The technology used to conceive, design and fabricate the objects around us is complicated. It may be difficult to understand if you're not a practitioner, yet businesses routinely entrust their most important processes to these tools. Our Hot Topics blog tries to clear up some of the confusion.
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I’ve been trying to wrap my brain around Autodesk University and am still not sure what my main takeaways are — and it ended almost two weeks ago! On the one hand, it was the most strategic and visionary AU ever, as Autodesk flexes its muscles in both technical and business directions. On the other hand, it was a typical AU with 700-odd classes targeted at users who wanted to improve their skills and certifications. It was a fascinating mix of business, technical, commercial, do-good, big company and maker.
Autodesk threw down one gauntlet after another in the keynotes, taking on everything from how and where manufacturers typically do business, what type of people and technologies would be employed in the future in discreet/process/AEC and how the world of connected products (not calling it the Internet of Things, nope) means that everything changes. Big themes:
- Rapid prototyping (aka 3D printing) and other manufacturing technology advances are changing everything in the manufacturing supply chain. If you’re able to make something locally, you remove transit costs and time. Too, placing manufacturing close to the consumer enables you to create closer ties between designers, manufacturers and consumers. You might even customize your product to some level, which can command a price premium — and that means more data management to tie it all together. It also might mean a leveling of the playing field, removing some of the advantages seen historically by the largest manufacturers. The message: big companies, learn to be nimble or be replaced by startups that can more readily meet fickle consumer needs.
- The way we design today is predicated on tools that have been around for centuries. Drafting on paper turned into digital design turned into 3D modeling, but each simply documents what the designer has in her mind. Instead, what if, as CTO Jeff Kowalski postulated, we could start with the end goal and work backwards? A desk chair with legs, seat and lumbar support? How would nature create a thing to sit on, without obsessing over (and pre-selecting out) alternatives? Mr. Kowalski says his team is working on algorithms that will show us options given a series of constraints. He sees the emergence of “intelligent classification” and “generative design”, technologies that are a bit like shape optimization in CAE but also fundamentally different. In his vision, we’ll have large databases of CAD models that are searchable for commonalities in both form and function, and that can serve as the baseline for a new design. It’s cool and in Research now as Project Dreamcatcher.
- We should all have paid more attention in material science class. New materials are transforming everything from cars and airplanes to batteries and other power sources. By thinking in terms of “this is a metal part”, we’re limiting our creativity. A bit like generative design, think instead of what you want the part to do, then let technology tell you what it needs to be made of. A little scary, since it means letting go of the familiar (and probably over-designed), but full of possibility.
- Infinite computing and ubiquitous connectivity changes everything. During his keynote, CEO Carl Bass showed image after image of the company’s cloud-based products for design, simulation, reality computing and 3D printing. Of note, Mr. Bass said that Autodesk Fusion 360, the cloud-based mechanical design product will be made available at no added cost to Autodesk Product Design Suite subscribers and will, in the future, run entirely in a web browser. If it can run in a web browser, can it run on my phone? (Should it?) What else can I do once I’m able to access the cloud’s computing capacity? From anywhere at any time?
- Mr. Bass also announced plans for “Subscribe to Autodesk”, a new licensing scheme that will provide access to the entire Autodesk portfolio with a single subscription. After the keynote, Mr. Bass clarified that this will likely shake out to a number of subscriptions and tiers that give clients access to AEC or manufacturing subscriptions, with or without high-end simulation — but the idea of gaining access to the relevant subset of the entire portfolio is interesting and attractive to a lot of customers. They’re waiting for more details of how this will work and what it will cost but, in principle, it provides flexibility to project-based clients to use and pay for only the software they need, when they need it.
- Also unveiled at AU was Ember, the company’s 3D printer. At $5,995. it’s not as cheap as some had hoped but far cheaper than it might have been. If you’re anxiously awaiting one, you can apply to the Ember Explorer Program (http://spark.autodesk.com/ember-explorer) to buy an early build. Autodesk says it’s not planning to go into the hardware biz, and that Ember is intended to help Autodesk understand what 3D printer users need and want, and wade through the sea of incompatible file formats and bad models that lead to incomplete parts —all contributing to a failure rate of 25% to 75% for 3D printing projects, depending on the combination of software, materials and hardware– currently keeping 3D printing from broader adoption.
