This week, upFront.eZine has for your reading pleasure:
1. 11Q2: PTC Returns to the CAD Bandwagon
2. Photos from my Son's Wedding
You can read all about this week's business of CAD at www.upfrontezine.com/2011/upf-690.htm
This week, upFront.eZine has for your reading pleasure:
1. 11Q2: PTC Returns to the CAD Bandwagon
2. Photos from my Son's Wedding
You can read all about this week's business of CAD at www.upfrontezine.com/2011/upf-690.htm
by Jay Vleeschhouwer
Following on its product launch webcast of last evening, Autodesk today formally unveiled its regular annual product releases. The "2012" releases comprise its two largest standalone products – AutoCAD and AutoCAD LT – and of course the portfolio of manufacturing, AEC, and infrastructure products. These include the AutoCAD-based vertical products, as well as Inventor, Revit, Moldflow, NavisWorks, and so on.
The new “2012” products will commence shipping next month, and then the roll-out will continue thereafter depending on country and language.
Suites, Suites, Suites
The main news – and indeed the main thrust of the product strategy and main theme of the recent One Team Conference for the resellers – is suites. Autodesk unveiled Building Design Suite, Autodesk Design Suite. Infrastructure Design Suite, and Product Design Suite.
With respect to the suites, I would highlight the following:
The Adobe Effect. Autodesk has already had about a dozen or so suites in the market, producing FY11 revenues of $440 million, up 26% (including maintenance revenues). Adobe is often used – and rightly so – as a basis for comparison for Autodesk’s long-gestating suites strategy, especially given the massive impact that Creative Suite has had.
It’s interesting to note, though, that when Adobe launched Creative Suite in late 2003, the company had already been generating about 10%-15% of revenues from the predecessor “bundles” and “collections.” However, Creative Suite multiplied the suites revenue over the predecessor products, especially after the expansion and segmentation of the product line starting in 2007. Creative Suite revenues were nearly $1.3 billion in FY10 vs. combined Adobe/Macromedia suites revenues of about a quarter-billion dollars in 2003.
Autodesk already derived 22% of its revenues last year from suites – a higher starting point than Adobe’s – so it’s somewhat closer to being able to derive the bulk of the product revenues eventually from suites rather than standalone products. That would be consistent with empirical mix trends in the design software market.
Standard-Premium-Ultimate. Autodesk has taken the “classic” and correct approach of segmenting the suites by Standard, Premium, and Ultimate. The odds are that the mix will gravitate to the Premium/Ultimate configurations, just as we have seen with the mix of Creative Suite configurations. Design Premium alone probably does at least as much in annual revenues as Autodesk’s existing suites do combined. The same is true elsewhere in the CAD market, e.g., SolidWorks’ mix.
The richer mix will not only aid initial license ASPs [average selling price], but will also aid maintenance revenues, thus enhancing the existing trend of increasing average revenues per maintenance seat. We can infer that suites are already generating over $100 million a year in maintenance revenues, if the suites-maintenance/total-suites revenue ratio is at least comparable to the corporate average, which is likely the case.
Upsell, Cross-sell. In addition, given the size of the standalone products base, there is likely to be a considerable up-sell/cross-grade opportunity (just as Adobe did with Photoshop). While “installed base” is not necessarily (and is hardly ever for an older company) the same as the active base (via new units, upgrading and/or maintenance), it is worth pointing out that the bases (I infer) for standalone AutoCAD and vertical AutoCAD (i.e., Mechanical, Map, and Architecture) are about 3.1 million and 1.7 million, respectively, as of the end of FY11. In addition, the cumulative base for Revit may very well exceed 300,000 licenses, also as of the end of FY11.
Independent of the suites-centric launch event, the company’s 10K for FY11 has been filed. As always, there is a plethora of useful information:
Segment revenues. Net revenue for Platform Solutions increased 15% during fiscal 2011, primarily due to a 20% increase in revenue from the AutoCAD and AutoCAD LT products. From this we can deduce that standalone AutoCAD revenues were about $370 million and that “LT” revenues were around $285 million (both, therefore, are roughly at FY06 levels. Given Autodesk’s disclosed percentages, there are bound to be relatively minor $5-$10 million a year in rounding errors for these product inferences).
For fiscal 2011, revenue from model-based design products increased 18%, which follows the 19% decline in FY10.
Net revenue for Media & Entertainment increased 5% during fiscal 2011, primarily due to a 5% increase in Animation products (to about $133 million) and a 3% increase from Creative Finishing (to about $65 million). The increase in Animation revenue was primarily due to a 4% increase in revenue from Autodesk 3ds Max (to about $55 million, ). Importantly the M&E gross margin was around 78%, a vast improvement from the 55%-56% of five to six years ago (in absolute terms, this segment has contributed an incremental $58 million to gross profits as compared with FY06).
Units. During FY10, 29 points of the 44% decline in commercial new seat revenues was the result of unit declines; during FY11, 28 percentage points of the 31% increase in commercial new seat revenue was due to the increase in the number of seats sold, thus not fully recouping the drop during the recession. Still, Autodesk remains by far the highest volume supplier – and largest installed base supplier – in its peer group. Given its multiple addressed markets, and large installed base across the segments, there would seem to be a considerable “upsell” opportunity to the suites, just as Adobe has done with Creative Suite.
When we look at the data for FY09 – the last full year for which detailed product unit information was given – we can count over 700,000 new units of “design solutions” products; given the decline in FY10 and then rebound in FY11 we can infer that Autodesk very likely have shipped over a half-million new units, and perhaps closer to 600,000 new units, last year (plus another few tens of thousands of M&E products).
In the Manufacturing market, though, it appears that while Inventor rebounded well in FY11, it continues to trail Dassault’s SolidWorks in both new units and active maintenance paying base.
In FY11, the Americas had the fastest new seat revenue growth, at 33%, with Europe and Asia/Pacific tied with 24% new seat revenue growth last year; by contrast, in FY10, Europe had a 50% drop in new seat revenues, followed by a 38% drop in Asia/Pacific, and a 27% drop in the Americas.
Thus, over the past two years, the Americas has recovered the most ground in terms of new seat revenues, while Europe is, proportionately, the laggard; on the other hand, Europe is doing relatively well in terms of maintenance revenue comparisons.
Maintenance. The 10K indicates that maintenance billings increased by 14% last year, from which we can deduce that actual billings were around $825 million (during the recession year of FY10, billings had declined by 7%).
