CAD Insider

Dassault Systemes: Elite Status Not Enough

LAKE BUENA VISTA, Florida (2008 COE* Annual PLM Conference) Dassault Systemes is a company best known for CATIA, which, in turn, is best known for designing airplanes and cars. CATIA's firm unshakeable hold on the automotive and aerospace design market is due to its power, depth and complexity. Its elite status in the CAD community is assured. However, it is precisely that status that Dassault needs to get behond in order to achieve the next stated goal: to provide the 3D software of choice among non-designers and non-engineers.

Dassault Systemes CEO Bernard Charles talks to himself in a virtual appearance at annual user meeting

Respect from engineers notwithstanding, there are only so many big auto companies and even less aircraft companies. How is a company supposed to grow in such a limited market? Dassault could mine its customers good will and sell more products to the exiting base (Dassault's portfolio does contain over 160 products), they can get new customers by acquisition (MatrixOne, SolidWorks, ICEM, etc.) but their goals are even more ambitious. Seizing on its roots in 3D technology, why not drive 3D data to the purchasing agent, to the sales people, to management? And once 3D has spread to the entire company and over the walls to vendors and customers, why not shoot for the sky: the consumers market?

I'm trying to imagine how Dassault products would appeal to consumers. I imagine a Game Boy version of CATIA, flashy and fun, but the image breaks up. Wasn't there a Cosmic Blob that did some fun modeling by SolidWorks? Whatever happened with that?

3DLive uses turntable interface for exploring components in an assembly

Bernard Charles, CEO of DS, shows the assembled audience some new stuff. Bernard is not here in person, but there are two of him on the screen. One is an avatar (surely you must have made one of yourself  on Second Life?) and the other is a video image. One of them apologizes for not being here in person, this being the first COE he has missed. But I think he is making a point. He is here virtually, in multiple ways, in 3D. Physically being here is overrated.

The Bernards go on to show me bold, brave, fun things, all 3D. One product takes not only disassembles a 3D model of a machine but puts it on a revolving turntable (see picture). Some one was eating at a Chinese restaurant when they thought of this. Not very CATIA-like, to be sure, but maybe because of that, its animated interface, uncluttered with menus and devoid of complex command chains, is easy to understand. If I was a purchasing agent, I wouldn't be scared of CATIA and 3D solid models any more. I'd be thinking "Yeah, I can do that."

I scan the audience for a response but these guys are like poker players. I can't quite read them. It's an older crowd than you'd find at the SolidWorks meetings. They are here to educate themselves mostly, add to their expertise of CATIA, of SMARTEAM and take that knowledge back to their companies. They need to make their landing gear parts, their automobile hoods, tame the bursting database that holds the metadata of an entire jet aircraft. They are many who are top guns with many years of CATIA experience, but right now they look like dads who are worried about their jobs or their work going overseas and how they are going to pay the kids college tuition.

Picking up tips and tricks in the classes are going to make them indispensable. When the virtual Bernards are finished on the main stage, they trudge off to the class rooms. Must learn more. Must work harder.

*CATIA Operators Exchange, the CATIA users group.

The French Connection - IBM and Dassult

The IBM/Dassault reletionship was once very easy to understand: Dassault made the CATIA software and IBM made the workstations the software ran on. Remember those specialized and very expensive CAD workstations with special hardware controls with rotating knobs for 3D? Now that those workstations are gone and IBM's role seems to be selling and supporting Dassault software in US and Canada. But lately IBM has been phasing out its service relationships. So what is the current IBM/Dassault relationship?

At the recent COE 2007, officials from both companies tried to assure us the Dassault/IBM relationship is stronger than ever. IBM confirmed that they will be handling a smaller number of customers and customers will be  transitioned from IBM coverage to Dassault coverage. However, IBM still states adamantly that it is not phasing out Dassault, and is in fact, keeping "1200 of  the biggest customers." Dassault says IBM is selling even more Dassault products.

Probably the most curious aspect of this relationship, which has spanned 25 years, is that both parties have remained faithful to each other -- at least in the US. Though there has never been a contractual obligation of exclusivity, neither party has offered rival products and services.

It's hard to believe a handshake still works.