- Finally, Autodesk rolled its academic program worldwide, making its design, engineering and entertainment software and cloud services free** to students, instructors and academic institutions. Mr. Bass told us that he was, effectively, taking the $100 million educational revenue stream to $0 —he serves “at the pleasure of my Board and shareholders and, if they’re unhappy with this, I have other things I could do”— but with the intention of building a very large, well-trained, global user base. It’s good karma; we’ll see if it’s also smart business.
The bottom line: AU 2014 showed just how ginormous Autodesk has become. It’s got hundreds of products that are desktop/cloud/mobile, sold into AEC/manufacturing/entertainment, around the world and to all sizes of companies. That scope allows the company to take risks, such as with Ember and the education program going global, and lets it take on competitors in an almost dismissive way — but could be a bad thing, too, if it means getting too far ahead of its users with all this talk of the changing world of making things. But fear not: the users I spoke with were excited by the possibilities, even if they didn’t think their day jobs were going to change any time soon. They liked what Autodesk had to say and planned on tuning in again next year.
** Some strings attached. See http://www.autodesk.com/education/home for full details.
The image above is of Carl Bass taking the stage for his keynote. He’s not a small man, but was dwarfed by the screen behind him. If you look carefully, you can see him center stage.
Mr. Bass (pronounced like “bash” without the “h”) came out on stage to the awesome beat of “All About That Bass” (pronounced like “base” as in baseball) by Meghan Trainor. This is Ms. Trainor’s original version:
And this is NASA’s — yup, watch it. It’ll make you smile:
Note: Autodesk graciously covered some of the expenses associated with my participation at the event but did not in any way influence the content of this post.
Why do you do what you do? What’s your end goal? Only when you’ve answered those questions, think about how —which tools and techniques, how you’ll approach the task, whether and how you’ll simulate and collaborate … That’s the nexus of Dassault Systèmes (DS) 3D Experience platform and the central message of last month’s 3DEXPERIENCE Forum in Las Vegas. Thinking differently about what we do lets us imagine different end results, which in turn lets us be more creative with what we bring to market.
3DEXPERIENCE isn’t a user conference in the traditional sense. Users do speak, of course, but there are no classes to attend on how to set up ENOVIA or run a tough TOSCA optimization. It’s a chance for DS to roll out its vision and explain how the lessons learned in creating digital design technologies for manufacturing translates to other parts of the manufacturing enterprise and to completely new industries as well.
We expected to hear from large automotive and aerospace customers, long the DS core audience — and we did. For example, Lockheed Martin’s David Markham spoke about LM’s “immersive idea dunk tanks”, which get disparate groups and disciplines together to solve problems, while Honda’s Eric De Hoff showed very realistic crash test simulations, which are intended to help non-CAE users understand the impact of their design decisions.
This year we also started seeing greater evidence of DS’ diversification into new industries. Anglo American Mining’s Tony O’Neil pointed out that almost everything we rely on has some mined components (certainly, all of our advanced technology does). Mr. O’Neil started a theme that carried through the natural resources sessions at 3DEXPERIENCE: the technology advances that permeate automotive, aerospace and other manufacturing industries haven’t hit mining — it’s generally seen as 20 behind the times. On the bright side: speakers believed that mining can leapfrog ahead, learning from other industries, and make up that 20 year gap in the next 5 or so. There’s not much alternative: as in oil and gas, many mines are nearing the end of their planned lives and miners must go deeper to find quality orebodies. Miners are looking to technology to help them move from general to selective mining to improve the quality of their yield and to minimize environmental impact, go from direct mechanized to remotely-operated and more automated machinery, and from batch to continuous operations (think from trucks to conveyors, and to more intelligent machines), and to find ways to make their operations more energy and water efficient — all of which need advanced modeling, simulation and real-time optimization techniques.
