SolidWorks World Boston Report

By Martyn Day, editor, CADserver, February 17, 2004

On my way from London to Boston to attend SolidWorks World, as the new American Airlines Boeing 777 hurled us into the blue above Ireland, an announcement from the cabin crew asked if there was a doctor on board. The sight of people rushing to the back of the plane carrying the on-board defibrillator meant someone was seriously ill. A few minutes later the captain announced that we would have to divert and land at Shannon, as it was a life or death medical emergency. Within seconds the plane was in a steep dive, with kerosene fuel streaming out of both wing tips, emptying the fuel tanks to lower the aircraft weight. It was astonishing to go from a cruise altitude of 37,000 feet back down to Earth within 15 minutes.

Some hours later when we continued our outbound journey, I started to talk to the chap next to me about the passenger who’d had the heart attack and about the rapid reaction on-board that probably saved his life. My fellow traveler happened to be a professor of environmental studies at Harvard. The conversation came around to computer software, specifically ArcGIS software developed by a company called ESRI - the biggest player in the GIS (Geographic Information Systems) market. It seems there are regular gatherings of ESRI developers and academics, and if a good research idea is born, the CEO of ESRI makes sure some resources are devoted toward developing that idea.

The professor was involved in fascinating research to examine the correlation of city pollution and human illness. ESRI had assisted in developing a real-time system that was up and running in which some 350 people in the Boston area had surgically implanted defibrillators (devices that, in the event of a prolonged irregular heartbeat, produce a 600 volt surge to “reset” the heart to prevent cardiac arrest). Working with the researchers, each of these patients has been fitted with a GPS system, which they wear 24 hours a day. Their data is telemetrically fed back data to Harvard labs. At the same time, pollution data is taken from the city’s measuring stations. Occurrences of pollution and. defibrillation events can be overlaid on a digital map in real time, to show any correlation between types of pollution and heart attacks. City hotspots for pollution can be quickly identified and precautionary measures taken by the environmental health agency. Little did I know it but this kind of remote sensing technology would be the topic of the keynote at this year’s SolidWorks World.

Back on terra firma, my first interview was with SolidWorks CEO, John McEleney.

It’s always enlightening to talk to John McEleney about the state of the CAD business, and the channel and routes to market. Under McEleney, the SolidWorks channel has become one of the most envied in the industry, overtaking Autodesk as the channel to emulate. In the past, most CAD vendors have dabbled with direct, indirect and mixed channel models, with consecutive reductions of margin to dealers, as well as over-distributing product, producing too much competition and inevitable price wars.

SolidWorks prides itself on never having reduced the margin to dealers and has remained focused on selling indirectly through its dealer partners. But as the market matures and competition increases, it’s clear that SolidWorks is keen to broaden its sales capabilities; to do that the company has developed various programs to assist their dealers’ businesses.

"All solid modeling systems are still too hard to use, they require training and hand holding - this is a major industry issue,” McEleney said. “That's why SolidWorks' focus is selling on value and trying to maintain the margin integrity of the reseller channel. The SolidWorks channel is extremely healthy and that's the dimension that we are betting on. Many of our competitors are betting that we won't be able to sell into their accounts, but as we get more people into production with SolidWorks software, creating more data, that accelerates the network effect. SolidWorks will eventually be the dominant format. I am playing the network effect based on the success of our customers."

On the topic of success and dealers, I asked about the health of the channel. From my experience of Autodesk’s dealers, there’s not a lot of margin left in the product for them to invest and grow.

“Dealer health is a serious issue,” responded McEleney. “We just had a harsh talk with all our dealers and 2004 is about HR, not human resources, harsh realities. We have invested back into the channel; we hired one of our dealers and his sole metric is to go around to other dealers and help them improve their business. So we have a new team, our own internal consultants who will go out there and work with dealers, for free, to work to improve business operations, cash flow, receivables, tracking, training, marketing and above all profitability. The healthier they get the more they will invest, because they will see the opportunity. There's been a great response. Do I want them to add resources? Sure, but the doctrine is not more, more, more. We need to be healthier and refocus on the fundamentals - we all need realignment at sometimes.”