“The 7% increase in commercial maintenance revenue was due to a 5 percentage point increase in net revenue per maintenance seat and a 2 percentage point increase in commercial enrollment during the corresponding maintenance contract term. Commercial maintenance revenue represented 98% of maintenance revenue for both fiscal 2011 and 2010” (italics added). The aforementioned increase in net revenue per maintenance seat follows the 8% increase in FY10, thus underscoring an essential long-term mix-driven trend in the maintenance business. Commercial maintenance accounts for 98% of total maintenance revenue (notwithstanding the substantial adjustment Autodesk made in the total “subscriber” seat count a few years ago to take into account the educational seats).
Distribution. On the whole, the indirect channel accounts for 85% of Autodesk’s revenues, a fairly consistent proportion even as the number of larger deals (e.g., “national account”) has grown.
Tech Data accounted for 16% and 14% of total revenue during fiscal year 2011 and 2010; this proportion is up from 12% in FY07 (the four-year CAGR in Tech Data revenues to Autodesk would be about 9%). Thus, Tech Data remains the largest distribution partner globally; no other distributor accounted for more than 10% of the business. Though not mentioned in the 10K, the one partner that would come closest to that proportion would almost certainly be Mensch und Maschine, which has the second-largest share of revenues in Europe, Autodesk’s largest region by revenue.
Here are my favorite lines from Autodesk's conference call last Thursday with financial analysts:
"When you SKU by SKU, you don't see great variability in ASPs."
"I think, some of this is a potpourri of stuff. I mean, it's labeled that way."
"Or kind of what is that?"
"And then a more broadly kind of derivative question: is the new categorization of new and adjacent-- it's kind of a bunch of different products."
"So hopefully, that algorithm answers your question and gives you a little perspective as you start to model that going forward."
"We don't guide that per se forward-looking."
"Certainly, there is a lag effect to your point."
by Jay Vleeschhouwer
The following are several items from the 144-page 2010 10-K report that seemed interesting or incremental. The Adobe text is in italics followed by some of my comments on the text.
Creative Solutions. The increase [in Creative Solutions segment revenues] was driven largely by a 23% increase in both Creative Suites and Photoshop point product revenue as compared to the prior year. The overall number of units licensed increased 23% when compared to fiscal 2009. Unit average selling prices, excluding large enterprise license agreement (“ELA”) deals, remained relatively stable during fiscal 2010 as compared to fiscal 2009.
From this we can deduce that Creative Suite-only revenues were approximately $1.3 billion in FY10, which would be the highest fiscal year to date since Creative Suite launched in 2003. (However, 4Q10 Creative Suite revenues do appear to have been slightly less than the 4Q07 revenues for CS3.) Creative Suite revenues had been up by 7% in FY08 and then down by 15% in FY09. The “stable” ASP [average selling price] is historically not atypical, though there was perhaps some expectation of at least a modest increase, given the Creative Suite mix and new unit price changes for some CS5 configurations vs. CS4.
The cumulative Creative Suite revenues to date are more than $5.4 billion.
In addition, we can deduce from the 10-K text that Photoshop family revenues were in the neighborhood of $460-$470 million, including a substantial incremental contribution from Photoshop Lightroom. Full standalone Photoshop (including incremental sales of the high-end Photoshop Extended) is probably back to around the pre-recession levels, while the smaller (by revenue) consumer-oriented Photoshop Elements may not have gotten there yet during FY10.
We should keep in mind too that the total revenue “footprint” of Photoshop should also include the imputed value of Photoshop within Creative Suite (that’s probably the equivalent of another couple of hundred million dollars, at least). The magnitude of Creative Suite revenues is roughly three times that of the suites revenue for Autodesk, the point being that while the addressable markets and users are not precisely equivalent. As the highest volume supplier in technical software there should be a good incremental revenue opportunity for Autodesk’s new emphasis on the suite strategy.
Subscription revenue. Of the $386.8 million and $74.6 million in subscription revenue for the fiscal years 2010 and 2009, respectively, approximately $309.1 million and $22.2 million, respectively, is from our Omniture segment with the remaining amounts representing our other business offerings.
The remaining non-Omniture subscriptions revenues therefore were about $77.7 million, or just 2.2% of total revenues minus total Omniture revenues. (In FY09 the non-Omniture subscription revenues were about $52 million.) This relatively low proportion of such recurring revenues remains an important opportunity for Adobe in terms of growth and business model evolution through, for instance, the provision of new services to its sizeable installed base. In principle, as Adobe ramps up the CS Live services, form instance, assuming a reasonable adoption within the eligible part of the Creative Suite base, such services could become an eight-figure business over time, thus adding at least a couple of points to the revenue CAGR.
Reporting segments. Effective in the first quarter of fiscal 2011, we plan to modify our segments due to changes in how we operate our business. We intend to split our prior Creative Solutions segment into two new segments: Digital Media Solutions and Creative and Interactive Solutions. Digital Media Solutions will contain our imaging and video products for professionals and hobbyists, whereas Creative and Interactive Solutions will contain our Creative Suite family of products including our professional page layout and Web layout products. We also plan to merge our former Platform segment into the new Creative and Interactive Solutions segment to better align our focus with market trends and our opportunities. In addition to our business unit reorganization, we plan to move several products to different businesses. Our Scene7 products will be moved from our Creative Solutions business to our Omniture business; our ColdFusion products will be been moved from our Platform business to our Print and Publishing business; and our Presenter product that is part of our Adobe Connect offering will be moved from our Knowledge Worker business to our Print and Publishing business.
Assuming there will be revised historical data available for the new segments, we can then fine-tune the amount of revenues for some of the specific products that have been moved around (as has occurred on prior occasions when the segments have been redone). In the meantime, the inferred revenues for Scene7 are about $40 million (± a few million) and for ColdFusion in a range of around $40-$50 million (if right, then not much changed from the levels prior to the acquisition of Macromedia). .
Mobile revenues. Platform revenue includes revenue related to our Mobile client products of $25.7 million, $51.3 million and $113.1 million for fiscal 2010, 2009 and 2008.
All else being equal, the Mobile revenue decline over the past two years was the equivalent of (2%) to the overall corporate growth rate. (FY08 was the peak year, as Adobe has since superseded the former royalty-based model.) The revenue effect of the expansion of the mobile market will be felt more substantially elsewhere – and across multiple products – for Adobe.
Restructuring. During fiscal 2010, we continued to implement restructuring activities under this plan. We vacated approximately 50,000 square feet of sales and or research and development facilities in Australia, Canada, Denmark and the U.S.
Marketing. Advertising expenses for fiscal 2010, 2009 and 2008 were $65.9 million, $67.0 million and $67.1 million, respectively.
Marketing spending related to product launches and overall marketing efforts to further increase revenue was up 3% in FY10, after having been down by 4% in FY09.