ICEM: If You Have to Ask, You Can't Afford It

LAS VEGAS, NV (COE 2007), April 30, 2007 - Some highlights from press conference held by Dassault:

• ICEM will continue to support interfaces to CAD products, even if they compete with CATIA and SolidWorks. "It makes us look good to have our competitors use our products."
• There are no plans to change the pricing for ICEM, which now "starts at $35-40K." Asked if this was the most expensive product in Dassault's portfolio (Dassault's average selling price is about $16,000), Dassault's Andy Reilly smiled and indicated, no, not by a long shot.
• Asked to confirm a rumor that the acquisition of ICEM was a result of Dassault's inability to create the same tools in house, Reilly said this was not the case. There was no large scale scale development project that Dassault was scrapping. Dassault does have various surface tools, that's true, but development of high end surfacing as found in ICEM was not under development. The surfacing tools already developed at Dassault can and will be used with ICEM.

Dassault Buys ICEM, Part 2: Lots of Happy People at ICEM

LAS VEGAS, NV (COE 2007), April 30, 2007 - Being at the annual CATIA user meeting gave me a chance to follow up on "Dassault Systemes Buys ICEM: Ongoing Consolidation," which appeared here yesterday.

ICEM got its start at Volkswagen, where it was developed in house for doing styling. In 1998, PTC bought ICEM for $41 million to "get into Ford." This did not achieve the desired results. PTC unloaded it 4 years later in a management buy out. Though the price was disclosed at the time, PTC tells me they sold it for $10M. PTC may have lost $31M on the deal but it was quite a bargain for as ICEM's management as ICEM's revenue (now) are about $20M annually.

All told, ICEM as it netted a total of over $100M from the deals ($31M profit after PTC plus the $70M Dassault is paying now) -- a very nice turn of events for whoever has equity in ICEM. ICEM has about a hundred people so that's an average of of $1 million per employee -- though I doubt it is distributed that way.

Dassault Systemes Buys ICEM: Ongoing Consolidation

Dassault recently announced it was going to buy ICEM (see press release). Is this yet another example of a big CAD company gobbling up a smaller one? Or does it change the game?

The other leading surface modeler, Alias, was acquired by Autodesk more than a year ago. This did not seem to ring alarms with high end MCAD vendors who probably expect Autodesk, a self-professed vendor of CAD for the masses, to relegate Alias to the design of toasters and toothbrushes. Autodesk would not be expected to encroach on their contracts with Big Auto, Big Air and "Tier 1" suppliers, the most highly coveted customers in the CAD world.

But Dassault buying ICEM -- that's a different story.

Lamborghini Murcielago -- styling by ICEM.

ICEM is already in use by automakers, aircraft and consumer product companies world wide, the giants in industry. It is widely recognized as an industry leader in sophisticated surface modeling. A win with these companies can mean thousands of licenses of CAD software, continued revenue with annual maintenance fees, earn big-time bragging rights for the vendor -- not to mention make a salesperson's career.

With ICEM, Dassault has gained important technology that is valuable for manufacturing companies in automotive, aerospace and consumer products. These companies may have used ICEM for surfaces while using MCAD products such as Pro/ENGINEER and Unigraphaphics for modeling and manufacturing. Dassault may hope to exploit the ICEM/CATIA connection, a strong connection already but bound to only get stronger now that the products are under one roof. Does this place existing PTC and UGS installations at risk and give Dassault an extra advantage for new sales?

Leveraging ICEM to gain shares in the automotive market is what PTC hoped to do when it acquired ICEM in 1998. PTC must have had little success, as it unloaded ICEM only four years later, spinning it off as a separate company.

Probably the competition most affected is UGS which until now could claim it had a more robust surface product than CATIA.

While Dassault may not entirely change the game with this acquisition, it does scores an important victory in the minds of all CAD users with this acquisition. Dassault's CATIA already enjoys a rarefied reputation among engineers. Ten years ago, CATIA had already been used to model the entire Boeing 777 -- down to the nuts and bolts. This was when other MCAD products were still getting off the ground (get it?) proudly showing a landing gear assembly with dozens, that's right, dozens of parts. Now add to CATIA's reputation with a product that can create the sexy curves of the world's most seductive cars and you have a killer combination of strength and sex appeal.