DS also showcased Steven Levine’s Living Heart Project, which developed a computer-based model of a living, working human heart to aid in diagnosis/treatment and the development of medical devices. Dr. Levine pointed out that many medical devices, including heart valve replacements, are often selected for specific patients based on the best judgment of cardiologists and surgeons. Why not take a more quantitative approach and “test” the device in a heart that’s as close to the patient’s as can be modeled? Or let a surgeon plan and practice risky surgery on a heart model? Dr. Levine said that the medical industry is so fragmented among profit/non-profit, commercial/academic, practicing/research that progress is slow and cumbersome; he and DS believe that the 3D Experience platform and Living Heart can create a common platform for far better collaboration than was possible even just a few years ago. DS CEO Bernard Charlès announced at this year’s 3DEXPERIENCE that Dassault Systèmes has signed a five-year collaborative research agreement with the US Food and Drug Administration (FDA) for the development of tests for the insertion, placement and performance of pacemaker leads and other cardiovascular devices used to treat heart disease. If successful (and it’s likely to be), this could usher in a new era in simulation and collaboration in the medical world.
After the main-stage sessions I bounced between tracks, spending most of it in the Oil and Gas and Mining sessions but I think there were many common themes as all projects in our world follow a similar path: concept to more detailed to construction/fabrication/manufacturing to service/operations to deconstruction/recycling. In all cases, greater visibility into project progress and issues leads to an improved ability to course-correct and manage issues as they arise. Access to a common data store makes it easier to know what everyone is doing and communicating about, and ensures that everyone is working on the latest iteration. The sessions I attended were all tailored takes on: today’s workers and consumers are connected and expect instantaneous answers, and user experiences that are simple and elegant. Whether on a construction site or in an office, rapid access to information on which decisions can be made is a must, and not having it leads to significant, bad consequences.
The brands were rarely mentioned in the company’s presentations, though they did come up every so often during the customer presentations. But this wasn’t a brand event, so that’s not surprising. A pleasant surprise, though, was DS’ mention of expanding the electronic lab notebook (ELN) technology acquired with Accelrys last year from chemists to others who need to keep track of their progress. I played with Contur ELN iLabber (now Accelrys Notebook Cloud), the SaaS offering, last year and see how it can replace paper lab notebooks with a digital solution that can be searched and communicated.
What else did DS say? Company representatives continue to promote the 3D Experience message of creating solutions that let their customers craft the ultimate end-buyer experience. They still spend too much time explaining the vision behind the Experiences and too little time showing how the platform concept creates benefit — the dashboards, collaboration, rapid search, visualizations, simulations, access to information of all sorts (much more than CAD or other traditional PLMish data) and so on. Customers are starting to talk about it but aren’t using the “Experiences” term yet.
My favorite quote of the event? DS EVP Monica Menghini: “I have to deliver to you what you think is valuable, not what I think you need.” Refreshing. To fully use the 3D Experience and all of its capabilities, buyers may need to reconsider how they do what they do, and examine why — peel back the onion on processes that may have been in place for decades. Is that still the best way to reach the goal? Does it help or hinder innovation, agility and meeting customer demands? That’s what the 3D Experience Forum was all about. Thought-provoking.
A couple of other things. Jon Carr of Textron Aviation showed video of a bird strike test, where chickens are shot out of a cannon to hit the windshield of a prototype aircraft. I had no idea this was still done and tweeted about it, setting off a teeny tiny Twitter firestorm. First off, the chickens are already dead; they’re all 4 lb birds bought at a local supermarket for the test. No live birds are harmed in the tests. Second, bird strike is a very real threat to both aircraft and human life, so this is a vital part of the aircraft’s test program. Last, it’s hard to simulate and so the CAE program is often supported by a test at some point. Move along now. Nothing more to see here.
The 3DEXPERIENCE keynotes are up on DS’ YouTube channel. Worth a look if you didn’t attend or stream live last month.
Finally, mining is everywhere right now. DS, Hexagon and Trimble all have made acquisitions recently to bolster their offerings for mining; Bentley announced a significant new product set at its recent Year in Infrastructure event. It’s clearly a new frontier, and I’m going to be doing some research into the industry and its issues over the next few months. If you’ve got questions you’d like me to answer, please send them via the contact link above.
Note: Dassault Systèmes graciously covered some of the expenses associated with my participation at the event but did not in any way influence the content of this post.
Image of Steve Levine and Bernard Charlès courtesy of Dassault Systèmes.
Exa Corp. reported Q3 results just now that show solid growth as customers continue to convert from consulting engagements (where Exa carries out projects) to software license buyers. Total revenue was up 13% to $16 million, at the low end of the guidance issued at the end of Q2.
