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Dassault Systemes Sees First Quarter Revenue Rise 15%; Discusses Changes in VAR Channel

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Randall S. Newton, May 14, 2007

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Dassault Systemes (NASDAQ: DASTY; Euronext Paris: #13065, DSY.PA) reported a strong first fiscal quarter of 2007, with total revenue of €290.9 million ($396.8 million). The total revenue growth in constant currencies was 21%. The company credits its new attention to the PLM mid-market and the re-alignment of its sales relationship with IBM for the growth. In the last few days the company as begun to discuss changes to its VAR channel -- changes we think will cause unrest in some quarters but are necessary for Dassault’s next phase of growth.

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Revenue Summary

Software revenue for the first fiscal quarter (January-March 2007) was €245.8 million ($335.2 million), up 15%. Service revenue was €45.1 million ($61.5 million), up 16%. PLM revenue was €235 million ($320.5 million.), up 16% from €200.9 ($274 million) in 2006. ENOVIA contributed €57.4 million ($78.3 million) to the PLM total revenue. “Mainstream 3D” was €55.9 million ($76.2 million), up 9% from €51.2 million ($ 69.9 million) year-over.

Licenses of 3D CAD products increased 15% to 19,625. Of that total, SolidWorks sold 11,813 copies and CATIA 7,812.

Changes to VAR Channel

In discussions with reporters at the recent CATIA Operators Exchange (COE) Annual Conference, Dassault CEO Bernard Charles said the current SolidWorks reseller channel will in the future be the Dassault Systemes Volume Channel. It is part of a larger move to assert the Dassault corporate identity into some of the company’s divisions that until now have been more or less left to create their own identity in the marketplace.

What may evolve is that as the new Dassault/IBM relationship works itself out, (with IBM focusing on 1200 key accounts), Dassault will give the SolidWorks reseller channel the right to sell more existing products -- and new products such as 3DLive and the ICEM line. This could be win-win and a big coup for SolidWorks resellers.

The full article is available for a fee at CADCAMNet.

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