CAD Insider

Alibre for $99 - Is it Sustainable?

Established vendors will surely say $99 for full MCAD software is NOT sustainable. But I think what they are really saying is that $99 pricing is not sustainable given their own present business model. I am not privy to Alibre's inner workings, but I know from experience with other software companyies that high volume sales at low prices is very much a sustainable business.

Given that each additional Alibre CD will cost a couple of bucks to create and ship, $99 could actually generate a huge profit margin on each additional sale. Online distribution will be better yet. Yeah, yeah, I'm not including R&D, support, marketing, overhead, and so on....so let's call this short-term profit.

In the best case scenario, let's say this creates thousands of additional users. Not only does this create plenty of short term profit but creates a potential for Alibre's premium products and support. If you sign up for the $99 software, you will then encounter an invitation for various "upgrades."

You can get Alibre Design for a bargain basement price of $99 but not before you get an opportunity to "upgrade."

I doubt this will touch off a round of price cuts in the industry, primarily because Alibre just is not that big a player at the moment to affect the market. This is not like the airlines, when one carries offers a $99 coast to coast flight and others rush to follow suit. The airlines are in a hotly contested market with evenly matched contestants -- which is hardly the case in the software business.

So what will the execs at Autodesk and SolidWorks do. Even those who even admit to Alibre being competition will probably do nothing. Didn't Alibre do a similar stunt before with free software? [Alibre did offer Design Xpress for free, though at the time of this writing it was not found on the Alibre site]. Whatever happened with that? It wasn't like Alibre set the world on fire. If I were a software exec, I'd sit tight, business as usual. Not till I start losing a boatload of sales to Alibre do I need to do anything. 

Alibre for $99 - Money Isn't Everything

With a drastic price cut to $99 (from $999), Alibre could suffer a variety of outcomes, bracketed by these two extremes:

1. Nothing happens. Alibre succeeds only in lowering the perception of its own product as being worth what is paid for it, rather than establish itself as an incredible deal.
2. Alibre conquers the MCAD market. In doing so, it redefines a new price point for MCAD. It's competition goes out of business.

Current MCAD leading vendors will insist on the former. Alibre will hope for the latter. Most likely, the future will hold something in between.

With the drastic price reduction, Alibre does have an excellent chance of establishing itself as the clear leader among the also-rans of the MCAD market, a segment that includes IronCAD, Ashlar, Kompass 3D, SpaceClaim, VX, and others. But can it challenge SolidWorks, Inventor -- or even Solid Edge -- for midrange market dominance?

To forecast success based on a price cut alone ignores a myriad of other factors, least of which is Alibre's own commitment. Chopping 90% off the core product's price is gutsy, dramatic and bold, but the requirements leading to a sales and market success are actually far harder.

Now if I were king of Alibre, here is what I would do to ensure success after the dramatic price cut:

1. Beef up the support -- and don't charge for it.
2. Focus on robustness. If it is not yet robust, make it so. Then let the world know. Let the media spread the word about its low cost. It seems they have already started.
3. Stick with it. Alibre needs to have a $99 deal when customers are actually buying software -- that is not the case right now.

Users are actually less concerned about the cost than about being able to do their jobs. Calling Alibre to find out where a command is hidden or being able to upload a troublesome model and have it fixed would be priceless. Word of such support would spread like an uncontained virus in this age of social media. Alibre's first thought was probably to staff up the sales dept to handle the demand and charge for support. But I would let the orders come in over the Web, forget about trying to upsell for the time being, and double the support staff.

Robustness is a key issue, whether it is perceived or real. Alibre risks being dismissed outright just for its low price. "How can $99 software do what $3999 software can do?" Alibre is currently saying their software is "virtually" identical to its more expensive counterparts. Big mistake. While it may be true that Alibre can handle what most mechanical designers would require of it, the company is not realizing that most users overbuy software. They don't want to be limited. They don't want to work in fear that one day they will encounter a road block. Admitting to not being fully capable is tantamount to suggesting to customers that one day they will fail.

While perceived robustness may be addressed by marketing and PR, real robustness needs to follow close behind. Alibre has to plug the holes. It has to be able to keep up with the big boys. That 80/20 rule (get 80% of the capability for 20% of the cost) may have worked 20 years ago, but these days, people want it all -- cheaper.

