Clarity on PLM

A quick peek into some more research on … standardizing CAD solutions, starting with a strategy to determine if you should standardize in the first place. Tech-Clarity Issue in Focus: CAD Standardization Strategies discusses considerations for operating in a multi-CAD environment versus standardizing on a single solution. My recent post Consolidating CAD – Strategic Advantages at Reduced Cost may have put the cart before the horse because it discussed the benefits of homogenizing CAD solutions across the enterprise before posing a simple question: “Should you consolidate?” Or another, critically important question: “Can you consolidate?” The paper is intended to help companies develop a “CAD Standardization Strategy” based on a thorough understanding of the business drivers, constraints, and tradeoffs impacting their decision. The previous paper can then provide more detail on the benefits of standardizing (including a financial model).

The Research Findings

The first part of the paper focuses on business drivers impacting the CAD strategy. The paper offers a list of business drivers that impact CAD decisions. These factors include impacts on:

• Direct cost
• Internal Efficiency
• Supply Chain Efficiency
• Customer Requirements
• Corporate Flexibility

 A large portion of the report is composed of a table of business drivers that can serve as a starting point for a company to evaluate the drivers to their own business. The next part of the report is about making tradeoffs. Few companies will have come up with a clear answer for standardization or for maintaining a multi-CAD environment. In fact, some companies may choose multi-CAD, as you will see from this discussion thread on Oleg’s Beyond PLM post CAD Strategies: Diversified or Unified?. The tradeoffs include:

• Savings from consolidation versus the cost of change
• Internal efficiency versus supply chain efficiency
• Internal and supply chain efficiency versus customer requirements 

There is another table that details some of these tradeoffs, although there may be additional tradeoffs for any particularly company scenario. Please see the paper for more detail and to read the recommendations.

Implications for Manufacturers

I hope this report servers as a starting point to an informed decision on CAD deployment. Every business is different in some way, so the tables may not be comprehensive for your particular company or supply chain. The most important thing to keep in mind, of course, is  to develop the CAD strategy based on the business strategy.

So that was a quick peek into some recent research on developing a CAD standardization strategy, I hope you found it interesting. Does the research reflect your experiences? Do you see it differently? Let us know what it looks like from your perspective. Please feel free to review more free research and white papers about PLM and other enterprise software for manufacturers from Tech-Clarity.

A quick peek into some research on … the benefits and savings available from consolidating onto a common CAD package in your business. Tech-Clarity Insight: Consolidating CAD – Benefits of a Unified CAD Strategy explores the strategic and operational benefits of leveraging a single package. As the research concludes, “… not all businesses have the opportunity to unify their CAD solutions … but there are multiple advantages for those that can.”

The Research Findings

The paper addresses benefits including enabling strategic initiatives and simple cost reduction. Strategically, a single tool can help support business strategies like a “design anywhere – build anywhere” approach. The report also explain how utilizing a single tool can help promote design reuse and simplify collaboration. Of course the biggest benefit may come from the ability to enable a more strategic, integrated PLM environment. These solutions typically involve a suite of pre-integrated solutions that are tailor-made for each other. 

The report also details the very tangible reductions in total cost of ownership for the CAD solution. By evaluating a multitude of cost drivers, the report suggests a framework and a sample set of calculations to quantify the cost savings available from consolidation. Some of the cost drivers are obvious, while others may be more subtle. For example:

• Removal of redundant CAD licenses (ok, no surprise yet)
• Reduce cost of upgrading software tools (maybe less obvious?)
• Eliminate need to develop training for redundant solution (maybe you wouldn’t have thought of this?)

See the report for a more complete listing and an educated (and conservative) example of the cost savings available. While the strategic benefits are compelling, many companies today may consider this strategy simply to achieve leaner IT overhead for their engineering software.

