and the deferral of system construction costs on its IT service contracts using percentage-of-completion accounting. EDS will restate first and second quarter 2003 results to reflect the new accounting rule, as mandated by FASB, and disclose the results as part of its third quarter 2003 earnings announcement in October. Adoption of the new accounting rule will significantly reduce full-year 2003 earnings but will have a positive earnings impact in 2004. (Note: EDS says EITF 00-21 impacts the
way all companies recognize revenue on contracts with multiple deliverables. EITF stands for the Emerging Issues Task Force of the Financial Accounting Standards Board. The impact of these restatements on EDS PLM Solutions is unknown at this juncture).

ANSYS' July 31, 2003 News Release was silent on predictions for subsequent quarters. However, ANSYS has firmly established a long-standing trend of improved revenue performances quarter to quarter.

The ESI Group's guidance for the rest of the year was stated by Chairman & CEO Alain de Rouvray on June 4, 2003: "Our performance in the first quarter means that we are cautiously optimistic about business levels in the current year, expecting double digit growth." (Note: The ESI Group's next quarterly financial release will be about September 4, 2003, approximately).

Moldflow gave this guidance in its August 5, 2003 News Release: "Moldflow expects revenues for the first fiscal quarter of 2004 (next quarter) to be between $9.4 million and $9.9 million and net income per diluted share, measured under GAAP, to be between $0.01 and $0.03 per share, assuming an effective income tax rate of 35%." (Note: Moldflow has about 10 million shares outstanding). "Given that there is still a degree of uncertainty in the world economy and our end-user markets in particular, we will continue to monitor the economic conditions and adjust our business model when appropriate to meet these objectives. As we look forward to fiscal 2004, we expect to see
continued modest growth in total revenues."

During Q2, MSC.Software Corporation exited its systems business as a hardware reseller and says it will intensify focus on core software and service products. "We expect that revenue from continuing operations will stabilize as we focus all of our resources on our software and services product offerings," said Frank Perna, CEO and Chairman of MSC.Software on July 23, 2003. "We will continue to weather the current difficult economic times around the world and are confident that when the economy turns more positive we are well positioned for double-digit growth," Perna concluded. Mr. Perna's predictions for the future: "Based on current visibility, the Company expects third
quarter revenue from continuing operations to be in the range of $60 million to $64 million and earnings to be in the range of $0.03 to $0.05 per diluted share. In addition, based on current visibility, the Company expects revenue from continuing operations for the fourth quarter to be in the range of $65 million to $70 million and earnings to be in the range of $0.06 to $0.10 per diluted share. Based on current visibility, the Company expects revenue from continuing operations for FY 2004 to be in the range of $260 million to $280 million and earnings to be in the range of $0.35 to $0.45 per diluted share." (Note: MSC has about 30 million shares outstanding).

Tecnomatix' guidance for the future on July 30 included these comments from Oren Steinberg, chief financial officer and executive vice president: "Our focus in the third quarter will remain on increasing sales, maintaining our cost controls, closing the acquisition of USDATA and integrating it into our organization. We are receiving positive indications from customers regarding their IT spending and China seems to be recovering from the SARS epidemic. Nevertheless, we are still relatively cautious given the overall difficult business economy. With that said, we expect to achieve revenue growth in the second part of the year of approximately 5% to 10% over the second half of 2002,
with improved profitability."

August 2003 MCAD Industry Commentary Conclusions:

If one looks hard enough, there are indeed several scattered signs that offer hope for a general economic improvement during the second half of 2003, even for high-tech. For example, the Commerce Department reported on August 4 that American Factory Orders for June 2003 rose 1.7%. Business purchases of equipment & software rose 7.5% in the April-June 2003 quarter (4.5% for the 1H 2003), the best showing in several years, according to Moody's Investors Service.

During the same second quarter, U.S. GDP growth was estimated at 2.4% annually, nearly double the rates in the previous two quarters. However, most economists agree that GDP must rise to a sustainable 4%+ or more, before jobs growth begins to occur.