Does Alibre have the stamina and fortitude to pull this off? Disappointing buy-in could cause the $99 price to be pulled. A twitchy Alibre may not take a chance that low sales at a $99 price would set up a top line that would eventually doom the company. But long term success and market penetration will only result if a low price point is firmly established and sustained. Alibre needs to be ready when customers are actually ready to buy. That may be months from now -- or more.

Alibre $99 Pricing Sends Shockwave

Alibre announced that it's MCAD software is now to be selling for $99 (see press release on TenLinks). It is a "limited time offer" but they are being cagey about the length of time. Alibre is claiming it is the full blown software, you will own it forever, no ads, no watermarks, no crippled features. This announcement sent shockwaves through the CAD industry media. It didn't take long for the blogs and tweets to light up. Here is a sampling:

• Alibre Design Standard for $99 - Deelip Menezes
• Alibre Slashes Price by 90% - Kenneth Wong
• $99 for Parametric 3D History Based CAD? Now That’s Negotiating! - Matt Lombard
• $99: Alibre Drives Down the Cost of MCAD (Temporarily) - Ralph Grabowski

It's an obvious move to gain market share. But will it? The simple answer in this economy is that price rules. But it's complicated. Initial cost is not the only expense. The bigger cost is investing time and effort in in learning, adapting, and incorporating software.

For years, I've wondered how AutoCAD could sell for $4,000 when all around it much cheaper alternatives have been available. Many of them free. Obviously, many other factors are in play.

Picture an engineering manager hearing about Alibre's $99 offer. Sure he could buy a license out of petty cash. But will he buy it for the whole department? Hmm... who else is using Alibre, he thinks, but can't think of anyone. What if I can't exchange files with my vendors? What if Alibre can't handle our designs? Does it crash? Will the other CAD managers laugh at me? Maybe I should just stay put... I've got a good job and nobody's going to fire me for using SolidWorks. Maybe I'll keep my head down and this will blow over.

SYCODE's Little Miracles

How often has this happened: you find your CAD software can't do something, though it seems so obvious that it should. You have promised that it could. A deadline looms, the boss comes by to ask "How's it going?" too often, failing to mask his desperation. But you can read his thought bubble which quite clearly says "If you don't make this happen, the customer is going to walk, I'm going to look bad, but you are going to pay." There's no time to call your VAR for support. So you scramble Google, hoping -- no, praying-- to find that miracle that will allow you to finish the job.

Something like that happened in our office, as our modeling division had promised a repair on a STL file, only to discover to its horror, that SolidWorks had no ability to edit STL geometry. We googled "STL SolidWorks conversion," said a short prayer, and found SYCODE's STL Import for SolidWorks, just such a product. A download, a quick install, and bam, we had converted the STL mesh to a solid, edited it in SolidWorks, and spit out a file for our customer. Done. Whew!

As it turns out, SYCODE has built a business of rescuing users. Its repertoire includes several utilities that fill in the gaps for SolidWorks, Inventor, AutoCAD and other CAD programs. I only tried two programs (the SolidWorks add in mentioned above and the standalone Mesh to solid) but the site has earned a bookmark on my browser. The programs are available fully functional on a trial basis so you can use them in pinch for real work. The ones I used allowed 10 uses, so if you need them for ongoing production work, you will have to buy them but the seem to be moderately priced (compared to the cost of your CAD program).

Programs seem to work as promised...mostly. Run into a snag and you can email SYCODE. You'll probably reach Deelip Menezes, owner and CAD insider. However, don't expect Deelip to be able to fix everything. Though the programs I used worked on smaller models, when I tried to use them on a more complex model (a 10MB STL file), they balked. One program displayed the hour glass forever, and I had to abort the program. Deelip says such big files routinely cause problems for his utilities. Still, overall I'd recommend a look at SYCODE's utilities, for when they do work, they are little miracles. Besides, it costs nothing to try.

Inspirational -- MoI Takes on the Industry

Tucked away in the very back of the SIGGRAPH show floor, far from the high-rent district occupied by the massive elevated constructions of Autodesk, Disney, Lucas Films and like, was Michael Gibson in a little 10x10 ft booth. Michael is the founder (and perhaps the only employee) of Moment of Inspiration, or MoI.

But of such humble surroundings may appear lessons for the entire industry.

Michael Gibson of MoI at SIGGRAPH '08, showing how even complex shapes can be created quickly and easily.

I had been hearing glowing reports about MoI from CAD insiders. The consensus was: a very easy-to-use CAD 3D modeling program. I was curious. I also wanted to meet what appeared to be one man, who all by himself, was taking on industry giants such as SolidWorks and Autodesk.