Implications for Manufacturers

What does this mean for manufacturers? I discussed that question with Paul Hoch, Team Leader of Product Engineering Services for lighting solutions manufacturer Zumtobel AG. He echoed a number of the benefits in the report, including cost savings and explaining that they “don’t get the full benefit from <their> 3D CAD models” without PLM. But the most strategic benefit Paul discussed was corporate flexibility, which is critical as companies try to survive in difficult, global markets.

“Our common tool is the basic infrastructure that allows us to make quick decisions on product and plant locations, it provides management with the flexibility and agility they need.“

I am not sure I can add anything more to the power of that statement, other than to suggest again that many companies may pursue consolidation for much more tactical reasons.

So that was a quick peek into some recent research on consolidating CAD, I hope you found it interesting. Does the research reflect your experiences? Do you see it differently? Let us know what it looks like from your perspective.

Please feel free to review more free research and white papers about PLM and other enterprise software for manufacturers from Tech-Clarity.

I had the chance to talk with … PTC and their customers at last week’s PTCuser user conference. PTC has been busy, making a number of significant announcements. I will clearly not do justice to such a big event in one short blog, but I hope to hit the highlights for you and share my thoughts on the implications.

Note: Just to be clear, this is the last PTCuser because the conference is changing and will be renamed PlanetPTC.

What I Learned

PTC is still serious about mechanical CAD. They believe that there is still innovation happening in that space, and that it will be an interesting market in the future. Good news for mechanical engineers and those that are fans of PTC CAD solutions including Pro/Engineer and CoCreate. They announced Project Lightening which is a multi-year strategy to reinvent mechanical CAD, but promised deliverables in the near term. Not much information here yet, but from conversations with PTC product managers this is a big focus area. Expect some significant focus on making MCAD much easier to use.

PTC is pushing the PLM boundaries. PTC furthered InSight product analytics by announcing product cost analytics and expanded Arbortext into service documentation and instructions. By going into areas like product analytics (particularly in areas like cost), PTC continues to push the envelope. PTC has a broad vision for PLM, and has already stretched the scope of PLM to include product documentation and engineering calculations in the past, and they don’t appear to be done yet.

PTC is making good on their Social Product Development initiative. The new SocialLink product is a great example of this. They added a new product, but also demonstrated how these new social computing capabilities will work across the entire PTC product portfolio. That is the right way to do it (in my opinion). The capabilities are generalized and part of the infrastructure (in large part thanks to Microsoft), but the application of the capabilities is happening in the solutions themselves. This allows product managers from each product line to decide how their users can benefit. Expect more here over time.

PTC has refocused on a Small to Midsize Business (SMB) PDM system – ProductPoint is no longer trying to be both a simpler PDM offering for the SMB and PTC’s answer to Social Product Development. With the introduction of SocialLink and other social computing capabilities, ProductPoint is now free to be a SharePoint-based PDM system. Good news for the SMB who doesn’t need (or can’t attain) a full PLM system.

PTC enters PPM market – PTC is launching a product portfolio management solution based on Microsoft technology. The early indications are that PTC’s solution is more focused on project roll ups and programs than decision support in product portfolios and R&D investment. Stay tuned for more on this in the future as I learn more.

PlanetPTC replaces PTCuser – PTC users have asked PTC to take a broader role and responsibility in the user event. PlanetPTC also includes a community site and virtual events like webcasts, showing that PTC really believes in the power of social media.

So that’s what I hear from PTC, I am sure I missed something. I hope you found it useful. What do you think? What else should I have asked them? What else would you like them to do?

A quick peek into some research on … how manufacturers and vendors plan to react to the market for CAD, CAE, PLM, and other engineering software in 2010. Last week I posted the first part of my research for COFES, Engineering Market Research Results from COFES 2010. Last week I reviewed how 2009 predictions played out and what the survey participants expect from 2010. Today, I plan to focus on what they are going to do about it.

The Research Findings – What Comes Next?

Let’s jump right in. 2009 was a bad experience for most companies in our market, but the outlook for 2010 looks a lot better. Stunning analysis on my part, isn’t it? More details are in the prior post, but I realize I stating the obvious based on what most of you are experiencing. So what did the survey say will happen in the engineering software market between now and this time next year (2011)? It is not all positive.