Moreover, for high tech in general, the latest MCAD Industry results discussed in this article seem to echo the overall technology sector opinions. These recent opinions include AP reports like: "Investors (who are) betting on the tech sector to lead a new bull market as it did in the late 1990's are likely disappointed… it's unclear whether recent (spotty) gains are sustainable." John Lonsky of Moody's Investor Service (NY) said that, "A tech turnaround has not arrived. Year over year changes this quarter are not any better than they were in the first quarter." (SF Chronicle, July 17, 2003, page B3). On top of 500,000 U.S. Information Technology (IT) jobs already lost since 2001, Gartner Inc. forecasts another 500,000 will be displaced in the next 18 months as their jobs move overseas, as reported the IEEE*USA News on July 21, 2003. Job reduction announcements rose 43 percent to 85,117 in July after falling in June, according to the monthly tally by Challenger, Gray & Christmas, a Chicago-based employment firm (CBS MarketWatch, August 5, 2003). Unemployment in tech-heavy San Jose, CA was 8.5% in June 2003. "I don't see unemployment coming down until 2004," says Anne Ramstetter Wenzel, a Menlo Park, CA economic consultant (SF Chronicle, August 3, 2003, page I-16). Ford announced a plan last month to cut (another) 10 percent of its salaried job costs, including an
unspecified number of white-collar job cuts. "It is clear we will have to take further cost actions," Vice Chairman Allan Gilmour told the JPMorgan/Harbour automotive conference. "We are not done." (Reuters, August 6, 2003).

Further cost cutting among U.S. firms will soon reach its natural limits. Not only could the pressure on remaining employees become unbearable, but also the "opportunity losses" for future innovation may suffer. Does operating "lean & mean" these days imply that past management staffing decisions were totally incompetent?

Finally, there are many dark clouds still hanging over us all. Postwar trauma abides in both Afghanistan and Iraq; casualties on all sides continue. Other world hot spots threaten to consume more U.S. soldiers. Nuclear proliferation once more raises its ugly head. Former national allies are now political foes of the U.S., and NATO and the UN are the weaker for it. Bin Laden remains at large, and Al Qaeda terrorist attack warnings are frequent domestic occurrences. With only a few exceptions, corporate fraud remains unpunished. Utility prices are now much higher due to illegal price manipulation by power market brokers, yet consumers are stuck with the bill. Gasoline prices are rising
once more. Consumer Confidence again retreated in July. Repeated U.S. tax cuts and repeated interest rate reductions (now at a 45-year low) have all proved ineffective. U.S. federal deficits have ballooned to unprecedented levels. Meanwhile dozens of states across the country face budget deficits correctable only by regional services' cuts and higher local taxes. A duly elected state governor is threatened with recall by a microscopic minority. Over three million U.S. jobs have been lost since January 2001, more than in any similar period in the last sixty years. Worldwide, economic enervation & uncertainty continue to reign.

While several of the covered MCAD companies have made important moves in the last quarter to strengthen themselves for the future, such as acquisitions and/or enhanced product releases, there is little in their recent trailing financial performance data, little in their guidance for the rest of 2003, and little in the economic & political Weltschmerz globally to suggest that a major MCAD Industry turnaround (e.g. widespread double-digit revenue growth) is any closer now than it was in May 2003.

Corporate and national leaders need to throw off the current pervasive and paralyzing negative framework and restore the robust economic and political optimism previously characterizing America. Then high technology, manufacturing and the MCAD Industry will again thrive here and abroad.

The EDA Industry might possess better immediate prospects than MCAD; look for another Commentary on EDA in late August in EDAtoolsCafe to follow up the one on May 23, 2003.

MCADCafé.com currently tracks the financial performance of multiple public companies in the Mechanical CAD market. Eight (8) companies were chosen for the author's May 8, 2003 Commentary. Four of these companies (Autodesk, Dassault Systemes, PTC and EDS PLM Solutions) represent approximately 85 percent of the total revenue in this grouping, and each of these four companies offers a wide array of software and services products across the entire design to manufacturing space. The remaining four public companies (ANSYS, Moldflow, MSC.Software and Tecnomatix) offer specialized software/services products in
specific MCAD niches and together they create the remaining 15 percent of the total group-of-8's revenue. Indeed, these latter four companies frequently partner with the initial four to provide end-customers with broader solution suites.

The eight (8) companies covered in the author's May 8, 2003 Commentary in MCADCafé.com were again studied here for comparison purposes, and a ninth company, the ESI Group, was added.