Non-GAAP reconciliation items. Amortization expenses for purchased technology and other intangible assets are expected to be $102.3 million in FY11 and $72.1 million in FY12, as compared with $156.7 million in FY10.
by Jay Vleeschhouwer
Dassault Systemes' SolidWorks, the company’s second-largest brand in terms of revenues, held its annual SolidWorks World conference for users, resellers, third-party developers, and other partners. The event is comparable to Autodesk’s annual Autodesk University and Parametric Technology’s annual event. SolidWorks has used the event each year to highlight new technology and products, corporate strategy, and its view of the market.
The CEO of the parent company made his second appearance at the opening general session (last year was the first such appearance), underscoring how Dassault’s management wants to have SolidWorks perceived and managed as an integral part of the entire Dassault portfolio of brands and strategy. in other words, for the Solid Works base, no more "Dassault who?" At the practical level, there is more technical collaboration occurring than was the case for most of the period of Dassault's ownership, which began in 1997. This collaboration is notably occurring with respect to on-line technology and offerings, under the overall V6 rubric, and with respect to CAD technology as well.
In terms of business conditions, as we reported over the course of 2010, the leading CAD and PLM suppliers saw their businesses recover from the steep declines of 2009, though not all segments were back to pre-recession levels. Autodesk's Inventor (the largest component of their Manufacturing Solutions Division) and Parametric's Pro/Engineer are SolidWorks' main competitors in the CAD market. SolidWorks' active maintenance-paying base is larger than that of either of those other products' bases. (Inventor is much closer to SW than is Pro/Engineer.)
How the Competition Compares
Through the first three quarters of its current FY11, Autodesk's Manufacturing division's revenues were up 21% year/year over the comparable period (though total revenues were still less than the same period two years earlier). I estimate that for 4QFY11 (ending January 2011) Autodesk's Manufacturing division will report revenues above those of the same period two years ago.
Similarly, PTC has just reported an 8% year/year increase in its desktop business (comprised mostly of CAD), and, as it turns out, the total of license, services, and maintenance revenues was slightly more than where it was in the same quarter two years ago.
My sense from the conference is that SolidWorks’ business also has indeed continued to improve. For 4Q10, to be reported on February 10th, I expect the "Mainstream 3D" segment, which includes SolidWorks' CAD and other related non-CAD products, to report about e82.5 million, up 29% year/year (Mainstream had been down 15% year/year in 4Q09). These results would bring full-year segment revenues to about e311 million, up 19%. For Dassault as a whole, I'm assuming e421.7 million, up 24%, and non-IFRS earnings of e0.67 a share, down 5%; these results would bring FY10 revenues to about e1.52 billion, up 22%, and earnings of e2.29 a share.
My 4Q10 Mainstream segment estimate assumes nearly 12,000 CAD units, up 18%, CAD-only license/maintenance revenues of over e68 million, up 23%, and non-CAD (i.e., simulation, PDM, Composer) of more than e14 million, up 66%, including new units and maintenance. Given the volumes through 3Q10, these estimates would imply total 2010 unit volume for SolidWorks in the low-40,000 range. By comparison, I am estimating 30,000+ for Inventor for the trailing twelve-months, and about 19,000 for Pro/Engineer, which, in the final quarter of calendar 2010 -- its 1QFY11 -- had its best quarter in over three years.
The SolidWorks volume for 2010 was up from the depressed levels of 2009, but only back to around the range attained in 2006; I suspect however that the goal for 2011 will be try to get back to the high-40,000 range reached, pre-recession, in 2007-2008. In the meantime, however, nearly two-thirds of total Solid Works CAD revenues is from maintenance, or an estimated e160-e165 million in 2010, up year/year as new licenses and maintenance attach/renewal rates improved, as was the case for the peers.
For the industry, therefore, if we add the combined volumes for the principal products, we can estimate there were about 125,000 new units in 2010, vs. more than 140,000 in 2008 and about 105,000 in 2009. Missing of course are the invisible Siemens PLM data, but the overall conclusions about 2009-2010 industry decline and recovery should not be much different.
While non-CAD products still account for under a fifth of mainstream 3D segment revenues, the proportion has been growing. Indeed, this proportionate non-CAD growth (all from acquired products) has been a management imperative, as it has become increasingly evident that SolidWorks can no longer rely on being only a one-product company. The technical differentiation from Inventor has become harder, necessitating more effective selling or relationship building via the channel and the focus on integrated "solutions" (tantamount to "suites," without the explicit packaging). Autodesk is taking very much of a suites approach, and PTC is likely to have pricing for its various packages of forthcoming Creo brand of products (the successor to the Pro/Engineer and CoCreate brands).
Where that non-CAD proportion can go (including new on-line services, i.e., n!Fuze) and, separately, how well its highly dedicated channel will sell other Dassault brands (also a management objective) remains to be seen. Two open, though not necessarily critical, questions with respect to the diversification, or multi-product, strategy, are: (a) To what extent, if at all, will SolidWorks be segmenting the newer offerings, as it has the Standard, Premium, and Pro CAD versions? And, (b) in light of focus on several key vertical markets, e.g., AEC, consumer products high-tech, among others, to what extent, if at all, will it offer specific vertical packaging of its products?
The available market for its non-CAD products is, in theory, substantial, in light of Solid Works' large active maintenance-paying base. I infer around a quarter-million units as of the end of 2010. Given SolidWorks' assessment that the large majority of its customers don't have a PDM system (though they haven’t said much about why this is the case), I'll surmise that in part it's because "PLM" has been such an expensive and cumbersome undertaking for much of its history.
This has been changing, however, as PTC, for instance, has been seeing some good momentum for its Microsoft SharePoint-based ProductPoint, which is specifically intended for the smaller accounts market, for their product data sharing and collaboration requirements. This evolution makes it all the more curious that Microsoft was absent from the SolidWorks conference this year, after being closely involved for many years -- and as well when we consider how emphatic Dassault was about its Microsoft relationship just two or three years ago. Some of this apparent separation, however, may be due to Microsoft's internal changes to its vertical market groups, including for the manufacturing sector in particular.
Local vs Cloud
In any event, there would seem to be, therefore, substantial potential for its existing PDM packages in the base; however, the explicitly stated strategy is that Enovia V6 will be the "PDM backbone" for Solid Works, so it seems the relative positioning of the local/on-line offerings (once available) will need to be worked out. (The locally installed PDM will need to be supported for some time, just as SolidWorks will continue to offer -- as it stated very clearly -- a locally installed version of SolidWorks, with something like n!Fuze being used to establish and develop prospects for full on-line PDM in the future.)
