Multiplexing cross-selling opportunities
Last week, executives of 3D Systems spoke with financial analysts. One asked about Cimatron, makes of CAM software, which 3D Systems recently acquired.
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Brandon Wright (Stephens): Just want to get a little bit of color on your expectations for Cimatron in '15. Obviously, with being software higher margin, [what] kind of the impact you see coming in there?
Avi Reichental (ceo, 3D Systems): From Cimatron we are looking to immediately have some cross-selling leverage, because they have a very strong [sales] channel, we have a very strong channel, and they are completely complementary in terms of the go-to-market strategy.
Cimatron also opened a very strong door for us into real manufacturing applications on the manufacturing floor. It extends our coverage; it multiplexes our cross-selling opportunities; and it carves out our software interoperability as we begin to look at 3D digital design and fabrication, both in terms of subtractive and additive.
Remember, too, that Cimatron has about 40,000 seats that have already been placed, [and] that could be very attractive targets to us, and a very, very good channel.
Now, let us talk a little bit about our overall software business. We have, in the last couple of years, complete realigned our software go-to-market strategy along the following lines:
We made it easier for users to enter it, so we lowered entry cost for end users and biased our model for annual subscription as we begin to introduce new designs, like our Capture and Capture Mini -- really sophisticated delivery containers for software.
The net result is that our maintenance and subscription revenues for software actually increased 15% in 2014. The overall combination of software subscriptions and devices actually increased 24% for the full year.
That is the kind of projector that we hope to evolve the Cimatron business on field as we begin to integrate it and leverage it throughout 2014, because that is exactly what we have done for our Geomagic and Rapidform businesses in the last 18 months and it is quite impressive outcome.
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