Michael Gibson says this is not quite so. My program does not do all the things those programs do, he says modestly. No drafting, for example. So, what does it do, I ask and sit down to find out. It turns out that it can model precise solid models of mechanical objects with surprising ease. He demonstrates, creating a part with several features in relatively short order.

I have seen a lot of demos, but this program did actually seem rather easy. There was little in the way of menu picks or even tool bar access. And that, Michael says, is how it got its name -- a moment of inspiration can be captured swiftly and painlessly in a model. 

It reminded me of SketchUp, which seems to do just that for architects. 

Michael draws attention to the UI, which seems to read his mind, offering parallels, reference points, for speedy modeling. By now we've all seen sketching aids like them, as they have made their way into even the most conservative of products, but MoI seems more telepathic than most. Have people from SolidWorks seen this, I ask, knowing of that company's recent push for a new easy-to-use interface. Oh, yeah, Michael says with a smile. I see them in the audience as I am showing the product.

For the big guys, a one man company selling a $195 product may be easy to dismiss. What kind of threat is that? But if they were smart, they would look into this further because here is just one man who has single handedly succeeded in making a truly, intuitive interface 3D modeling interface. Michael did not use focus groups or write a 100 page spec derived from hundreds of hours of research. He did not have to trust legions legions of developers to turn his vision into reality, allowing for the likelihood that his own moment of inspiration was to be waylaid, misconstrued or lost in translation through meetings, compromises, etc. He did not have to make concessions to an existing user base. This could very well be one person who has the the insight and the wherewithal to have created what is arguably the closest thing yet to an optimal interface, an interface so intuitive it almost disappears from view, telepathically connecting the user brain directly to the CAD program. 

CoCreate CAD Give Away

With CoCreate Personal Edition (PE), CoCreate joins the ranks of CAD vendors who give away a version of their CAD product. Over 50,000 copies of PE have been downloaded and registered. However, it is not known how many are in active current use.

The program file is about 90MB (which is small relative to the size of most general purpose CAD programs). To download it, you have to fill out a short questionnaire but it's fairly painless. After the survey, CoCreate shoots you a link via email to activate the product. After initial activation, the program must be reactivated every 72 hours. Geoffrey Hedges, the man behind the program, tells me the reactivation can happen often without the user knowing it. So why keep CoCreate PE users bound to the Internet? I'm still trying to figure that out.

Pluses

• up to 50 part assemblies
• no time limit
• no ads
• full 3D

Minuses

• users must logon on every 72 hours or program stops working.
• does not have advanced surfaces, threaded holes or hole wizard, sheet metal, CAM, FEA or other add-on modules
• data files cannot be read by commercial version. However, if customer upgrades to commercial version, they can upload all PE files and CoCreate will convert them to commercial version.
• no telephone support, no live support of any kind. tutorials are available online and a user forum.

You can download CoCreate Personal Edition for free here.

CoCreate Follow Up

CoCreate origins go back to the 1980s when HP took its in-house CAD system and spun it off, selling it under the names ME10 (for 2D) and ME30 (for 3D). It was reinvented as CoCreate a few years later, its name emphasizing collaboration. In fact, users in different location could work on the same model simultaneously.

That did not catch on, explains Ulrich Mahle, who heads CoCreate's marketing and R&D. "We found designers did not want to continually show their changes. They would rather just show the finished design."

So without the unique selling point suggested by its own name, CoCreate seeks to differentiate itself by another way and now seems to have found it. They call it "dynamic editing," the ability to change  a solid model without constraints, unencumbered by its history. Given that the current crop of popular solid modelers (SolidWorks, Pro/E, UGS, more) are all history based. clearly CoCreate has a challenge in convincing potential customers.

CoCreate is also different from other CAD companies in the following ways:

• Its product development cycle is characterized by quick 3-week iterations in which a task (like a new feature) is created and tested, rather than the more conventional one long development phase after which are code base are gathered up. In addition,  programmers work in pairs, each complementing the other. Daily show and tells keep the whole team aware of individual and total progress.
• CoCreate has no large overseas development staff. A main reason is the interplay that the above-mentioned iterative development process demands. According to CC, overseas development offers a false economy and its onsite developers are each worth multiple offsite developers.

Six week vacations are the norm. But when they are working, they put in the hours. "Nobody works an 8 hour day." Food at the very nice cafeteria is subsidized. I should have asked if CC is accepting applications.