• Continued Consolidation – Over half of the respondents predict “continued consolidation within the industry.” This is not all bad, by the way. The market for suites of applications always relies on innovation around the edge and consolidation into an integrated offering. This has been true for other markets as well, for example the way ERP became such a large suite of solutions. I expect we will also see the kind of consolidation expected in most mature markets, where companies acquire older solutions to scale up their customer base and maintenance revenue. 
• Fewer New Entrants – Almost half (44%) of the participants believe there will fewer new companies coming into our market. I have heard that it is still difficult to get venture funding, so this doesn’t surprise me. I hope this changes, because I think market innovation is much easier in a “garage” than in a big corporate R&D center.
• Entry by “Others” – A third that responded to the survey see further entry into this market by “non-traditional” vendors like SAP, Oracle, and possibly others through acquisition. Interestingly, less than half that many (15%) believe those same companies will enter by developing their own solutions. See Who Will Disrupt PLM Giants? for more of my thoughts on that.

The Research Findings – What Are We Doing About It?

So that explains what we think will happen, but what are market participants planning do it about it? In a word, grow. In two words, grow profitably.

• Over 1/2 of companies polled listed “grow in existing markets” and “grow in new markets“ in their three responses. What clearer message could we get? Companies are upbeat about 2010.
• But wait, 40% say they also have “remain lean” in their strategies for 2010. I believe there are two drivers behind this. The first is caution. Yes, we are recovering. But no, I haven’t talked to a lot of people that are 100% confident that it will continue or that we won’t have a “double dip.” But there is another reason, in my opinion. That is profitability. Companies that remain lean in growth markets make nice profits. It is not sustainable over the long haul because people get overworked, but as a business strategy it works.

Implications for Manufacturers
So what does this all mean if you are a manufacturer? First, you are facing many of the same conditions. Your businesses are also planning to grow, but you will likely stay lean. One of the way to stay lean is to get the most out of the resources you have, which I believe will help fuel the engineering software market recovery. To remain lean, many manufacturers will upgrade tools and automate processes to improve efficiency. 2010 will be a busy year. But would anybody trade a busy 2010 for a repeat of 2009? I doubt it. Let’s get things rolling again, and then as growth is sustained let’s start to invest and get people back to work.

So that was a quick peek into some recent research on how companies plan to react to the recovering market in 2010, I hope you found it interesting. Does the research reflect your experiences? Do you see it differently? Let us know what it looks like from your perspective. Please feel free to review more free research and white papers about PLM and other enterprise software for manufacturers from Tech-Clarity.

A quick peek into some research on … the market for CAD, CAE, PLM, and other engineering software for 2010. 2009 was a very difficult year, no surprise. But what does 2010 look like? When will the market recover to pre-recession levels? Those are the questions we asked in a research study conducted between Tech-Clarity (me), Cyon Research, and Design Insight. Here is a synopsis of the research I presented at COFES in April.

Note: Please understand that I am not a financial analyst, and that this research is based on survey data that indicates the sentiment and beliefs of those buying, selling, and otherwise participating in the engineering software market. In other words, there is no financial investment advice here.

The Research Findings – History

The results from the 2009 engineering software market study were difficult to look at. Unfortunately, they were a pretty good reflection of the situation. Most people felt that it would be at least 2-3 years before the market recovered. More telling, however, was that the execs at the companies that buy the software said the recovery were more pessimistic than the execs at the companies the sell the software. That was a disturbing finding. We also discussed the implications for smaller vendors (specialty vendors and startups) and the projection was not pretty. So what really happened? And how do companies in the engineering software market feel today?