For some time at least, it will likely have a hybrid model, of locally installed and on-line offerings. (I suspect this will be the case for a number of traditionally packaged-software companies.) With the largest part of SolidWorks' customer base having three seats or less each, it might be more economical for them long-term to adopt an on-line solution for "PLMing." We have begun to see the first batch of on-line offerings, including the oddly named “n!Fuze”, the product data sharing offering to which the company had alluded at the 2010 conference.
Similarly, following through on the Web3D concept talked about at its European customer conference back in November 2007, Dassault/Solid Works demonstrated Post3D, a kind of immersive, interactive virtual environment for viewing products, meeting, collaborating, and the like.
The public beta for n!Fuze will start in February, with general availability expected in 2Q11, and the Post3D beta will start this quarter, with availability by mid-year. The overarching question for Dassault as a whole is the degree to which its surfeit of new technologies, combined with its new sales structure, will lead to an acceleration of growth.
SolidWorks has something over 300 resellers worldwide, with an effective sales capacity around 1,800 reps, or perhaps a bit less. SolidWorks, in order to make its growth plans for this year, will very likely need to add channel capacity. That path is more likely to follow internal expansion from existing VARs, rather than additions of new entities. By the same token, Autodesk and PTC too want and need to increase their channel capacity and capabilities for the so-called SMB [small and medium business] market, even as each -- and SolidWorks -- is pursuing the large account business.
To the extent that there are natural limitations to sales rep productivity (a generic condition acknowledged by each of the vendors), and, as well, the relatively small average transaction size for SolidWorks, then it stands to reason that growth will come from any or all of the following:
At the same time, in pursuit of larger transactions, SolidWorks has undertaken more of a segmentation of its selling structure. It has an overlay of "global account management" and "strategic account management," similar to the direct sales nomenclature at PTC, except it will be strictly via the channel. The aim is to increase the average level of business per customer.
Questions and comments are welcome.
My favorite lines from last week's PTC conference call with financial analysts:
"And last question, and I’ll get back in the queue just to keep beating the dead horse." (Sterling Auty)
"Is that where we can expect the level to kind of trend for a while? Or do you expect that level to pick up, or maybe even dip a little bit? How consistent would that level be going forward?" (Yun Kim)
"And I think just to again add some more color, clearly we have taken you guys through this domino monetization model." (Jim Heppelmann)
And here comes my favorite word...
"If you look at the group of 22 [major accounts]now, how much of them could you bucketize as sort of in the first phase versus a second phase versus a final phase of implementation?" (Blair Abernethy)
I read an article this morning that talked about Logitech. John Hempton of Bronte Capital is puzzled why they are still in business, what with the new crop of devices not needing much in the way of peripherals (Android phones, tablets, et al).
He forgot that there are something like a quarter of a billion desktop computers still sold each year, and that peripherals wear out (I recently got a new, $100 Logitech keyboard), and that aunts and uncles need to buy gifts for their computer-using relatives, and that for some people shopping is a form of raising self-esteem. Also, he seemed unaware that Logitech has two high-end lines, 3dconnexion and Harmony.
Despite the author's concern about the future for Logitech, his most interesting point (to me, anyhow) was Payables. Apparently Logitech is at 90 days, meaning they take an average of 90 days to pay their bills. This is seen as borrowing a free loan from suppliers. ("Suppliers" means the companies in China who manufacture the goods sold by electronics companies.) It also means possibly getting into trouble when suppliers get angry about being paid so late. (Would you want to wait three months for your paycheque?) Apple is nearly as bad, but they can afford to be bullies right now. And Cisco is the best, at just 20 days.
The writer found that Dell has steadily been increasing payables over the years. This is another way to make profits look better than they are, because the company each year puts off paying more debts.
Turning to CAD vendors, we see that Autodesk has increases the amount payables during the year:
But decreases them annually:
PTC and Dassault are similar.
Autodesk’s annual Autodesk University conference -- for customers, developers, resellers, other industry partners, and a gaggle of analysts -- reinforced several recurring themes about the company, namely its almost unique position in the industry in terms of the breadth of its product portfolio for addressing multiple end-market design technology requirements.
Attendance was up nicely from last year, though not back to pre-recession levels. The conversations with various relevant channel partners suggest that the business is doing well (though not back to 2008 levels in every case, as we can see from Autodesk’s own recent segment results), but the trend is right, including in Europe (Autodesk’s largest region).
Suites: Autodesk and Adobe
After a long period of strategic gestation, suites are now one of the company’s most significant business and product initiatives. The channel partners concur that Autodesk is “very serious about suites”, though there is “more to do” to prepare the channel for the major spring 2011 launches the company has spoken of. One of the things that Autodesk will have to do, as with all such suites strategies, is to do establish the “right” type, mix, and number (not too few, not too many) of configurations for the new offerings.
With so much attention now being paid to the suites initiative at Autodesk, and with Autodesk’s having looked to Adobe over the past few years as a “model” for suites, it is interesting to consider some differences between the two companies:
First, Autodesk is already doing just over a fifth of revenues from its current suites portfolio, including the three it introduced this year. When Adobe launched Creative Suite seven years it had been getting about 12%-15% of its revenues from the predecessor bundles/collections;
Second, Autodesk says it will probably not terminate the existing set of suites when the new ones launch, unlike Adobe, which quickly terminated the pre-Creative Suite products;
Third, if the proportion of maintenance in total suites revenue is comparable to the overall corporate average from maintenance (including maintenance from standalone products), we can infer that about 5%-7% of Autodesk revenues is already coming from suites maintenance, not a huge proportion but still better than Adobe’s recurring revenue proportion. The attach rate and renewal rates for suites maintenance is likely to be high, as with the standalone applications, consistent with the usual industry practice in Autodesk’s addressable markets;
Fourth, it remains to be seen (or at least Autodesk isn’t counting on its occurring) whether the Autodesk suites ramp will match the steep revenue trajectory of Creative Suite in its first few years. The addressable markets are similar in some respects but Adobe very likely has a larger unit opportunity. Autodesk’s suites revenues were $107 million last quarter, from more than a dozen available suites, while Creative Suite revenues were more than $350 million, from six configurations (the best-selling selling flavor of Creative Suite, Design Premium, seems to generate more annual revenues than all of Autodesk’s current suites together). Nevertheless, in the end, it’s likely that Autodesk’s suites could prove to be largely incremental to new license and maintenance revenues, given that Autodesk is the highest-volume supplier in technical software. With higher average revenues per seat likely, the effect will be incremental to operating margins as well.