- Total revenue was $16.0 million, up 16% in constant currencies (cc) and up 13% as reported
- License revenue was $12.9 million, up 16% as reported and up 19% in cc
- Project revenue was $3.1 million, up 4% as reported and up 7% in cc.
- Exa breaks out revenue by country in its filing with the US Securities and Exchange Commission. Revenue from the US was $4.3 million, up 40%; from Germany, $3.0 million, up 16%; other markets were up, too, but not some were down year/yaer. Revenue from Japan was $2.4 million, down 6%; revenue from France was $2.4 million, 5%.
CEO Steve Remondi told investors that Exa will be introducing “several new technologies including our recently launched Exa Cloud offering that we expect to benefit customers across our target markets … We are optimistic that the upcoming introduction of several new technologies will reinforce our increasing momentum beyond the fourth quarter and into fiscal 2016.”
Exa now expects Q4 revenue to be between $16.3 million and $17.4 million, up 11% or so over last year and for fiscal 2015 (ending January 31), total revenue is expected to be $60.9 million to $62.0 million. That’s a slight tightening of the total given in Q2 and would amount to growth of just under 15%, slightly below its five year target.
I’ll update once I’ve had a chance to listen to the earnings call replay. I want to understand why project revenue isn’t growing more quickly (since it lead to future license revenue, it’s a critical component) and what happened in Japan, one of Exa’s top 4 geo markets.
Bentley’s Year in Infrastructure (YII) Conference is a 4-day extravaganza of AEC (Architecture, Engineering and Construction), civil engineering, plant design, offshore structures — literally the stuff that makes our world. Some of the best projects in infrastructure were highlighted in presentations from 54 finalists in the Be Inspired competition. We also heard from Prof. Andrew McNaughton, Technical Director HS2 Ltd, how Britain views its high-speed rail future and from Ed Merrow, Founder and President of Independent Project Analysis, Inc. (IPA) about how the construction industry can become more innovative. Sprinkle in presentations and meetings with Bentley colleagues, and it’s a very full 4 days.
Rather than try to do something chronological or pattered in some other way, I thought I’d give my highlights, now that I’ve had a few weeks to reflect on it all. In no particular order,
- AEC may be more connected than discreet manufacturing. AEC projects take place in the office, with suppliers and partners, on the job site and with far-flung stakeholders, all of whom need to weigh in on design decisions, approve budgets, deal with permits, submittals and all the other transactions … People long ago found ad hoc methods for dealing with these handoffs and collaboration points; it often didn’t work consistently but was the best available. At the 2014 Year in Infrastructure conference, Bentley announced the next generation of its products, CONNECT Edition. Keeping the same file format (crucial for an industry where a project may take a decade in design alone), CONNECT Edition versions of MicroStation, ProjectWise, AssetWise, Open Plant et al. will encompass the cloud, mobility and software enhancements that let workers do their jobs where it makes the most sense that day, always accessing the latest, most correct information about the project. CONNECT Edition will roll out across the brands through 2015 and 2016.
- But AEC isn’t sold on CAD-in-the-cloud. Yet. CEO Greg Bentley said the company isn’t working on a cloud-based MicroStation offering since customers aren’t really asking for it — they’re thinking about work packages, workflows and where cloud access makes sense. Right now, said Mr. Bentley, the cloud serves as a connection platform — in other words, collaboration, data management, coordination, storage and serving.
- Openness can’t be oversold. AEC projects are often huge, with hundreds of designers, suppliers, contractors, regulators and others that often rely on their favorite software to do their jobs most efficiently. No matter what software vendors would prefer, it’s a heterogeneous world, and these systems must communicate with one another or they’re rendered nearly useless as people manually re-enter data. (That still happens. What a waste.) Bentley’s i-models are gaining traction as the neutral “container” for many different types of project information. One spectacular case was Hitachi-GE Nuclear Energy, Ltd., one of the Be Inspired Finalists, where the i-model includes radiation data to enable the safe dismantling of Japan’s fleet of nuclear power plants. The container concept is strong, and is going to grow as teams need to share more information, much of it not CAD-based.
