Autodesk CAM: A Small Step and a Giant Leap

Over the years, and with considerable interest, we have observed the ongoing consolidation of the technical/engineering software industry, and it continues unabated today. The consolidation occurs primarily through mergers and acquisitions, whether in whole or in part, but consolidation marches on.

We’ve witnessed consolidation in CAD, CAE, and more recently, CAM, and Autodesk has been a major participant in this consolidation. Relatively recently, Autodesk has made it clear that it intends to become a major force in CAM to round out its Digital Prototyping philosophy that also includes design and simulation. As examples to this CAM commitment, in the past year or so it has acquired HSMWorks (a significant, but relatively small step in CAM), and just last week announced its intention to acquire Delcam (a relatively giant leap in CAM).

It was big news last week when, Autodesk announced its intention to acquire Delcam, one of the world’s leading suppliers of advanced software for manufacturing. The companies offer complementary ranges of software, with Autodesk’s programs for design (CAD) and engineering (CAE) able to be combined with Delcam’s strengths in manufacturing (CAM).

Headquartered in Birmingham, UK, Delcam has more than 30 offices worldwide and approximately 700 employees. The company’s range of design, manufacturing and inspection software provides automated CAD/CAM capabilities.

On completion of the acquisition, Delcam will become a subsidiary of Autodesk. It will maintain its focus on continued growth of its market share in the manufacturing sector, counting on added strength that will come from becoming part of a larger organization.

Delcam’s status in the CAM industry was confirmed in the latest NC Software Market Analysis Report from market analysts, CIMdata. The Report showed that, in 2012, Delcam again had the highest vendor revenues and received the highest end-user payments of all the CAM-centric companies. This signified that the company had remained the world’s leading supplier of CAM software and services for the past 13 years.

The CIMdata report also confirmed that Delcam employs the largest development team in the CAM industry, with over 200 people working on the company’s manufacturing software. Both Delcam and Autodesk invest heavily in product development, and this will likely continue after the acquisition, as there is little overlap and duplication of effort.

Delcam is a publicly traded company and will be purchased with cash that Autodesk has stashed outside the U.S., keeping it there most likely for advantageous tax purposes and for opportunities to act quickly for transactions like this one.

We’ve seen several acquisitions over the years and this is a biggie. We’ll be interested to see how Autodesk handles it, as well as how Delcam customers respond to it. I guess you could look at this transaction as the making of a CAM superpower through acquisition. Consolidation can be a good thing for the companies involved, but fewer choices doesn’t always bode well for customers who are caught up in the consolidation. We’ll keep a close eye on this one because we anticipate a lot of banter from Delcam’s customers and the industry.

Tags: Autodesk, CAM, Delcam, manufacturing

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