Fifth, after the release of Creative Suite, the principal standalone Adobe apps, e.g., Photoshop, had by and large flat revenues, as opposed to a significant falling off. (Indeed, gross Photoshop eventually started to grow again, before the recession, with the introduction of the high-end Photoshop Extended.) It will be interesting to see if there is a similar effect for Autodesk, most especially as it relates to AutoCAD, its largest product (about a fifth of revenues, including maintenance and upgrades). Thus far, over the past five years, even with the rise of model-based design, standalone AutoCAD continued to account on average for half of all AutoCAD-based units (with average annual volume of more than 100,000 units for standalone AutoCAD).
Finally, for those closely tracking the company’s subscriptions metrics, e.g., deferred maintenance, seats under maintenance, it is important to note that to date the company has been counting each of the component apps in a suite as a seat under maintenance, i.e., if, say, a customer bought Revit Architecture Suite with maintenance, then each of the three constituent apps would count towards the maintenance seat base. Apparently, the future suites, including the three new ones introduced so far this year (Plant, Factory, Design) will be counted as a seat. Over time, the seat number will become less indicative (unless of course it goes flat or down), while billings (about $800 million for the trailing twelve months, up 13%) and deferred maintenance will remain highly relevant.
Customer Views: Then and Now
As it has done for the past several AUs, Autodesk arranged a customer panel for investors. The panel consisted of a small cross-section of Autodesk’s customers in terms of size and end-markets, including Intel (semiconductor facility layout), Ford (where the Autodesk products are used more for manufacturing facilities layout, etc. than actual vehicle design), Worley Parsons (an Australian engineering company), and Little (a US AEC consulting firm).
At the panel two years ago, the main themes were that:
3D is here to stay (but so is 2D). The adoption of model-based design (otherwise known as “3D”) is well established. Nevertheless, many customers will continue to use (standalone) AutoCAD (as discussed in the section above). I would reiterate a market observation, namely that the usage trend is 2D and 3D, not just 2D to 3D. Autodesk clearly continues to advance the AutoCAD-based technology (which is no longer strictly a 2D product in any event), e.g., DesignScript, a new programming language for AutoCAD. .
Pulling the pieces together. One of the requirements from Autodesk that was very much highlighted had to do with the integration and management of multiple products from Autodesk. Many customers have purchased products in effect from different Autodesk business units, and then used them together in their design infrastructure. Integration was again very much a keyword at the 2010 panel too (along with licensing models and data management); good integration is in itself a valuable and right thing to do, and it is of course a necessary condition for suites. At the 2010 management lunch with analysts, Autodesk noted that it has been investing in the “glue”, and that we would see more evidence of that next year.
Data management. There was also a clear interest from the 2008 panel in Autodesk’s having an answer for customers’ data management needs. The same was the case a year ago, and remained so at the AU 2010 panel. That view is quite understandable, though Autodesk has noted this year that its Vault products are in fact widely used; even so, it would be useful therefore for the company to be more specific about its Vault family of products. In addition, perhaps the rumored combination of Vault for AEC/NavisWorks/Buzzsaw will be a useful answer for the data management needs of AEC market, where Autodesk is the design tools leader with AutoCAD and Revit.
License flexibility. With respect to the aforementioned issue of licensing models, the largest customers, such as Ford, have access to pools of multiple products and multi-flex usage. The standard (small/medium) customers (which comprise most of the base still) would like to see some more flexibility to mix and deploy their licenses. We could see over time some professional apps available “on the cloud” and/or by some kind of “token” methodology (the latter would entail time-based revenue recognition). The company doesn’t yet say “cloud” obsessively but it is clearly moving towards more web-based services and capabilities, e.g., Project Neon, the new position of vice president of suites and web services.
Revenue and channel. With Autodesk’s having guided to 10% growth for next year (its FY12), it’s likely that it will set the channel sales quotas, typically, a few hundred basis points above the external goal. With respect to the domestic channel itself, the recent combination of Rand and Avatech indicates a movement towards a more concentrated mix of one or two large national players, a number of significant regional players around the country, and then the remaining group of smaller local partners (some of whom may end up being acquired, not unlike the consolidation wave we saw earlier in the decade).
Management noted at the analyst lunch two years ago that pursuing and investing in vertical market development, with the reseller channel, would remain one of its key initiatives -- and indeed this has been and will be the case.
The General Theory of the General Session
Among the main technology themes from the CEO/CTO's general session were leveraging increasing computing power to improve design productivity and “impact,” similar to the main themes at the analyst meeting last June. At the same general session two years ago, among the new concepts introduced were:
Management did not use the same terms this year, but it’s clear that much of what was discussed then is now becoming implicit in the Autodesk portfolio, or will be. This matters, as it reinforces the depth of Autodesk’s capabilities, not merely its breadth.
In this week's upFront.eZine, we have for you...
Happy Days are Here Again: Autodesk Reports on 11Q3
Plus letters from readers. You can read all about the business of CAD this week at www.upfrontezine.com/2010/upf-668.htm
PS: Next week's upFront.eZine will arrive late next, because I will be attending Autodesk University 2010 in Las Vegas, USA. I hope to blog some of the events live here on WorldCAD Access and on www.twitter.com/ralphg
Autodesk’s total revenues of $476.7 million, up 14%, exceeded my $465.8 million estimate, with each of the four business segments exceeding the segment forecasts. Maintenance revenues were slightly more than estimated, but billings were lighter than estimated, resulting in a sequential decline in deferred maintenance revenues.
Non-GAAP earnings of $0.32 a share were slightly below my $0.33 a share estimate, on higher sales & marketing and G&A expenses (R&D was in line); still, the 21.0% non-GAAP operating margin was a 260 basis point improvement year/year, and the company should be on its way to a more than 400 basis point improvement for all of FY11 (ending January 2011), including expected additional spending in the fourth quarter.
The 4QFY11 revenue guidance of $500-$520 million comfortably encompasses my prior $504 million forecast, though the non-GAAP earnings range is under my $0.39 a share estimate due to the expected large sequential ramp in expenses (e.g., performance-based compensation). The initial forecast of 10% growth for next year (FY12) also seems quite reasonable (and, perhaps coincidentally, matches the Adobe forecast for itself for next year, with Autodesk however having more margin leverage from a lower base).
By segment, the highlights were as follows:
Platform & Emerging Business. Revenues of $174 million, up 13%, vs. estimate of $172 million. AutoCAD & AutoCAD LT revenues were about 33% of revenues, or about $161 million, up 20%, slightly higher than expected. However, LT -- the second-largest product -- did decline by at least several million dollars, consistent with the typical 2Q/3Q sequential pattern for most of the past decade.
