Quite a bit less than we'd guess
For us, CAD software is our lives; for Trimble, not so much. The current priorities of the management of any public company are made public for an hour every three months during their conference calls with financial analysts. During this time, they trot out happy numbers and exciting plans designed to keep the share price up.
(Sometimes management just grasps at anything. I recall a conference call from American Eagle, the clothing store, where management promised higher sales through... a new line of printed Ts [t-shirts]. Printed Ts aren't selling so well anymore.)
It turns out Trimble is a hardware company. Not a surprise, given that they are best known for selling equipment to surveyors. This was the first time I read through a Trimble conference call following their purchase of SketchUp and other CAD-related software. I was curious how much of the talk in the 11,000-word transcript would involve CAD.
Short answer: none, in that "CAD" was never mentioned. What was instead spoken about and reiterated was upcoming US government bills. When the US federal bureaucracy decides on another spending spree (highways) or safety upgrade (railways), then Trimble makes money selling hardware to the lucky few contractors who land the work. (Link to Trimble's products page: http://www.trimble.com/Product/products_main.aspx.)
CAD did came up when one analyst asked about it, under the guise of "construction software solutions":
Andrea James (Dougherty): What are your thoughts on the construction software solutions you have pulled together? I feel like it's really only recently that you really pulled it all together. So I guess, is there any inflection point coming soon and when you really start to get excited about it throwing off, I guess, real fruit?
Steven Berglund (Trimble Navigation CEO): We did roll out at Dimensions [Trimble's bi-annual user conference] in November, we did roll out Trimble Connect [ex-GTeam BIM collaboration software acquired from Gehry Technologies], which is the fruit of some number of years and a significant amount of investment coined together in one platform that starts to unite all of our construction offerings.
So I don't know if there is a magic moment; this will be progressive. That's just the opening salvo. There will be new releases coming continuously on that, in every some-number-of-months. But I think that we are seeing the benefit of -- let's call it -- a disintegrated approach on software, but it's really in terms of the total Trimble franchise.
I will point Ekholm as an example, simply because that has been in press release, but the ability for Trimble to come in with a significant portion, if not all of the portion, of the technology solution that we will generate the 25% to 30% project savings potentially gives us a significant competitive advantage, gives us a significant claim on the share of wallet that's being used for technology acquisition. And so I think that we're already seeing the benefit. Maybe not all of it is public at this point in time, a lot of the participants do not want to be press-released, but it gives us a significant market position.
That does result in software revenue sales, but it also pulls the hardware along with it, because what we're selling is a bundled solution to a large extent and the software is optimized to work with Trimble hardware -- even though it would work with anybody's hardware, as well.
I'm not sure that I would want to describe it in terms of some magic moment that creates a real inflection point. I think this is simply an everyday-taking-a-few-more-steps-ahead sort of market.