An Introduction to CoCreate

Unlike most other user meetings, the CoCreate user meeting did not start until 11:30. I took the opportunity to get in a morning run through Sindelfingen, Germany, past a beer garden, through the quaint old town center, with shops, bakeries with pretzels, cafes and then to its outskirts past Daimler-Benz' largest manufacturing plant. Mercedes, headquartered in nearby Stuttgart, spreads its factories and offices around Sindelfingen as well, and I am told is also the town's biggest employer. However, the town does not seem to suffer too much from its industry, as do American cities. In fact, only once did I hear the clanging of metal. Certainly, my lungs appreciated the crisp, clean air.

William Gascoigne, CoCreate CEO, addresses the crowd of over 360 users in Sindelfingen, Germany.

I asked if Daimler-Benz was a CoCreate customer? Not even one seat, said Dr. Thomas Roser, CoCreate's Europe Marketing Manager and the emcee to the one-day user meeting. "Not our type of customer." CoCreate's niche is high tech electronics firms, a specialty that harkens back to its birth, when it was an in-house tool of Hewlett Packard. But even within such firms, CoCreate counts most of its 11,500 customers (and over 100,000 seats) in Europe and Japan. Though CoCreate maintains a small office in Ft. Collins, Colorado, the US market is still one that needs to be cracked. Only 15% of its users are in the western hemisphere, compared to 47% are in Europe, and 27% in Asia

Consequently, its user meetings are held only in Japan (650 attended the last one) and in Germany, where on this day over 360 were present.

Dynamic Modeling

If CoCreate had a company face, it would be grinning ear to ear. Recent media coverage has been favoring history-less solid modeling (the chief practitioners being CoCreate, who calls it "dynamic modeling," and Kubotek) and quotes from well known industry writers lit up the big screen. Customer presentations were also on message as customers extolled the "flexibility" CoCreate gives them and the ability to quickly change existing designs. One customer (Xenon) explained how designing a new assembly machine from an existing design made them ever so thankful of having CoCreate to do it with, as opposed to the (far more common and way less flexible) history-based solid modelers.

The House of Payne: SpaceClaim

During the lovely dinner as we floated down the Siene, most of the journalists were happy enough at being invited to Autodesk's press event in Paris that the conversation stayed light and pleasant. But one among us could not be contained. What do you guys think about SpaceClaim, he asked of Autodesk.

What followed was a round of product and company bashing. They won't amount to anything. The revenue model is flawed. Blah, blah, blah. That was typical, you can expect any competition to be trounced in such a context. But what interested me was that everyone at the table had heard of SpaceClaim, a company in its infancy, one with scarcely a customer. It was like an elephant noticing a flea.

What make SpaceClaim so noticeable? I've seen the product early on, before its release. Sure, it looks easy enough to use--but so do many others. It puts out a inordinate amount of press releases, for sure. It seems to have created some interesting relationships among CAD vendors, ostensibly partnerships, even to the point of finagling a booth at the upcoming Autodesk University -- a venue in which Autodesk has strictly forbidden competition. No, it has to be more than all that for the entire industry to take note...

I think the  buzz is due to Mike Payne, CEO of SpaceClaim. You see, Mike has the enviable pedigree of starting PTC. He followed that with SolidWorks. Is SpaceClaim the Third Coming?

The 3D Jackpot, Part 2: MCAD is Powerful, Easy to Use, Or Cheap (Pick Any Two)

Las Vegas, where entirely too many CAD shows are held, is the only city I can identify by sound. The second I enter the airport I am greeted with the jangling disorienting musical tones of the slot machines, a perpetual background. Every now and then, the sound changes as some lucky player is rewarded and coins spill from machine. Still, the big jackpot, the giant dollar sum in blinking lights above, still taunts and beckons. Players move from one machine to another, but the jackpot stays just out of reach.

For the CAD industry, the jackpot is the conversion of millions of 2D CAD users to 3D. Though there have been some small payoffs as hundreds of thousands have converted, but the big jackpot awaits the player who can convert the millions. That jackpot is worth billions of dollars. CAD companies mill about wondering how to get the jackpot.

Yet, from a user standpoint, the answer is ridiculously easy. All that is needed is 3D software that is powerful, easy to use and cheap.

Currently, you can only get 3D design software that is powerful, easy to use OR cheap. Pick any MCAD software and it will satisfy one or two of the requirements. Nobody's software is at once powerful, easy to use AND cheap.

• Next: Who You Calling Cheap? - a definition of terms.
• Still to come - Where current MCAD programs fall short.