The Research Findings – View in 2010

The market is clearly recovering. While last year I had to start with a quote from Dilbert to lighten everybody up, this year I quotes Fed Reserve Chairman Ben Bernanke saying the economy started growing again in the 3rd quarter of 2009, and the economy was finally starting to create jobs. There was no surprise or sigh of relief in the room, everybody already knew this. Since that time, Dassault Systemes, PTC, and Siemens PLM have reported good news (quarterly results and/or big deals) compared to last year (among others).  My FABWA (financial analysis by walking around) at the conference told me that smaller companies are feeling the recovery as well. People are buying engineering software again (please insert a choir of angels here).

What did the over 400 survey participants have to say? Here are the highlights:

• The predictions from last year for 2010 were relatively accurate, 59% of of respondents said their business suffered “severe” or “moderate” negative impact in 2009 (compared to a prediction of 55%) – Mythbuster approved!
• The projections for 2010 are better, but don’t indicate we are out of the woods yet. 23% still expect moderate negative impact in 2010. But only 8% predict severe negative impact, and 20% expect a positive impact. We’ll take that over 2009 for sure!
• The channels including VARs (value added resellers) and consultants were hurt the most. Over 1/2 experienced severe negative impact. This was worse than predicted, even though the expectations were not very positive.
• Suite vendors including those with multiple engineering software solutions, enterprise software vendors (like SAP and Oracle), and infrastructure providers (like Microsoft) faired the best. Only 20% experienced severe negative impact.
• The channels are the least optimistic for a positive impact in 2010 (only 9%), while the suite vendors are the most optimistic (36%)
• Our predictions for smaller vendors were mixed, with larger vendors expecting more failures in their smaller competitors. While it was a tough year, the majority of the companies respondents had direct experience with fell into the “struggle but survive” category. The smaller vendors predicted this, and good for them. Of course there have been consolidations and failures, and as one participant commented “100% of the startups I was following failed to start“

So the obvious question is what comes next? Well, for  me it as another cup of coffee and a decision that this post is getting too long. So look for a part 2 with the future view shortly.

Implications for Manufacturers

So what does this all mean to the people using engineering software to make a living? The good news is that your business is likely recovering as well. The bad news, is that you are probably running very lean. But from this research (and related research by Cyon Research presented by Brad Holtz) you are also likely to be buying engineering software to help. I am sure that is good news to many that have had strategic programs put on hold due to economic uncertainty. Things are starting to move forward again.

And hopefully your critical vendors either survived the downturn or were acquired by a company that will support you well. The vendor shakeout is probably not entirely over, but if your vendor made it through 2009 they have proven they have some resilience and should have a much easier time going forward.

So that was a quick peek into some recent research on the engineering software market, I hope you found it interesting. Does the research reflect your experiences? Do you see it differently? Let us know what it looks like from your perspective. Please feel free to review more free research and white papers about PLM and other enterprise software for manufacturers from Tech-Clarity.

I had the chance to talk with … the team at Synergis Software about their engineering document management solution, Adept. Synergis focuses on providing a simple solution to manage engineering documents – including CAD files – than a full PLM solution. For companies without big plans for PLM, particularly smaller companies, Synergis offers an alternative option. Perhaps they are on to something, 2009 was a tough year in our industry and Synergis reports having a very good year. 

What do they Do? 

First and foremost Adept is not a PLM system. Some would probably call it Product Data Management (PDM), but certainly not PLM. The solution is intended to help companies get control of their engineering information. The solution primarily manages documents. On the other hand, Synergis can help solve some PLM problems. One of the core needs for PLM is to get data under control. Engineers have documents of all types, including office productivity applications like spreadsheets. This is what Adept is designed to manage.

But most engineers also manage CAD files in Adept. In fact, Synergis has invested in integration with SolidWorks and Autodesk Inventor that rivals many PDM systems. They have developed an integrated plug-in that sits in SolidWorks that allows users to perform searches and do check-in/check-out from a right-hand pane in SolidWorks. They have integrated with Inventor as well, and have announced a new plug-in application for that environment.  