AEC. Revenues of $136 million, up 9%, vs. estimate of $135 million. For the year to date, AEC is up 8%, with a long way to go to return to pre-recession levels. (3QFY11 AEC was more than 15% below the third quarter of two years ago). Still, the underlying momentum in BIM (building information modeling) is real (by next year, the total number of Revit licenses shipped to date should be approaching the mid-six-figures). In the meantime, Revit revenue was up 22% year/year, implying (given the 9% segment growth) that one or more other products, such as Architecture and/or Civil, were less robust.
Manufacturing. Revenues of $117 million, up 31%, vs. estimate of $114.5 million. Not surprisingly, Manufacturing did substantially better than AEC year/year. Inventor revenues, the largest part of this business unit, were up 2% sequentially, and up 29% year/year, following the pattern of their closest peers as we see a general recovery underway in this part of technical software.
Media & Entertainment Group. Revenues of $50 million, vs. $44.2 million estimate. Animation products, e.g., Max, Maya, were down 2% year/year, to about $34 million, and Creative Finishing (the hardware-based products formerly known as Advanced Systems) were up 21% year/year to about $16 million (after having declined by more than half a year ago).
Geographic. On an as-reported basis, Asia/Pacific was the strongest region, with the 22% year/year growth, though on a constant-currency basis, both Europe, Autodesk’s largest region, and Asia/Pacific grew 19% year/year. Autodesk highlighted double-digit growth in all regions, for the first time in three years.
Subscriptions & upgrades. While upgrades are now down to only a single-digit percentage of revenues, 3QFY11 upgrades revenue of $32 million was above my forecast, up sequentially from 2Q (which has not been the typical pattern since FY00), and up 20% year/year. The company noted the success of a cross-grade promo during the quarter.
Maintenance revenues were $194.7 million, up 8% year/year, and slightly higher than modeled; on the other hand, maintenance billings were up only 11% year/year (in 3QFY10, such billings were down 11% year/year), to an implied $172 million. The company added 182,000 net new seats and deferred maintenance was $450 million, down from a high of $492 million in 1QFY11. We can reasonably expect some recovery in 4Q for seasonal reasons (the company attributed the slight sequential decline in maintenance billings from 2Q to seasonality, though such a decline did not occur in FY07 and FY08. Anyway, it was only a small decline). For the year to date, maintenance billings appear to have been up 17%, so there is a very good likelihood the company in FY11 will more than reverse the 7% billings decline of FY10.
Suites & Upgrades. It is fundamentally important that the company is as focused as they are now on growing their suites business. I liked that the company was explicit about the contribution from suites: $107 million, up 24%, accounting for 22% of total revenues (corroborating the inferred one-fifth proportion I calculated earlier this year).
Clearly there is substantial proportionate room to grow the suites business; in addition to enlarging average revenues per new license sale, as with Adobe's Creative Suite, Autodesk’s suites should also enhance the maintenance business given the high attach rates of AutoCAD and other model-based (“3D”) component apps that comprise the suites -- and maintenance carries a 95%+ gross margin, vs. a mere 85%+ for license and other revenues. The company has not completed its full launch of the suites, and it expects to do so by next Spring.
As a follow-up to the November 1st commentary on PTC’s “Creo” launch, and the issues pertaining to that, I will add some highlights from the recent analyst meeting in New York.
As preamble, at the heart of what PTC is trying to do is induce better growth in the product design applications business, while improving the profitability of the Windchill business through (continued) disproportionate license growth, from which would follow high-margin maintenance business over time. For the former, important details need to be filled in by the first release of the Creo portfolio next June (pricing and packaging especially) but there is an opportunity to expand PTC’s overall unit volume in the CAD market, or at least to leverage penetration opportunities in its installed base (the fourth largest active base in the industry).
Among the highlights from the meeting were:
“Focus on major annuity customer portfolio.” PTC brought this objective out starting at last year’s meeting, and this goal of expanding revenues per large customer remains appropriate and achievable. The so-called “domino” accounts (20 to date, with a goal of 30 by the end of FY11) and other large “strategic accounts” (of which there are 55) contribute to the base of annuity business: PTC had an interesting chart that showed 56 customers doing more than $2 million a year, 14 doing more than $5 million a year, and 9 doing more than $10 million a year (thus, 79 customers accounting for 44% of revenues, for a simple of average of almost $6 million each).
PTC also showed an unusually detailed chart identifying what it avers are more than 240 PLM displacement opportunities (“competitive targets”) within the Dassault (MatrixOne, Enovia), Siemens PLM (Teamcenter), Oracle (Agile), and SAP bases.
Expanded sales capacity, and expanded addressable market. For the former, PTC highlighted the 10% addition to its sales capacity, and for the former there is the notion of “extended PLM”, e.g., XML content management, product analytics. (What PTC does, if anything, in the emerging area of “simulation data management” remains to be seen, but a number of other vendors more actively in simulation applications have already branched out into “SDM”).
Windchill 10 – a critical new release - is due in March 2011, and ProductPoint 2.0 is due as well in 2QFY11. (At the annual PTC user conference in June, the expected release of ProductPoint 2.0 wes said to be November, 2010).
PTC ran through various growth scenarios, depending on CAGR assumptions for the major segments. For instance, even with little or limited (single digit) growth in the product development business, PTC on the whole could still show double-digit growth so long as the Windchill business maintains its rapid pace; in addition, if a reasonably large sub-brand such as Arbortext begins to do better, that would help too, of course. The five-year CAGR of Windchill-only license revenues was 15% by my calculation, through the end of FY10, among the best growth rates, if not the best, in the group, with over 80% of Windchill licenses sold to date still under maintenance.
This CAGR calculation differs somewhat from the figures shown by PTC for PLM, which includes the other smaller acquired brands, not all of which have had consistently spectacular results. On that point, one section of the analyst meeting had to do with rejuvenating Arbortext, a roughly $55 million brand.
With the new Windchill releases in the pipeline, the availability of the SharePoint-based ProductPoint, and the apparent importance being placed on PLM now by customers as an important class of technology (a priority a decade in the making), PTC should be well-positioned to perform well in the group in terms of revenue growth over the next several years, coupled with hundreds of basis points improvement from the recent mid-teens operating margin.
Autodesk will be reporting 3QFY11 on Thursday, November 18th. In keeping with improving trends elsewhere in the group (at least in the manufacturing vertical market, with Ansys’, Dassault Systèmes’, and PTC’s results), Autodesk – the most diverse vendor in terms of addressed markets - will have seen gains more or less across the board.
I’m estimating total revenues of $465.8 million, up 12% year/year, with non-GAAP earnings of $0.33 a share (the third quarter revenues last year were down 31%). The 4QFY11 (January 2011) estimate assumes revenues of slightly more than $500 million, up 10%, driven mostly by Platform and Manufacturing (AEC, however, has the “easiest” comparison). In light of Cisco’s comments, it might be useful for Autodesk to comment on its public sector business; this has typically been under a tenth of the total, but it has been growing proportionately (public sector results in the US very likely vary by region, and by federal vs. state).