- New technologies need new ways of doing business. A couple of years ago, Bentley announced that its largest customers could pool licenses, to make it easier to shift them around to meet fluctuating workloads and task requirements. At this event, the company announced that this was moving forward again, as it introduced the ideas of Playlists and Playbooks. Playlists are role-based sets of software applications, training and other pertinent information for that person’s job. Playbooks are project-specific and will include software, project-specific workspaces, and may include cloud-provisioned catalogs of components and specifications. One project manager I spoke likes the idea of Playlists for his team that pre-defined software versions, required training and lays out many of the project parameters — before anyone begins on the job, as a way to quick-start their involvement.
- Construction is the next frontier in faster, better, more agile. You wouldn’t think it’s possible, since construction is the intersection of millions of details from design and procurement with the reality of a hole in the ground. But it’s been identified again and again as the least efficient part of most AEC projects. Just one data point: only 1/3 of the time a worker spends on the construction site is actual, direct work* — the rest is wasted waiting for equipment or lost due to late starts/early stops because of miscues or otherwise issues. To address this, Bentley and Trimble Navigation announced an initiative to collaborate on construction modeling, creating techniques to control cost and schedule by ensuring that materials are delivered on time, work planning is accurate, instructions are clear and up-to-date — all so that no workers are idle, no material is sitting too long before it is needed, and that temporary works are staged correctly. Practically, this means the companies are pooling resources for product development and sharing schemas across design and construction applications to encourage projects to use the same models from design through construction (no more manual re-entry); leveraging i-models to improve communication between their applications; and working to create or further standards where that is the best solution. In discreet manufacturing terms, they’re trying to de-bottleneck the construction part of AEC projects.
- Get ready. Emerging visual technologies will change how we all work. By now, almost everyone in AEC has heard of (and many are using) laser scanning to quickly assess the in-service condition of their assets. What’s new is the combination of scanning, photogrammetry and big data to rapidly serve up augmented reality: Imagine a utility crew, digging up a road and using a tablet to overlay plans on the real-world to avoid hitting a gas main. That’s great but not enough, since subterranean objects move around, so add in ground-penetrating radar to get up-to-the-minute information. Or say that you work on a construction site. Today, when you show up for work, your ID is scanned and you’re logged in. Tomorrow, the site may be instrumented to such an extent that you show up, are noted as present, get your work order digitally on a tablet that guides you to the correct location on-site, tells you what material to pull and monitors your progress. The Bentley Research team presented these coming technologies and more –they’re concepts right now, so no timelines for released products– that are tantalizing about the world of work in 5, 10, 20 years.
- Optioneering is the next big thing. In the discreet world, we’ve long talked of variants, design space exploration and other ways to look, quickly, at possible alternative solutions to a particular problem. Ideally early in the process, before too many decisions are locked in, design teams let their imaginations roam to explore what the customer wants and needs, and how a design can be most attractive to its target market. In AEC, that’s been hard to do because locating parking spaces on a lot, for example, doesn’t have the physics constraints of sizing a turbine blade, but many of the decision criteria can be quantified. Bentley is expanding the optioneering capability it gained in the SITEOPS acquisition to other AEC-specific design explorations. This is serious big number crunching; SIPTEOPS can evaluate options that take into account local codes, the cost of placing utilities and many other variables to meet the site planner’s criteria. I know Bentley’s working on optioneering for pipe routing and mine design, and possibly in other areas as well.
Bottom line: Bentley Systems is, at this point, so big that it’s hard to take it all in. Over 100 products, thousands of colleagues, dozens of end-markets. One very clear overarching message is that Bentley aims to be the company that customers want to do business with — by being flexible (while remaining profitable) in their licensing, open in their architecture, and forward-thinking in their technology roadmaps. One of my take-aways from the event is Greg Bentley explaining the concept of “app-lification”, the idea that the desktop application and mobile app of Bentley Navigator, for example, will have the same experience. “Uniquely, it’s the same code, the same environment — we’ve done this right.”
I know a lot of you are fans of Bentley’s SACS, Moses and Maxsurf (the offshore and marine design products). I spent a lot of time with power users and the Bentley team and will write separately about that when there’s time.
Note: Bentley Systems graciously covered some of the expenses associated with my participation at the event but did not in any way influence the content of this post.
Image courtesy of Bentley Systems. The Flickr album for the Year in Infrastructure 2014 is here.