Speaking of the health of the company, SolidWorks has reached a milestone of 300,000 seats, number 300,000 that of Texas Instruments Sensors and Controls. According to SolidWorks, it sold its last 100,000 licenses in 16 months, 33 percent faster than it took to sell the previous 100,000. McEleney told me that the target the company was aiming at is one million seats of SolidWorks, but he wouldn’t give a time frame. “It’s important for us to plan systems and infrastructure that can handle that many customers,” he said.

I tried to extrapolate the growth and seats to date to estimate when that goal might be attained, but the figures seemed to me a bit unrealistic. Later at dinner, Jon Hirschtick (founder of SolidWorks) pointed out that the figure of one million customers needn’t be just SolidWorks alone. Indeed, it’s highly likely that SolidWorks would move away from being a one product company. Achieving the goal would also depend on what happens in the market. Will PTC, for example, pull out of its nose-dive? What will happen to UGS PLM Solutions? And what developments has SolidWorks got waiting in the wings? I think we will have to wait a bit before we can come to any definite conclusions.

One of the new faces at the company is Jeff Ray, the new COO. Ray was persuaded to come to work for SolidWorks after a six-month courtship. Very much a “channel guy,” Ray turned the fortunes of his previous company around by focusing on building back its dealer network. In all my conversations with Ray, issues of channel were paramount: improving capacity, business processes and choosing the key dealers eager to move to the next phase.

A key benefit for SolidWorks dealers is the constancy of product margin and the recurring revenues from subscription. Ray has been on a mission within the company to engage the existing channel and rate the dealers for future sales efforts. This job will leave McEleney and his team free to work on future strategy and new products.

The keynote speaker this year was Kevin Ashton, former executive director of the MIT Auto-ID Center, which that developed the technical and conceptual underpinnings of the Electronic Product Code (EPC) system, and one of the founding figures behind something called RFID. RFID stands for Radio Frequency Identification and from his presentation, it was blindingly obvious that this will be a technological revolution that may have a far reaching impact in many aspects of our lives.

The concept of RFID tags involves embedding tiny, cheap microprocessors into any object. Animal-tracking tags are one example. All a computer needs is an antennae transmitter/receiver and it can “sense” an object in space from the emission of the tags.
Imagine an aircraft, let’s say the Boeing 777 that carried me to Boston. If every component within the assembly had a RFID tag, a computer in a hangar could “look” at the plane and pick up all of these components. The tags would tell the program how long each component had been on the plane, where and when it was manufactured, if it had ever been repaired and possibly be linked to a PDM system to bring up models of the assemblies being serviced. Items that failed could be immediately traced back to the original batch - a fantastic aid in the search for manufacturing defects.

The challenge that Ashton threw down to the SolidWorks World attendees was to start thinking about where in their designs they would embed these RFID tags, remembering there was a requirement to build in aerials so it can be “sensed.” RFID embedding will become an increasingly important design requirement for all products, creating new challenges for design and manufacturing.

Even though SolidWorks 2004 is still relatively new, SolidWorks execs took the opportunity to demonstrate a pre-alpha version of SolidWorks 2005. The first thing I noticed was the change to the user interface, which has been updated to be more Windows XP-like and with the icons that use 256 colors. A new context-sensitive task manager window also provides easy access to content. These are small but welcome changes.

SolidWorks 2005 improves mold design to make it easier to create a parting surface. Click on image to enlarge.

It appears as if SolidWorks’s 2D capabilities have received most of the attention, with some functions added to catch up with the competition, and others to push on ahead. The most useful 2D ability in 2005 is the automatic isometric view capability; it will also be possible to place details of details and sections of details. Annotations and notes can be grouped and moved automatically with their associated components; these can be adjusted with precision using the arrow. Text within hatched entities automatically get hatched around making them more visible. Also new: automatic cut lists, spell checking, various typefaces and colored text. There was a big cheer for what looks to be a comprehensive, yet flexible automatic dimension capability, and SolidWorks 2005 also supports the inclusion of tolerances.