By geographic results, Europe, Autodesk’s largest region, should have seen double-digit growth, as we can infer from the publicly-reported results of one of its two largest distribution partners (Mensch und Maschine); manufacturing and infrastructure did well, AEC improved, but not by as much, and the overall business recovery was apparently not confined to Germany.
This morning, Avatech Solutions, perhaps Autodesk’s largest domestic reseller (though still less than a tenth of Autodesk’s Americas revenues), reported results for its 1Q11 (ended September): while year/year comparisons are skewed by the recent merger of Avatech with Rand Worldwide (another large domestic Autodesk partner under the Imaginit logo), management noted that its results were not quite up to plan. It attributed almost all of the shortfall to Canada (which was mostly covered by the old Rand business); interestingly, it noted that in the US, government was the strongest market (sequentially), while manufacturing was the weakest.
In terms of key segment and business metric results, I’m assuming the following for Autodesk:
Platform (AutoCAD, AutoCAD LT, emerging products): $172 million, up 11% year/year, assuming that AutoCAD LT, Autodesk’s second-largest product, declines sequentially from the second quarter (which it has done the majority of the time from 2Q to 3Q over the past ten years).
Manufacturing (mostly Inventor, plus the Alias and Moldflow lines): $114.5 million, up 28% against a very weak 3QFY10, but not quite back to where it was two years ago. Given trends elsewhere in the group, it could be more likely that Autodesk would report upside here than in AEC.
AEC (Revit, Civil, Buzzsaw, plus other infrastructure and building products): $135 million, up 8%.
Media & Entertainment: $44.5 million, down 8%, though this could be conservative.
Subscriptions (maintenance): I’m estimating a mid-teens increase in maintenance billings, to about $180 million.
The two underlying trends in the subscriptions part of the business are, first, that deferred maintenance revenues have generally been increasing faster than the number of subscribers (implying higher average revenues per subscriber over time), and, second, the "book/bill" is getting back to parity, or better. Excluding estimated subscriptions revenues and upgrades revenues from total estimated revenues yields an increase estimated new license and services revenues of about 30% (leaving a lot of headroom still to get back to pre-recession levels given the magnitude of the decline in new business last year).
by Jay Vleeschhouwer
As a follow-up to my October 26th comments on the annual Adobe MAX conference, I will share some observations of the analyst meeting held during MAX.
Management opened with the set of growth drivers (and other aids to the business) for Adobe, including:
Enterprise is a broad term, but Adobe measures this as already a “$1 billion” business, a credible number when we consider just the more than $400 million in Acrobat volume licensing and the quarter-billion dollar LiveCycle server business, plus Omniture.
Adobe should be a low double-digit growth company, if not more, depending on the cumulative incremental revenues from a multiplicity of currently small or even nascent businesses, including services, such as CS Live, Flash media server, Scene7, Lightroom, to name just a few. The primary anchor products, namely Creative Suite, Photoshop, and Acrobat, are probably mid-to-high single-digit growth businesses, supplemented by stronger growth in medium-size secondary businesses, such as servers and digital video.
The identified big trends are that design makes a difference (quite so, and perhaps now even more so, and Adobe remains the most diverse and highest volume design software company), and access to customer data is vital for marketing and product development.
Following the acquisition of Omniture a year ago, I used the phrase “web product lifecycle management” (WPLM) to capture the expanded and combined set Adobe’s software tools and services encompassed the workflow from conception through “yield enhancement” for its customers.
Otherwise, the main three-letter acronym that was used – and about which we will hear more over time – is “CEM”, or customer experience management (this will be one-third of the three-legged growth stool).
Adobe also spent time highlighting the symbiosis of Flash and HTML5, plus of course its full participation in the emergence of the latter (there were MAX sessions about that too); not only will they participate in HTML5 through multiple products (as an existing leader in HTML authoring, e.g., Dreamweaver), but as Macromedia used to point out, platform and language changes will drive growth.
I liked that management – as in the CFO’s presentation – highlighted “new subscription models” and the overall importance of recurring revenues, the low proportion of which (not counting Omniture) has been a principal concern in my comments about Adobe the past couple of years.
It will take time to build the non-Omniture recurring revenues, but eventually the contribution from such offerings as CS Live could become eight-figure businesses, if not more. The transactional model from Digital Publishing Suite could also be highly scalable, even at just pennies per download of content fulfillment, e.g., of magazines, catalogs, video, etc. Subscriptions could also be used to attract price-sensitive customers.
Thus, over time deferred revenues will likely become an increasingly important metric for tracking Adobe, just as it has with respect to Autodesk.
Creative Suite Units. The company updated the unit data for Creative Suite. If we add up the Creative Suite 3 and Creative Suite 4 units as of the end of the CS4 version, plus the CS5 units sold to date, there were as of 3QFY10 about 5.625 million Creative Suite units (consistent with what I had inferred using my own crude calculations).
There is still ample room to move the CS3/4 base up to the latest version, and, by my calculation, it is still quite possible that the cumulative revenues of CS5 could meet or beat the $1.92 billion of cumulative CS3 revenues (I infer that the combined 2Q10 and 3Q10 Creative Suite revenues were about $715-$720 million, vs. $620-$625 million in 2Q07 and 3Q07 for CS3, so the slope will of course matter a great deal from here). The company mentioned that it would roll out “mid-cycle messaging,” presumably targeted initiatives to spur migration.
Acrobat Units. The company updated the unit data for Acrobat as well, noting that 44 million units have shipped since inception. At the analyst meeting 2 ½ years ago, Adobe had cited 30 million units (up 5 million over the preceding year at the time). The latest Acrobat data would suggest an increase in the average annual unit volume, helped undoubtedly by the proportionate growth of volume-licensing and as well the number of Acrobat units sold through various Creative Suite configurations.
Digital Imaging Diversification. In digital imaging, Adobe highlighted the success of Photoshop Lightroom (an adjunct to its largest standalone design tool), which did $25 million in 3Q10 alone, or the equivalent of three-fourths of its FY09 revenues. (The product was introduced barely four years ago).
In addition, it noted that combined Photoshop Extended/Photoshop Lightroom/Photoshop Elements revenues would be about $250 million this year; with Lightroom expected to be about $50 million and Elements about $150 million, that leaves about $50 million for the high-end of the full Photoshop line, or about a fifth of that business -- showing once again how in product segmentation, professional customers often gravitate to the high end of a brand, thus helping to expand the business.
by Jay Vleeschhouwer
Autodesk has reinstated the availability of AutoCAD on the Mac, as expected since at least December 2008. At that time, I wrote in a note:
[We] could envision that as part of its product strategy for 2009 and beyond, Autodesk could reinstate or introduce wider availability of some of its key products on the Mac platform.