The more I follow these companies, the more I realize how little I know about how the world around me works. Today, Trimble announced today that it has acquired Nexala, a privately-held company that makes enterprise solutions for railway operators. Like many big, complex bits of machinery, rail engines and other vehicles need to be managed — tracked for usage, planned maintenance, repair and so on. It makes perfect sense, and I’m glad someone’s thinking about it.
Before the acquisition, Trimble solutions were used to plan tracks and do the site work for construction; for operations, Trimble’s fleet solutions, which I always thought were trucking-specific, as well as its Positive Train Control (PTC) mapping systems aid in passenger and freight railroad operations. With Nexala, it adds repair depot operations to the portfolio, with asset management, operational planning, workshop scheduling, and maintenance planning along with on-train monitoring equipment for remote diagnostics.
Ron Bisio, general manager of Trimble’s Railway Solutions Business explained, “many of the largest railways in the world rely on Trimble solutions to plan, build and maintain their track and structures. With the addition of Nexala, we also offer rail vehicle lifecycle management solutions for passenger and freight train operators. Trimble can now provide innovative solutions for both the track infrastructure and the train assets that ride on it.”
The Nexala business will be reported in Trimble’s Engineering and Construction Segment. It is headquartered in Dublin, Ireland. Financial terms were not disclosed, but it appears that Nexala is a relatively small company, whose revenue will not be material to Trimble.
While the US was busy with turkey day, ESI announced Q3 results that show strength in Europe that did not offset weakness in other parts of the world. License revenue continues to hold steady, though without much growth momentum, while the “refocusing” of the services business announced earlier this year is affecting the top line across the geos.
- Total revenue in Q3 was €19.4 million, down 1% year/year (y/y) and down 2% in constant currency (cc).
- Licenses revenue was €12.8 million, up 0.8% as reported and up 0.5% at cc. The company says “economic and political situation in Russia and in China” slowed growth.
- Services revenue was down 4.4% as reported (down 5.4% in cc) to €6.5 million. The impact of the refocus on projects with higher added value, still visible during the quarter, is expected to end in the fourth quarter.
- By geo, revenue from Asia was roughly €7.2 million, down 5%; from Europe, €8.3 million, up 6%; and from the Americas, €3.9 million, down 6%. For the year-to-date, ESI says the decline in Asia is due to exchange rates and to adverse business conditions while the Americas is due to the refocusing of the services business, which masked license strength. [Reminder: ESI gives geo data as a percentage of overall revenue and only for the year-to-date, so these totals and growth rates are estimates.]
- Sales from the BRIC countries continued to decline, accounting for 12% of revenue year-to-date, down from 15% a year ago and from 13% in Q2. ESI indicates that the slowdown is due to postponed orders in China and Russia as a result of the economic and political conditions there.
ESI gave added color on the first 9 months of the year. Under that lens, license revenue was up 2.2% in cc, “mitigated by the repositioning of major contracts [to] the fourth quarter. At constant exchange rates, and adjusted for the repositioning of these contracts, the installed base grew.” It appears that ESI is telling us to be patient, that these contracts will lead to an even more pronounced Q4 than usual.
CEO Alain de Rouvray said in the earnings press release that “Third-quarter sales continue the trend observed during the first half. The Licenses activity showed further strong demand for our innovative solutions, while the Services reflect the refocus in favor of high value added projects … Encouraged by the commercial momentum of the Licenses, ESI Group maintains its expectations of growth and improvement of profitability over the full year.”
Thursday is Thanksgiving in the US, a holiday that celebrates family, friends and good food. It also reminds us to be grateful for all that is in our lives. My list is long, and it includes you — for reading this blog, emailing your thoughts and challenging me when we don’t agree.
If you celebrate Thanksgiving, make it a happy one. If you don’t, enjoy the quiet!
I head to Autodesk University on Monday. Hope to see you there!
3D Systems and Cimatron today announced that 3D Systems will acquire all outstanding shares of Cimatron for $8.97 per share in cash for a total of around $97 million, including cash. That $8.97 is a 48% premium to Cimatron’s closing price on the Nasdaq on Friday, a nice upside for investors — and investors do seem to love it, sending 3D Systems’ share price up 6% or so on the news.
3D Systems has been a bit battered lately, as production delays affected delivery of 3D printers in Q3 and causing a management shake-up. Adding Cimatron gives the company more gravitas in traditional manufacturing, priced at both high-end (CimatronE, integrated CAD/CAM) and mid-range (GibbsCAM, CNC programming) while also extending direct and reseller sales coverage.
