For a CAD package as firmly set on the desktop as Solidworks, its sales are growing remarkably. Not only is it stuck on the desktop but doubly-stuck in Windows. Yet sales in 2018 are "double-digit," as marketing people and financial analysts would tout. In the last quarter (January-March, 2018), sales of Solidworks licenses grew 13% over a year earlier.
This wasn't supposed to happen. This is, after all, the age of Onshape (the self-declared Solidworks killer) and Fusion along with the rest of Autodesk's "infinite" cloud marketing.
Heck, Onshape and Autodesk were so sure that the cloud (and rental payments) would form the immediate future of our industry that they... well, let's see:
- Onshape put itself into $160+ million in debt, but now has only "thousands" of paying users, as its co-founder told me last November.
- Autodesk's then-ceo gambled the entire company on rewriting everything for the cloud -- by 2015 -- but failed to reach the self-imposed goal.
Meanwhile, revenue from Solidworks, solidly on the Windows desktop, is up 13%, attaining $211 million this last quarter. Executives at parent Dassault Systemes are very excited about it reaching the magical $1 billion/year soon.
At one time, Dassault also thought like the Onshape/Autodesk duo. Solidworks would need to move to the cloud. "Kill the baby in order to save the baby," as management gurus intoned back when it was still okay to talk about killing babies -- as well as to use the term "guru." That was 2010.
Today, in 2018, Dassault is very excited that Solidworks runs on the desktop. It makes sense, because CAD work is done on local computers, which are dedicated and more responsive than remote servers sharing tasks at a latency-fouled distance away.
For Dassault, the cloud is an assistant to Solidworks, which is, of course, its proper role. "For the Solidworks users’ community, [3DExperience cloud platform] represents the opportunity to benefit from a wide range of cloud services, from 3DExperience PLM services, to Marketplace, or to Solidworks xDesign, a browser-based solution."
Dassault cfo Pascal Daloz explains where the sales are being made:
"One is basically the 2D-to-3D migration. And, frankly speaking, when I look at the 2D install base, we still have a lot we can do before to convert them into 3D 100%.
"Two, more and more we’re seeing a traction coming from 2D-to-3D migration. And as you may know with Solidworks [we have] significant market share gains [in] almost all the entry-level and the mid-range 3D solutions on the market.
"And last, but not least, we are basically complimenting the portfolio of Solidworks with new domains, like simulation, manufacturing, and so on.
"Now from a numbers standpoint, the 2D and the 3D migrations represent 70% of the revenue of Solidworks; 30% are coming from all the new expansion we do, like EPDM, simulation, manufacturing and so on.
"My last point is when I look at where the new license growth is coming for Solidworks, ...55% is still coming from new customers we’re winning. And 45% of the new license are coming from existing customers extending what they have."
Quotation and numbers source: https://seekingalpha.com/article/4165852-dassault-systemes-dasty-ceo-bernard-charles-q1-2018-results-earnings-call-transcript