What do they Offer 

A quick peek into some research on … the impact of the economic downturn and the fledgeling recovery on the market for CAD, CAE, PLM, and other software for engineers and product developers. In 2009, I conducted a survey jointly  with Cyon Research, and Design Insight. We presented the results at the annual “Congress for the Future of Engineering Software, COFES, which generated some lively discussion. We are repeating the survey this year, and looking forward to understanding the views of the market this year as compared to last.

The Research Findings – 2010 (please take the survey)

Before getting into the results for 2009, I ask you please contribute by taking 5-10 minutes of your time to answer about a dozen short questions on this year’s survey:   COFES 2010 Survey.  Please participate, and I will make sure we share our findings and insights back with you.

The Research Findings – 2009

As I stated last year, the research was not intended to be an economic forecast, but instead an indication of the sentiment of the industry. The study was designed to guage respondents’ opinions about the market, and should be take as such.

I shared some results last year in Research Rap: Impact of Economy on Smaller PLM Vendors. I found it interesting that most smaller vendors felt that they would struggle but survive. As the calendar has turned, we will close the loop on this prediction and see how it turned out. I would dare say that the shakeout was not as bad as some expected it to be. But the big question was when did the people in the industry expect to see a return of the engineering software market to its prior strength. 

The question was: “What is your best estimate of when the engineering software market will recover (to approximately 2005-2007 levels)?” Here was the view from last year:

What we noticed, though, was that the executives at the software vendors were more optimistic about the timing of the recovery than the executives at their customers:

Who was right? Has their opinion changed? Please take the survey so we have a good comparison of this year’s market sentiment to last: COFES 2010 Survey. I promise to “mythbust” my own predictions as well as the markets.

So that was a quick peek into some recent research on the engineering software market recovery, I hope you found it interesting. Does the research reflect your experiences? Do you see it differently? Let us know what it looks like from your perspective. Take the survey, and share your thoughts with all of us and the participants at COFES.

Please feel free to review more free research and white papers about PLM and other enterprise software for manufacturers from Tech-Clarity.

What I learned this week … was sparked by a conversation with a friend from the industry over a drink last night. We were discussing the cloud, PLM, multitouch, and IT in general. To be fair, there were other topics of conversation, but he is one of the people that I really respect for his insight into technology. We were discussing my thoughts on PLM in the Cloud, when it finally struck me. Are we going to ruin the design process for experienced engineers by hampering their real-time interaction with the system? Are we heading in the right direction for tomorrow’s engineers?

What Am I Talking About?

Work with me for a minute, this conversation was after only one beer so I think it makes a lot of sense. We were talking about what kids today will expect in the user interface of the future. We were talking about how our kids talk on their headsets and use their game controllers so naturally, doing things we don’t even understand. They are pushing combinations and series of buttons in rapid succession to make things happen in their game – in their virtual world. Then it struck me – why am I so excited about multi-touch and user interfaces that help replicate the real world? Isn’t the whole point of using a computer to go beyond what you can do manually? To super-enable your abilities?

OK, back to CAD and PLM.  Multitouch, 3D manipulation, and motion interfaces are cool. We all saw Iron Man, and we have seen demonstrations of multi-touch CAD. Now I am asking “so what?” OK, I love multitouch (and I want an iPad). But I have a tablet PC with a touch-sensitive screen, and how often do I pull my hands off of the keyboard to touch the screen (hint, no fingerprints on it)? I don’t even like to take my fingers off of the keyboard to grab the mouse, so I have learned a lot of shortcut keys and typeahead tricks. Why? I don’t want to replicate getting a blank piece of paper out of my desk, writing a report on it, making copies, manually distribute it to colleagues for review, and then file it in a file cabinet. The real world is much less efficient than my virtual computer world, so why replicate it in my user interface? OK, we all know the answer. It reduces the learning curve, and it makes interaction more intuitive. But for the experienced user I am going to call that assumption into question (translate as you will).

