EarningsA couple of things caught my eye recently, but I’ve been too wrapped up in other projects to write about them in any detail. So rather than continuing to wait until I have time, in no particular order …

Reality computing seems to be taking a beating right now — well, at least a couple of the bigger, publicly-traded suppliers are. FARO said that Q1 revenue would fall short of expectations because of foreign exchange and weakness in Japan and Brazil then, last week, 3D Systems said that it saw a sharp drop-off in activity by aerospace, automotive and healthcare customers as they slowed spending because of exchange rates and the fallout from the low price of oil. 3D Systems also had internal issues, as “certain metal and nylon applications and performance issues delayed the company’s ability to sell additional printers during the quarter”. Coming on the heels of Stratasys‘ announcement of problems with the Makerbot business, 3D printing shares are taking a beating on Wall Street. Does this mean reality computing is a non-starter? Of course not. We’ll all keep capturing more and more of the world around us; one hiccup won’t affect that in the long run. We will also increasingly rely on additive manufacturing technology, so postponing purchases from one quarter to another is also not a category-killer. But these reports do show that perhaps printer companies may be trying to push too hard with technology that’s not quite ready for customers whose internal processes may not be quite ready, either, to let go of decades of additive manufacturing practices.

Speaking of reality computing, the popularity of handheld scanners seems to be skyrocketing. Since they’re so much cheaper, at under $10,000 per unit as compared to $50,000 and up for a traditional model, easy to use and can reach places traditional scanners often can’t, they’re a great way to collect “as is” data. Trimble and DotProduct recently announced that DotProduct’s DPI-8 would be distributed by Trimble and its distribution partners. That’s big — a little startup getting such a global partner on board. It’s a clear sign that the cost of reality capture can only come down even as ease of use goes up.

Nemetschek gave more details results a few weeks ago for Q4 and full year 2014. You can read them here but, in summary, revenue was up 18% to €219 million in 2014, above the company’s last forecast with a big year-end, as Q4 revenue was €65 million, up 26%. What led to such good growth? License revenue was up 21% overall, with the Design segment again leading the way, led by Vectorworks and Graphicsoft. Design is still the largest segment, with total revenue of €175 million, up 17%; on an organic basis, revenue was up 11%. The Build segment reported revenue of €20 million, up 30.4%, including a €5 million contribution from Bluebeam, consolidated since October 31, 2014. Revenue from the Manage segment was up 5% to €5 million and the Media & Entertainment segment reported revenue up 12% to €18 million. For 2015, Nemetschek expects group revenue to grow organically by 6% to 9% but that acquisitions will boost total revenue to around€265 million. What does it all mean? That BIM is catching on for more and more project types and sizes — and that for those too small to support a BIM environment, the use of design and collaboration technologies is still growing in importance.

Finally, a bit of VAR catch-up. VARs, value added resellers, make the PLMish world go round. They represent the software vendor for both sales and support and are often the “face” of a product to local users. They are also, often, small businesses that struggle to keep the cash flow in balance and struggle to grow when they’re dependent on their OEM partners for new products. A couple of large, publicly-traded PLM VARs give us periodic glimpses into the health of that part of our universe:

  • CENIT, reselling Dassault Systemes, IBM, SAP and other partner products as well as add-on services, reported that revenue for 2014 was €123 million, up 4%. Within that total, revenue from third party software was up 12% to €56 million; proprietary software was unchanged at €13 million, and revenue from consulting and services was €54 million, down 3%. Revenue from the PLM segment was up 7.5% to €98 million.
  • Mensch und Maschine, MuM, is an Autodesk reseller that is growing its own portfolio in CAM and AEC. MuM reported that Q1 was a “sparking start” to 2015, as revenue grew 14% to €43. The company’s own software revenue grew 14% to €10 million while the VAR business contributed €33 million, up 16%. MuM said that “nearly one third of the VAR Business growth was due to the Swiss Franc increase against the Euro, the remainder – still double digit – was purely organic.” CEO Adi Drotleff is optimistic about 2015 as a whole: ‘The higher than expected business development in Q1 makes us confident that the targets for fiscal year 2015 are achievable: Sales should clearly exceed €150 million.”

In both cases, the PLM VAR revenue was up over 10% –a little more in the Autodesk space, a little less in the DS– which bodes well for the greater VAR universe and for the OEM suppliers as well. We’ve heard from DS, with total revenue up 30%, constant currency growth of 17%, organic software revenue up 9% in constant currencies. Next up are PTC and Trimble and then we take off with ANSYS, Hexagon and a host of others. It’s going to be a bumpy, currency vs expectation-laden ride.

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