The combined worldwide total annual revenue of these companies is nearly $4 billion, not an insignificant sum. But it is, in fact, less than 3 percent of the $150 billion spent annually on all types of software. So why study MCAD companies at all? The key to MCAD's importance lies in the leverage its users apply to create the everyday durable goods with which we are all familiar: automobiles, trucks, military gear & weapons, appliances, farm & construction equipment, aircraft & aerospace vehicles, etc. In short, MCAD is arguably responsible for enabling today's manufacturing industries, which are the centerpieces of creating real productivity and wealth in every modern economy.

Understanding the comparative MCAD revenue content of various vendors is not merely academic. For example, it helps observers better understand the likely future competitive MCAD strength of each vendor relative to its peers in such areas as amount of money available for R&D, for potential new acquisitions, for financial stability to weather economic cycles, and for other key business factors.

In comparing financial performances of the four largest MCAD companies tracked by MCADCafé.com, it's instructive to account for the actual MCAD content of each. For example, the revenues of Dassault and PTC can arguably be considered 100% MCAD in nature, whereas Autodesk's total revenue is only partially made up from its business in MCAD. Some Autodesk revenue (~15%) stems from its Discreet Segment, which provides systems and software for creating and animating imagery. Even in the remaining 85% of Autodesk's total revenue, derived from its Design Solutions Segment, is divided among solutions for Manufacturing, GIS, the
building industry, and the platform technology group. Only the solutions of the Manufacturing Group (Inventor, Autocad Mechanical, Mechanical Desktop, Streamline, Point A, etc.) might be thought of as "pure" MCAD revenue.

EDS' MCAD revenues are created by EDS PLM Solutions, the mid-2001 union of SDRC and UGS. While EDS PLM Solutions represents less than five percent of EDS. total revenues ($21.5 billion in 2002), EDS PLM Solutions annual revenues are right there at similar levels as the world's other MCAD revenue leaders Dassault and PTC. For purposes of our discussion, we consider the revenues from the remaining public companies (ANSYS, ESI Group, Moldflow, MSC.Software and Tecnomatix) to be 100% MCAD.


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About the Author

Since early 1996, Dr. Russ Henke has been president of HENKE ASSOCIATES, a San Francisco Bay Area high tech business & management consulting firm. During his corporate career, Henke operated on "both sides" of MCAD and EDA, as a user and as a vendor. He's a veteran corporate executive from Cincinnati Milacron, SDRC, Schlumberger, Gould Electronics, ATP, Mentor Graphics, and others. Henke is a Fellow of the Society of Manufacturing Engineers (SME) and currently serves on the SME International Board of Directors. He is also a member of the IEEE and a Fellow of ASME International. Further information on HENKE ASSOCIATES is available at

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    IDSA August 13 - 16, 2003 Marriot Marquis Hotel in Times Square, New York, NY USA

    The 2003 IDSA National Conference will be held in New York City from Wednesday, August 13th running through Saturday, August 16th, 2003 at the Marriott Marquis Hotel in Times Square. The theme of this year's conference is "Cool". What is it? Where did it come from? Can it be defined? Why must we address it now? Discussion to be continued in New York City, Wednesday August 13 through Saturday, August 16, 2003.

    The Emerging Technologies Conference 2003 September 24-25, 2003. Kresge Auditorium, MIT Campus, Cambridge, MA. The Emerging Technologies Conference at MIT will focus on the technologies that are poised to make a dramatic impact on our world.
    Technology Review Magazine, the authority on emerging technology, will bring together world-renowned innovators and key leaders in technology and business. The 2-day conference will feature a mixture of keynote, panel and breakout discussions that will center on the transformative technological innovations that have the potential to fuel new economic growth.

    PLM 2003 -- The Premier Lifecycle Management Event -- September 15-17, 2003, Scottsdale, AZ USA. PLM 2003 will take place September 16-17 in Scottsdale, AZ and is geared to executives in the entire spectrum and functional areas of product lifecycle management, with emphasis on lessons learned in the world.s leading manufacturing organizations.

    PLM Road Map 2003 -- October 28-29, 2003, Dearborn, Mich USA. Join colleagues and share case histories on leading-edge implementations in Product Lifecycle Management. Topics covered include collaborative design, knowledge capture and reuse, collaborative CAE, high-integrity market-oriented product definition, physical architecture, manufacturing simulation, sourcing, product sales configuration, marketability, metrics and much more.

    more Events]

    You can find the full MCADCafe event calendar here.

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    -- Russ Henke, MCADCafe.com Contributing Editor.