For the experience user – particularly for the people that grew up using Xbox controllers to manipulate their virtual world in ways they can’t dream of interacting in the real world – we need to do better. Don’t make them touch the screen, take advantage of the fact that they have ten fingers that can all act independently. Give them a motion-sensitive Wii/Xbox-type of controller that they can do ten things at a time with. Track their eye motion. Read their brain waves. The point is to most effectively translate and extend the ideas in the designer’s mind to the system. For the first-time user, multi-touch makes sense. For marketing presentations, the same. For a  day-to-day, interactive interface between an engineer’s fast-moving brain and their high-powered computing equipment it has to be fast and efficient for the experienced user – and that doesn’t necessarily mean natural or intuitive. Particularly when the definition of “intuitive” changes as more of the Xbox generation is sitting in front of the CAD system.

What Does This Have to do with The Cloud?

OK, if you are still with me I appreciate it. I know this has gotten long, and I haven’t even touched on the cloud yet. I will make this brief. I pointed out two types of concerns in my post on PLM and the cloud. One set of concerns was corporate, the other was performance for the user. Let’s relate the concepts above to the real-time performance of an engineer. A lot of the buzz around CAD in the cloud has discussed the challenge of rendering graphics rapidly and getting them back to the engineer. That is a big concern, and I have seen in posts like Josh Ming’s post on SolidSmack about SolidWorks on the cloud that progress is being made.

But what about input performance?  If the goal is to make the human-machine interface as efficient as possible and not distract the engineer from innovating, there can’t be a lag between action and reaction. Part of that lag time is computing/rendering responses. The other is capturing what they are doing. This is where I get concerned about lag times in the cloud. Maybe I need to look back at my son’s Xbox experience and just get over it? But I still have a lingering concern about maintaining real-time user-machine interfaces through the Cloud. I know a lot can be done client-side on the PC or workstation, but I still have to wonder if we are heading the right direction for the real design jocks. Maybe it is too much to ask engineers to learn that level of interaction with their systems, but won’t the Xbox-controller-wielding generation expect that, and won’t it be intuitive to them? If X-A-B-Y-LR-LR-X means pass the football in their game, why couldn’t they learn that means create a thumbnail of my 3D model and check it into the PLM system? Then, I am confident that powerful computing infrastructure (in the cloud or elsewhere) can execute on that.

Implications for Manufacturers

I realize that I may not have given you much that is actionable today, so I will leave you with a thought or two to ponder. All of the new UI ideas are cool, and there are huge benefits for companies to move applications to the cloud. But try before you buy. In your environment. With your infrastructure. And your people. And keep the capabilities of bright, highly talented, gaming savvy, trained, dedicated engineers in mind as you evaluate future user interfaces. Multitouch will have great uses in engineering software, and cloud computing has great promise. But let’s be careful what we ask for so we don’t hamper our future innovators. And for goodness sake, let’s make sure we don’t make them put their hands on the screen unless it is really helping them do something more natural (like sketching) that they can’t do better with an Xbox controller.

So those are my (somewhat random) thoughts, I hope you found them interesting. Do you agree? I didn’t, if you did let us know about it.

I had the chance to talk with … Sustainable Minds CEO Terry Swack late last year about their entry into the software world. The company introduced their on demand, green product design software to help manufacturers develop greener products. Sustainable Minds is furthering their ecodesign services by offering companies the ability to measure – and reduce – the environmental impact of their products early in the product lifecycle.

What do they Do?

The key to what Sustainable Minds offers is the ability to help companies make design trade-offs based on objective impact critera. Their product, Lifecycle Analyzer (LCA), allows companies to take a holistic look at the way their products affect our planet, including the energy used to produce it, logistics impact, energy to operate in use, packaging, and consummables. Their methodology, “Okala,” includes “impact factors” that allow designers to compare different options in systematic, repeatable, measurable way. I was impressed that the methodology is based on sound science and data from sources such as the EPA, giving the impact factors credibility. Okala is a single figure scoring system that includes 10 impact categories, over 550 impact factors, and CO2 equivalent values. Although there is no way to truly estimate how “green” a product is, the methodology and software provide a logical way to compare options in a meaningful way.

What do they Offer?

