Interview with Coade employee over Intergraph's purchase

An employee of Coade prompted me to check with Intergraph about the CAD giant's largest ever acquisition. Coade has two lines of software that got Intergraph interested: (a) P&ID and plant software that runs on AutoCAD, and (b) standalone analysis software for piping systems, tanks and vessels, and so on.

I asked the employee what questions he would ask his new boss; following my interview with Intergraph, I sent him these answers:


Q: What's the first thing your customers will see from the merger?
A: Ceasar to SmartPlant Integration.

Q: What products complement? Which -- if any -- are redundant?
A: All; none, it seems.

Q: How did the merger happen? (I mean, what's the background? Did we have an existing product/development relationship?)
A: Intergraph does one acquisition a year; needed integrated analysis software. Already had a link to Ceasar but now wants to integrate the software.

Q: What is Intergraph’s record with acquisitions?
A: Seem to work out; wants to make them work.

5. At what level will the products be integrated/rebranded/merged/eliminated? Which products? Timetable?
A: First Ceaser with Smart3D, followed by Ceaser with PDS.

Q: What's the future for COADE's pre-merger staff (from President down to receptionist)?
A: All remaining, except for CFO.

Q: What's the biggest challenge going to be?
A: Wondering what Autodesk's reaction will be.

Q: A SWOT (Strengths/Weaknesses/Opportunities/Threats) question(s) would be extremely interesting.

A: Strength: Coade gets "protection" from a large corporation; Intergraph gets needed software (analysis and AutoCAD add-ons)
Weaknesses: loss of independence by Coade, and loss of job titles (no more president!)
Opportunities: larger revenues and marketshare for Intergraph.
Threats: loss of interest by Intergraph in some Coade products; aggressive pricing by Autodesk

Q: What's the main message to existing Intergraph and COADE customers?
A: Business as usual, only better.


You can read the full article on Intergraph's acquitision in today's upFront.eZine:
     - How Intergraph is Integrating Coade
     - How Will Autodesk React?

www.upfrontezine.com/welcome.htm

Comments

[twitter.com/kcflatlander]

I'd also like to see what other plant software vendors are thinking...i.e. Intergraph's competitors who link to CAESAR II

[Mook]

KC, Bentley already owns Autopipe for pipe stress analysis which is a formidable competitor to Caesar II, and Bentley also owns Staad, which is the dominant structural analysis software for process & power market in N. America. Problem is, Bentley's plant design CAD solutions are a mess. Autoplant still doesn't run on microstation (Bentley's flagship product) and Cadworx has been mopping the floor with takeaways from AutoPlant's small-to-medium size customer base while Intergraph and Aveva have been picking off a number of Bentley's larger plant customers. It's fair to say that Bentley's plant design CAD solutions that compete with Intergraph are in a downward spiral.

Intergraph's largest competitor in the process & power market is Aveva, and Aveva doesn't offer squat for integration with analysis software. I guess they don't see it as a priority. Intergraph will make them pay a price for that mindset with better Caesar integration. SmartPlant 3D also offers an application programming interface (API). Their API with SP3D V9.1 is pretty darn comprehensive for both structural and piping. I'm fairly sure that Aveva does not offer any API with their PDMS plant design suite.

One potential problem for Intergraph is that although Caesar is the dominant pipe stress software for now, Caesar is old technology. Crappy user interface and no application programming interface for integration. Presumably, Intergraph will "integrate" with Caesar using some sort of text file interface since Caesar does not have an API.

Intergraph can add value to Coade's Autocad-based Cadworx line at little "cost" by adding their vast specs and catalogue data. Other than that, I'd be skeptical about Intergraph doing any serious investment in further developing Cadworx since a) it's Autocad-based, and b) because Intergraph's current plant design products are superior.. although at a higher price point. We'll have to wait and see for sure how that one plays out.

If you google, you'll find that Coade already received a $42 million investment from an investment group called Insight Partners back in 2007. Not sure if this sale to Intergraph is coming from Insight Partners or whether Coade principals still controlled a majority of the company. At $42 mil, Coade cashed out at their peak.

ECAD (founded by the late Gene Eckhert) is Coade's sole distributor for the Cadworx product line in the US. I'll bet ECAD is sweating bullets at the possibility that Intergraph will take that business direct.