How Dassault Bought SolidWorks and Not Solid Edge -- the Inside Story

BARCELONA, Spain (SW Press Event), September 18, 2008 - Most CAD insiders know Dassault Systemes owns SolidWorks. But it was not revealed until today that Dassault could easily have bought Solid Edge instead.

Bernard Charles, CEO of Dassault Systemes, here on stage for SolidWorks Press Days in Barcelona, tells us the story:

It's France, 1997. Charles gets a call at Dassault's HQ from Jim Meadlock, then the CEO of Intergraph, who wants to meet right away. Charles jumps on the Concorde (which he ruefully recalls with Gallic pride), to meet Meadlock in New York City. Meadlock wants to sell off Solid Edge and wants $120 million for it. On the way back to Paris, this time on a slower airplane, Charles has time to reconsider. Intergraph sells Solid Edge to Unigraphics a year later.

A month later, Charles meets with Jon Hirschtick, founder and then CEO of Solid Works. "It took 6 months to convince Jon to sell SolidWorks," says Charles. Hirschtick and Charles eventually agree on a purchase price of $350 million.

Now all Charles has to do is convince the Dassault board of directors. The agreed upon price for SolidWorks is 20X revenue, a price based more on the promise of success than conventional business wisdom. "I gave them a choice of Solid Edge or SolidWorks," says Charles, but he was betting on SolidWorks. "Intergraph did not know how to sell Solid Edge." By comparison, after only a couple of years, SolidWorks has not only a plan but a loyal and enviable dealer network.

Charles' bet is now paying off: SolidWorks revenue for 2007 revenue was $350 million and for years, it has been the MCAD program all others are judged by.

Comments

[Tony]

This doesn't say much for Daussault, specifically in their ability to sell (or confidence in their ability to sell).

Basically, they bought SW instead of SE because SW had a better sales team. (And a comment on that - I wonder how important VARs are to most customers...I suspect a lot less important than Mr. Charles implies.)

[Evan Yares]

Though Solid Edge had a slower start, and still doesn't have the channel that SolidWorks does, it has, for many years, been an extremely capable program.

Competitors, such as Dassault, may dismiss it publicly, but I seriously doubt they do so privately.

Changing the subject, here's another Concorde story, as told to me by Pat Hanratty, the creator of Anvil, the first commercial integrated CAD/CAM program:

British Aerospace (a partner in creating the Concorde) was one of Pat's customers, and so Pat, along with his son Brian (a manager in his company) would fly out to visit them periodically.

During one visit, the person they were meeting with mentioned that BA was doing some flight testing that day, and asked Brian if he happened to have his logbook with him. (Both Brian and Pat were experienced pilots.)

Brian isn't in the CAD industry anymore, but has a nice souvenir from that time: A pilot's logbook that shows he flew the Concorde.