Why Dassault figures Solidworks will become a billion-dollar brand

Double-digit growth

 

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

 

 

 

Comments

[Joe Doe]

So there's way too much to unpack here but l take just put it this way....this is never going to happen there's just too much competition to say the least and specifically speaking Solidworks has been slow to reach to the market and what they currently offer is a far cry from others in the same space. OnShape or F360 aren't current SW killers but then again neither was SW when it first hit in '95. In fact if you want to take that trajectory then it was easily 10 years before SW even became the industry standard and had enough to offer Pro/e users a viable alternative.

X -Drive or Solidworks running in the cloud on frame aren't even close to those other guys out there. And let's not talk about coming late to the game when it comes to TopOp.... The SW of today is much like the PTC of the '90s. Also pound for pound I'd even put Solidedge ahead of SW in some areas of parametric vs direct.

I'd give Pixologic with Zbrush or Blender a shot at that before Solidworks...(I jest....) But I many respects you don't see SW users having the same level of ferverent and unrelenting love for it like these two software. One cost $800 with free upgrades the is free (put that in your forced annual maintenance pipe SW). Hell I've seen companies standardize on Sketch Up.

Keep in mind I'm a SW fan but I'm also a realist and pragmatic. Unless SW branches out, diversify into more than just the engineering market (ie VFX, VR/AR, real TopOp for metal AM and also come out with a real completive pricing structure) then a billion dollars they never will see....

[Lou James]

I don't see it either. The user base has not quite figured it out yet, but SW CAD is more or less running in place from a development standpoint over the last 8 years or so. Dassault is clearly investing their R&D elsewhere - Enovia PLM and CGM based apps like Industrial Designer, Mechanical Conceptual, and now XDesign. XDesign will not take off either since most of the SW user base is not looking for a "bridge to 3DExperience" as Bassi hopes. Dassault is just dying to get out of licensing Parasolid from Siemens.

Sooner or later, these failed development projects will come back to bite. As with other software, cloud-based CAD will bring tons of advantages. Not going to list them out, since Bassi openly admits this. But there will continue to be tension within SW between legacy and new platform advocates, not to mention keeping the VAR base happy. And a house divided will not be able to keep up with players like Onshape, Siemens, and maybe other newcomers, who are marching to clearer targets.

[Ralph Grabowski]

It was fascinating to observe the disconnect of the Solidworks CEO spending most of his keynote speech at Solidworks World 2018 showing off a suite of non-Solidworks programs in front of the 5,000 Solidworks users.

[Fred Fredrick]

Cloud isn't the answer, if you've ever worked on something sufficiently complex even server drive latency can be problematic let alone a network connection. The draw is for the bean counters, the engineers and designers suffer under a cloud based CAD. Cloud is fine for hobbyists.