Schnitger Corporation

Morning coffee: recalls and virtual reality

Morning coffeeGood morning! Hope you had an awesome weekend. Let’s get this week off to a good start by recapping what happened last week.

It’s the Economy …

Economic news continues to be mixed. Depending on where you are in the world, it’s looking up or slowing down; by industry, things are either accelerating or … not. The world is breathlessly waiting for China’s government to report on manufacturing activity, but last week the World Bank warned that Russia‘s economy could contract if sanctions over Crimea take hold. The Bank forecasts that the Russian economy would grow 1.1 % this year “if the fall-out from the Crimean crisis is short-lived, but warned of a 1.8% fall if Russia is hit with more serious sanctions than those already specified”. That’s nearly a 3% swing; considering how important Russia is as an emerging market for technology and goods, this is a big deal.

Germany, meanwhile, is holding its own as “consumers’ economic expectations and willingness to buy both rose, helping offset a slight decline in income expectations.” Germany is the EU’s biggest economy, so this is good news — but the study also signalled coming uncertainty over events in Crimea.

In news that may or may not affect the global economy but certainly affects the PLMish world, General Motors has announced the recall of nearly 4.8 million cars so far this year. Through several specific announcements, the company is now recalling its Chevrolet Cobalt and HHR; the Pontiac G5 and Solstice; and the Saturn Ion and Sky, from model years 2003 to 2011. News is still emerging about who knew what, and when, but the implications of a huge, extended enterprise and its data gathering and management practices –and the conclusions drawn from that data– will take center stage before Congress later this week when GM CEO Mary Barra testifies.

PLMish Deals, Earnings and Other News

In what may be a first this year, there were no acquisitions in the PLM world last week — perhaps because it was the last week in the quarter and everyone was busy closing product sales?

There was one notable tech acquisition, though, as Facebook bought Oculus for a ridiculous amount of money. The Oculus Rift is a virtual reality headset that came out of a Kickstarter campaign just 2 years ago; those funders got the first devices the company made, but the final, commercial version isn’t out yet. So why would Facebook pay $2 billion for this company? Because it has money to burn. But, seriously, it seems as though Facebook realizes that gaming technology has relevance far beyond World of Warcraft — and that gamers will test the !@#$ out of a device and render it suitable for broader use. Forbes gushed that this “Facebook just put itself ahead of the curve for one of the first times since its inception … [The Oculus prototype] feels — and this is a rarity in tech, or anywhere, for that matter — new. In Silicon Valley, that alone can be worth the price of admission.” We’ll see.

We also had some earnings news, as Exa announced solid results for Q4 and gave s very positive outlook for fiscal 2015. Q4 revenue was $15.2 million, up 16% year/year (y/y). License revenue was $12 million, up 14% y/y; project revenue was $3.2 million, up 26% y/y. Exa usually begins working with new clients via projects, so the growth in that part of the business is a decent forward-looking predictor of coming license growth. For the year, Exa reported revenue of $54.5 million, up 12%. In all, momentum seems to be building for Exa, with regulation continuing to push customers and prospects towards simulation. Exa’s ability to execute during the project phase of its client engagements while speeding up R&D will determine how FY2015 unfolds — but it looks like it’s going to be a good year.

Finally, Nemetschek gave more details about its fiscal 2013 with the publication of final figures.  Growth accelerated towards the end of the year, with Q4 coming in at €52 million, up 9% y/y, leading to full year revenue of €186 million, up 6%.  The Design segment, which makes up over 80% of the company’s revenue, reported that revenue was up 6% to €150 million. Growth was driven by sales of Vectorworks and Graphisoft, and slowed somewhat by shifts in the Allplan management team.

Link of the Week

A quick reminder: Cyon Research is doing its annual survey of CAD/BIM/PLM users. Go to http://t.co/TNWJfJz209 to take part and get a free copy of the results once they’re compiled.

That’s it — have a great week!

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