Avi Reichental, CEO of 3D Systems said in a press release,“We believe that the perfect strategic fit between our businesses, combined with expanded capabilities in product development, channel coverage and marketing, could present sizeable synergies that together offer significant long-term customer benefits and shareholder value.”
It’s an interesting move for a company that has been a bit dismissive of old-style subtractive manufacturing technologies, focusing on the sexier, newer additive realm. In reality, most manufacturing benefits from a hybrid approach, so a bit of backtracking here is a good thing. The combo of CimatronE and GibbsCAM spans the small machine shop to large integrated manufacturing space but neither includes (at the moment) tech to manipulate a subtractive process into an additive one so one possible benefit of the acquisition is building additive tech into the CimatronE and GibbsCAM offerings.
Even without than, they’ll be valued additions to the 3D Systems family since they bring both traditional CAM customers as well as design integrated CAM to the party. Danny Haran, Cimatron CEO said, “We have always been focused on providing comprehensive, cost-effective solutions that streamline manufacturing cycles and shorten product delivery time, and as part of 3DS we can substantially accelerate our progress and extend our reach and impact”.
The transaction is subject to customary closing conditions, and the companies expect the transaction to close in the first quarter of 2015.
Autodesk reported results last night that show its transition to subscriptions is picking up steam. Total revenue was up 11% to $618 million, knocking both its own forecast of around $600 million and the investment analyst consensus out of the park. Delcam, acquired roughly a year ago, contributed approximately $14 million but would have been factored into in management’s guidance. It was subscriptions that made the difference, up 15% year/year, adding 121,000 new subscriptions (maintenance, rentals and cloud)in fiscal Q3 and is on-target to add 325,000 to 375,000 net subscribers this year, up from earlier forecasts of 200,000 to 250,000. That’s a 50% overage; I’ll be at AU in a couple of weeks to learn why and when customers are switching to subs. One thing to note: Subscriber data got a one-time bump because Autodesk decided to begin including Delcam subs in its count; that accounts for 25,000 of the company’s 121,000 added in FQ3 — but 96,000 ex-Delcam is still a solid number in any event.
In all, Q3’s strength led the company to raise its forecast for fiscal 2015 (ending January 31). Autodesk now sees revenue growth of between 9% and 10% for the year, as compared to earlier predictions of 7% to 9% growth. That means a Q4 forecast of revenue between $640 million to $655 million.
AEC was the standout segment, with revenue up 17% to $217 million, as suites revenue grew 23% year/year. Manufacturing segment revenue increased 1% to $170 million while revenue from the Media and Entertainment segment declined 2% to $43 million. Finally, revenue from Platform Solutions and Emerging Business segment were up 3% to $188 million.
By geo, revenue from the Americas increased 11% to $231 million; EMEA revenue was up 17% to $238 million and revenue from APAC increased 5% to $149 million (all as reported). Revenue from emerging economies represented 15% of total revenue in FQ3, about on par with earlier quarters.
CEO Carl Bass said in a press release, “Strong billings and revenue growth was driven by strength in several areas including suites, our Architecture, Engineering and Construction (AEC) and Manufacturing business segments, large deal activity, and double-digit growth in all three of our major geographies on a constant currency basis. We continue to make meaningful progress in our transition to a more recurring, subscription-based business, adding approximately 121,000 subscriptions and more flexible enterprise license agreements. As a result, deferred revenue increased significantly to a record $1 billion. These strong results have led us to raise our outlook for billings and revenue for fiscal 2015 for the third time this year.”
I think those flexible enterprise agreements mentioned by Mr. Bass have a lot to do with jumpstarting growth — but more to come once I’ve parsed the details.
What a difference a year makes! At the 2013 NX CAE Symposium, Siemens introduced its LMS acquisition to long-time NX CAE, NX Nastran and Femap users; this year, LMS’ products turned up in nearly every presentation, highlighting the important integration of 1D and 3D simulation with test and PLM. Rather than trying to explain what LMS’ portfolio brings to the table, Siemens let its customers explain how it all fits together for both model-based engineering and the enterprise as a whole.