The LCA solution is made to work in conjunction with other solutions like CAD and PLM. For example, it can import a bill of material (BOM) from a CAD system to help engineers understand how “green” their products will perform. By wrapping LCA into the new product development (NPD) process, companies have the opportunity to make environmentally-friendly decision when they still have the flexibility to make decisions that won’t adversely impact product performance or cost, changing “green” from an afterthought to a design parameter that can be tracked.

Sustinable Minds also offers a Learning Center and a community to help companies adopt ecodesign strategies. They also leverage a database with impact factors and offer a process as well as tool. While most companies struggle today with just a process, this broad offering provides a way for companies to get started and makes analyzing design impacts realistically achievable.

Who do they Work With?

LCA is an early product, and Sustainable Minds has been running successful beta pilots. The goal is to work with manufacturers, consultants, and education to promote ecodesign. The company plans to roll out 12 industry modules, so they are thinking very big.

So that’s what I hear from Sustainable Minds, I hope you found it useful. What do you think? What else should I have asked them?

A quick peek into some research on … the priorities, plans, views, and economic outlooks of companies that use engineering software. The survey-based study, published last night by Cyon Research, paints a very interesting picture of how manufacturers plan to invest and leverage engineering software (and related hardware) in the near future. I have had the opportunity to review and comment on the report during its development, and one thing that continuously struck me is not just how useful the published insights on the future of engineering software are, but the richness and depth of the information that the Cyon team couldn’t fit into the report.

The Research

The research spanned companies that use CAD, PLM, CAE, and other technical software, and included responses from almost 600 people. The report breaks down into a number of major categories, including:

• Purchasing plans, policies, and priorities
• Hardware refresh rate
• Financial outlook
• How companies differentiate themselves
• Engineering software selection criteria
• Views and plans on new releases from major software vendors (Dassault, Autodesk, Siemens)

In addition there are some interesting portions on who controls the BOM (and age-old question) and some insight into the relationship between CAE application usage and other engineering software used. The report contains a tremendous amount of information, with a number of very interesting charts. Plan to spend some time reading it if you have the opportunity, there is a lot to dig into.

Key Takeaways

There is far too much for me to give justice to in this space, but I will try to point out some of the more interesting things I learned from the report:

• Some companies have cut spending on engineering software – 29% of respondents indicated that they cut spending in the first half of 2009, with further cuts expected but at a slowing pace (for example 19% in first half of 2010). Note that these are likely in addition to cuts made in earlier budgets, so the total number that have reduced budgets from 2008 levels is probably higher.

• Many companies are playing “wait and see” -  42% are “considering or about to cut” spending if their business conditions worsen. This is what Cyon calls the “overhang” of the cuts, which includes the potential for further reductions dependent on the general economic conditions.

• Companies are planning to pick up spending (when they can) – in the words of the report, “The bright spot here is the longer-term outlook, 2010 and 2011, for increased spending in the purchases of design, analysis, and data management software.”

• Companies still have an appetite for improved solutions – the report gives details on the planned adoption of new technologies (V6 from Dassault Systemes, Inventor Fusion from Autodesk, and Sychronous Technology from Siemens PLM). I can’t share specifics, but across the board there are plans to implement the new solutions, although more Autodesk users say it is “too early to tell” given the maturity of the solution at this point.

Implications for Manufacturers

There are some valuable insights for manufacturers in this report to compare their strategies with their peers and competitors. The report provides some interesting detail on specific industries and their behavior, particularly on how each industry reported they plan to compete (product quality was the most commonly targeted differentiator overall, but this varied widely by industry).

I think this report is potentially even more valuable for software vendors.  The research gives them insight into what is important to their customers, and how they are planning to spend their money. For software companies, this can provide them with invaluable input into where they should focus their efforts to best serve their customers, particularly at a time when many are considering reductions in spending.

So that was a quick peek into some recent research on the viewpoint from engineering software users, I hope you found it interesting. Does the research reflect reality? Do you see it differently? Let us know what it looks like from your perspective.