Those who cut their teeth on AutoCAD will appreciate that SolidWorks 2005 repeats the last command on hitting the enter key and drawing a selection window conforms to AutoCAD, allowing a “crossing” selection. Other changes to the interface make the measure function available at all times.

New to SolidWorks 2005 are items called sub-sketches, which are described as being “2D blocks.” These could be created in the program or imported from an AutoCAD DWG 2D into a sketch and then extruded to 3D. Another well-received feature was one that allowed numerous 2D sketches to be imported into the work space, mated and constrained, and then moved in real time, allowing kinematics exploration of a design in the 2D phase.

eDrawings gets revised and can now include animations created in SolidWorks Animator. There’s support for Unigraphics, Autodesk Mechanical Desktop and PTC’s Pro/ENGINEER. The file size of eDrawings is also being addressed with promises of a 30 to 60% reduction. SolidWorks is now concentrating a lot of effort on eDrawings, possibly looking to fuel its “network effect” strategy by fighting for the free engineering publishing format, which Adobe and Autodesk are currently having a tussle over.

In the modeling department, the deformation tools now allow “twisting” and assemblies can display different components in different rendered states, shaded or wireframe at the same time. SolidWorks expands its capabilities in the mold market with the inclusion of automated side-core creation.

Office and Office Professional versions will also be enhanced, although no specific features were mentioned. The COSMOSWorks component has a few new cool features, including drop test analysis and non-linear material analysis.

The beta program is due to start in May, with July being the estimated release date. There was a lot of emphasis on working on bug fixes and trying to lower the number of bugs shipped with the product - an area in which SolidWorks knows it must improve.

The exhibition space at SolidWorks World was full, although the schedule left little time to peruse the goods. There seems to be a great diversity of applications for SolidWorks now, with many focusing on knowledge-based engineering. DriveWorks was there, demonstrating its latest version of spreadsheet-driven design. A possible competitor called RuleStream was also on show, demonstrating its engineering calculation-based assemblies. A new version of SolidCAM was on display which included 5-axis machining. Gold Partner Cyco demonstrated its AutoManager Meridian EDM integration.

The battle between Autodesk and SolidWorks has been an ongoing affair in the mid-range MCAD market. Talking to both sides, you get the feeling that each party only sees one real competitor and that others - such as Solid Edge, Pro/ENGINEER, think3 - are not much of a threat.

During the conference, Autodesk took out full-page ads in The New York Times, the Boston Globe and USA Today, stating, "What they won't tell you at SolidWorks World: The world's #1 selling 3D design software is Autodesk Inventor Series." The main topic of conversation was how much money Autodesk had spent on this kind of blunderbuss marketing. Jon Hirschtick told me, “I’ve never seen SolidWorks printed so large in a newspaper before!” He wondered aloud what he would have to do to get PTC to do the same.

All of this underscores the numbers game that both Autodesk and SolidWorks are playing: counting paying customer along with educational copies, including the cross-grading and upgrading of other products as well as bundled packages. Some of the numbers don’t add up and if sales are slack, anyone can give away copies of software to educational establishments to boost figures. In this war there’s little credibility in numbers shipped and besides it’s a rotten basis for purchasing software.

It also appears that both companies are now actively trying to stop one another from obtaining legal copies of each other’s latest software. Autodesk has also kicked out SRAC, the creator of COSMOS, as a third-party developer for Inventor, as it was purchased by Dassault, possibly in retaliation for Dassault’s alleged agreements with certain developers not to develop for Autodesk. As the competition becomes fiercer and more personal I see bigger helpings of paranoia being dished up.

Such intense competition is great news for customers. There seems little respite in the development and delivery of new functions, as the scramble for market domination continues.

SolidWorks is customer-centric and events like this show that the company has managed to keep the feeling of being led by its own community of users. Yet the million-user target still seems audacious and I have to wonder how the company could maintain the community feeling if it were to ever achieve such numbers.

About the Author

Martyn Day is group editor of MCAD Magazine and AEC Magazine. For more information, visit the CADserver website.

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