Presenters spoke about their particular design challenges and integrating simulation earlier and more often into their processes, moving away from digitizing bend-and-break to actually exploring design alternatives early enough for them to have an impact on the final decisions. One company* highlighted the use of LMS Imagine.Lab Amesim in proposal writing, for very early what-if analyses. That’s an awesome idea: Why offer to do something that’s not economically or technically possible? Why spend a lot to figure this out, with more complicated 3D tools, if the contract might not ultimately be awarded to you?
Other speakers covered Model-Based System Engineering (MBSE), a concept which has an official definition but is still a fuzzy, ill-defined idea for many. Everyone can agree, though, that MBSE is a worthy approach, saving time and money and improving quality — if only we can get there. MBSE models are complex and take time to build. One speaker, therefore, suggested his company’s approach: building high-level models to keep “on the shelf”, ready for use when needed. His point: adding details and modifying models is faster than building them from scratch, leading to greater agility and customer responsiveness.
The return on investment in CAE is a function of this reuse, but also of increasing familiarity with the tools offset by the growing complexity of the systems being modeled; that’s too hard to quantify, so most organizations no longer seem to be trying. We used to hear a lot of “didn’t build and crash 5 prototypes so save thousands of dollars” — not this time. Today, CAE is used to be more creative, validate assumptions, reach new opportunities and do it all more quickly. Companies are setting performance targets for their products and then modeling and simulating until they get as close as possible, in a multidomain world that encompasses cost, function, safety, manufacturability and many other factors. These iterations enable engineering teams to make the best possible decisions by knowing the impact of any particular change, well before it’s made in the physical world.
Siemens PLM didn’t make any earthshaking announcements during the event, but did give a further glimpse into its simulation and test product strategy — and it’s just what you’d expect, given the breadth of the portfolio. Jim Rusk, Sr. VP Product Engineering Software told us that we should think of NX as an innovation platform; design, simulation, mechatronics, manufacturing line design and so on, are all apps in that environment. NX 10, available in December, includes
- multiphysics improvements such as structural/thermal interactions with 1-way & 2-way coupling
- enhancements to let users solve coupled problems on the same mesh, with common element types, properties, boundary conditions, and solver controls
- a new expression management system for describing complex boundary conditions, and
- adaptive meshing for improved solution speed and accuracy
among many other things, like a touch interface — go here for a more comprehensive list.
Mr. Rusk laid out a timetable for the integration of NX and LMS tools, but was clear that this was not intended to exclude third-party solutions: “Openness is key, and has been part of our strategy all along. We have good, longstanding relationships with other [commercial] providers.”
Back to the Siemens portfolio. Siemens continues to bring LMS and NX together, and is devoting a lot of resources at areas like complex acoustics and fluid-structure interactions. You may recall that LMS bought Samcef just before Siemens bought LMS; in NX 10, Siemens introduces a new NX CAE environment for the Samcef solver to model composite delamination and calculate ply stresses due to vibration. Even better: integration between NX, Samcef and Fibersim, so that composite models designed in Fibersim can be analyzed in Samcef. The overall plan builds on the LMS Virtual Lab / NX CAE workflows introduced in 2013 (NX 9) and extends out to 2018 (NX 13), and includes the integration of acoustics, MBD, durability and NVH. Said Rusk, “when we’re done, we’ll have market leading capabilities.”
I think Siemens PLM already has market-leading capabilities in many areas, but they’re not yet well integrated where they cross brands. That’s only to be expected — LMS and Siemens co-existed but were not particularly closely aligned before the acquisition and it takes time to bring together such established tool sets. The goal, however, is clear: create a closed-loop, systems-driven product development environment, which defines, validates and tracks performance requirements to make sure that the product that hits the street/shelf/skies is what the customer wants.
One user said it better than I can: “No software will do everything. The ones to choose will work well together and be best at what they do.” Siemens is serious about this, investing in best-of-breed solutions and knitting them together, while making the technology better, more capable and easier to use.
* Siemens PLM asked me not to identify which customer presenter said what. Take a look at the agenda to see, in general, who spoke.
Image above is of the Queen Mary, the venue for the 2014 Siemens CAE & Test Symposium. If you’re in the Long Beach, CA area, the Queen Mary is worth a visit. Much of it is open to the public for free but a $10 tour can make her come alive for you.
Note: Siemens graciously covered some of the expenses associated with my participation at the event but did not in any way influence the content of this post.