There are of course some products today that do run on the Mac but we could see a material presence. Indeed, up until about the mid-1990s Autodesk did have a reasonable presence on the Mac along with Windows. However that commitment waned when Apple’s fortunes faded a dozen or so years ago. We could see that it might now make sense to have some design, visualization, and animation products become more overtly usable on Macs, e.g., AutoCAD LT (or for that matter, even full AutoCAD) in Design Solutions Group and other animation, rendering, and visualization tools, e.g., the forthcoming “Newport” in the Media & Entertainment Group.
The fact that there is now the Apple “MacTel” platform should make it much easier to support these products, in addition to Autodesk’s extensive development for Windows of course.
It has been more than fifteen years since Autodesk’s largest product was available on the Mac platform (once upon a time, the UNIX OS was also common, especially for such applications as Pro/Engineer and products like it).
In addition, “Autodesk also announced the AutoCAD WS mobile application, a new free app soon to be available through Apple's App Store that will extend AutoCAD to Apple's iOS.” It doesn’t sound as though there will be a for-pay or “premium” version in the near future. In any event, WS could become an important element of a mobile strategy for the AEC and other technical markets.
For the moment, the Mac platform availability pertains only to full standalone AutoCAD, not to AutoCAD LT, its second largest product, nor to the AutoCAD-based vertical apps, such as Civil.
To put some parameters around the potential for the new version, I would note the following:
It's not even Q4 and Autodesk is already cutting the price of its software through mail-in refunds. It's Q4 (Nov-Jan) that's usually the prime discount season, as Autodesk seeks to goose sales one last time before its fiscal year end.
Today, the goosing begins now. Buying a new commercial seat of AutoCAD gets you $300 off the $4,000 price tag; throw in Windows 7, and the savings leap to a stupendous $400. Offer valid until Oct 17 -- two weeks before the end of Q3.
Savings also available on a few other Autodesk software packages.
Avatecvh Solutions has taken over Rand Worldwide to create the world's largest AutoCAD dealer.
Avatech originally became a public company by doing a reverse merger of PlanetCAD. Five years ago, WorldCAD Access reported:
PlanetCAD was renamed from Spatial, after the ACIS-half of Spatial was bought by Dassault Systemes. Through a reverse buy-out, PlanetCAD took over Avatech, and then changed its name to Avatach -- along the way avoiding a hostile takeover by PCD Investments -- so that Avatech could go public.
Yesterday, Avatech did a similar thing, explaining it thusly:
Avatech Solutions acquired all issued and outstanding capital securities of Rand Worldwide in a reverse merger transaction. The acquisition was among Avatech, ASRW Acquisition Sub (a wholly-owned subsidiary of Avatech), Rand Worldwide, and RWWI Holdings (sole stockholder of Rand Worldwide).
At the effective time of the acquisition, Avatech caused ASRW to merge with Rand Worldwide, with Rand Worldwide as the surviving entity [that's the reverse part of the merger]. As a result of the acquisition, Rand Worldwide became Avatech's wholly-owned subsidiary.
bass - business
call - carl - comes
line - look - lot
manufacturing - many - mark
one - operator
things - think - time - two
Looking ahead, all of the factors driving simulation remain in full force as companies strive to compete with next generation products, and with smarter products that are increasingly energy efficient and productive.The big CAD vendors can only look on in envy.
Autodesk is reporting its Q4 and fiscal year 2010 revenues today, and they are down:
For Q1, Autodesk expects revenue in the range of $420-$440 million.
We want to do 20% earnings growth five years in a row.Through the magic of compounding, that's 149% of growth in earnings by 2015. He confides in the financial analysts the sparse ingredients of his secret sauce: "...the recipe for how we want to do that is three parts revenue growth, one part margin expansion [by growing revenues faster than expenses]."
MFGWatch Survey: Manufacturers Continue To Experience High Levels of Supply Chain Risk, Do Not Add Jobs, [or] Maintain Capacity As ExpectedSome details:
In October 2009, 62% responded that they expected to maintain the capacity of their plants in the coming quarter -- but only 34% said they had in the most recent survey.
As for employment, 13% of manufacturers stated in October that they anticipated staff reductions, but 38% actually reduced staff.You can read more of the gloomy press release here.
The investigations are part of an effort to better understand how people meet and communicate with one another — and swap information — among banks and Wall Street trading floors.
People who have seen the subpoenas say hedge-fund executives are being asked to hand over appointment books and business-contact lists, in addition to phone and email records.
#16 Autodesk -- revenues of $2.3 billion.
#40 Siemens (UGS) -- revenues were flat at $800 million.
...I'd like to ask about the commitment you have, or your expectations of the various new and incremental initiatives you've spoken of in this past year, for instance, expanding the line of preconfigured suites, design-on-demand, simulation, Autodesk products on the Mac, so on and so forth.Autodesk ceo Carl Bass replied:
You'll see suites [bundles of applications], you'll see on-demand applications [such as yesterday's Bluestreak], you'll see new applications on the Mac [I predict AutoCAD], all that will happen this year.
Autodesk's price-cutting aims to push out ZWSOFT and snatch market share from its Chinese peers, pointed out [ZWCAD's] Liu Yufeng.
Actually, Autodesk has been leading China's CAD field with a 50% market share. In recent years, CAXA Technology Co., Ltd. and ZWSOFT geared up in the domestic market through the promotion of multifunctional and low-price products. From 2007 to 2009, ZWSOFT's number of newly authorized uses has caught up with that of Autodesk.
Besides, homegrown CAD software companies formed a CAD software alliance under the leadership of ZWSOFT, enabling partners to develop applications freely on the latter's platforms, which received warm welcome from customers and imposed great pressure on Autodesk.
Insiders deem that unsatisfying performance is another reason for Autodesk's markdown. ...Its sales value even dived 42% in the emerging market. At the end of 2008, Autodesk announced a decision to change the president of its Greater China region.
Who's Gonna Be #1?
Releasing the number means we can take a stab at calculating whether Dassault will be the world's largest CAD software company, once it completes the $600-million acquisition of IBM PLM next year.
IBM PLM would contribute an estimated $530 million to Dassault. Let's assume conservatively it earns around US$1.9 billion next year without IBM PLM, or $2.4 billion with IBM PLM.
Autodesk last year earned $2.3 billion, and maybe will do the same next year (after dipping below $2 billion this year). So the acquisition could well put Dassault over the top.