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Low-Cost CAD Options Fuel Growth
4/4/2012

Solid Edge Design1, offered by Siemens PLM Software to the Local Motors community, is an example of new subscription-based pricing models that are driving down the cost of CAD software.   (Source: Siemens)
Solid Edge Design1, offered by Siemens PLM Software to the Local Motors community, is an example of new subscription-based pricing models that are driving down the cost of CAD software.
(Source: Siemens)

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Mydesign
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Platinum
Pricing at an affordable level
Mydesign   4/4/2012 7:01:27 AM
Beth, I know some of the professionals are using educational version of CAD for professional services in an unhealthy manner. Every year they are distributing some licenses to educational institutions for learning purposes, with one year key. So the lab peoples are reselling it outside to professionals and many pirated copies are also in market. Inorder to avoid such illegal practices, the best way is to fix the pricing tag to an affordable level.

Beth Stackpole
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Re: Pricing at an affordable level
Beth Stackpole   4/4/2012 7:26:28 AM
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I think you're right--CAD software licenses have traditionally been so cost-prohibitive for many that they resort to using educational versions or dabbling in arrangements that aren't on the up and up when it comes to legal licensing structures.

I think we're going to see big changes as CAD and PLM vendors get with modern times and recognize that $5K to $10K individual license fees just don't cut it in a world of pay-as-you-go, utility-based software pricing models. While lower cost licenses have always been a customer requirement the vendors tried to meet (I know I'll open the door for argument there), there really are options today allowing them to make good on their intentions. I think we all just have to stay tuned.

Rob Spiegel
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Blogger
Re: Pricing at an affordable level
Rob Spiegel   4/4/2012 9:13:13 AM
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Beth, what are the factors that are driving down the fees for CAD? Is it growing competition? Is it volume? Is it slimmed-down packages? 

naperlou
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Re: Pricing at an affordable level
naperlou   4/4/2012 9:50:33 AM
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Beth, I agree that we are seeing a sea change in the CAD world.  I think that it is driven by the whole pay as you go software pricing model that we are seeing in the cloud and in other areas.  This will also greatly exapnd the market for these products as well.  I think the vendors will be better off in the long run.

Beth Stackpole
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Re: Pricing at an affordable level
Beth Stackpole   4/4/2012 11:17:29 AM
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@Rob and @Naperlou: I think you're both right. I think there's been a lot more competition in the CAD market with lower cost offerings like Alibre, SpaceClaim, Kubotek, and others, which is driving down the overall cost of software in this category. But more than that, I think it's the growing popularity and feasibility of cloud-based offerings and pay-as-you-go or utility-based pricing models. CAD and design tool vendors are taking a page from mainstream business software providers and experimenting with new delivery models and licensing schemes. I think @Naperlou is right that everyone will be better off as these new models mature and gain traction.

Rob Spiegel
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Re: Pricing at an affordable level
Rob Spiegel   4/4/2012 11:42:04 AM
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Beth, when I was thinking about what could be driving down costs for CAD, I pondered whether cloud computing was a factor. For the vendor, however, I'm not sure cloud computing is a cost saver. From the vendor's point if view, it seems like cloud computing would be a more expensive way to serve the customer. When you license the product outright, it lives on the customer's computer. Seems like that would be less expensive than running it your server and letting the customer access it.

Beth Stackpole
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Re: Pricing at an affordable level
Beth Stackpole   4/4/2012 3:34:49 PM
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That very well be, Rob, but it's high time for the vendors to rethink their licensing fee structures to reflect the times and how customers want and expect to pay for software. Increasing, the cloud is enabling pay-as-you go pricing and that's what customers are demanding. Keep in mind that software vendors also don't just make money on the actual license fee, but on annual subscription and maintenance fees. Those fees aren't going away, in many cases. And by offering subscription pricing, coupled with newer 3D visualization and design collaboration tools, vendors are actually expanding their user base for CAD and design tools--another way to amortize seemingly lost revenues for a different pricing model.

Rob Spiegel
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Re: Pricing at an affordable level
Rob Spiegel   4/4/2012 3:55:20 PM
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That makes sense, Beth. The cost of providing cloud access -- though it may be more expensive than simply selling software -- would be minor in comparison to developing the software itself. 

Kubotek
User Rank
Iron
Kubotek
Kubotek   4/4/2012 4:56:21 PM
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Hi Beth:

Please remember that Kubotek is spelled K-U-B-O-T-E-K.

Here is a link to the website:  http://www.kubotekusa.com/

BTW we just announced a breakthrough and affordable Direct CAD & Simulation product: KeyCreator Analysis.  Here is a link to the KeyCreator Analysis page http://www.kubotekusa.com/products/keycreator_sub/fea.html

Thank you,

Scott Sweeney

 

JPW
User Rank
Silver
Perspective Issue
JPW   4/5/2012 10:03:54 AM
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Hi Beth, to me the pricing is a perspective issue. Most "business" software that businesses use on a daily basis; MS Office, Accounting, Graphics apps, fall in the <$2K range. When business people see the price of a MCAD product they are shocked and then they see that it has a maintenance contract; something not found in other common business apps and they are shocked again. They perceive that business software should be in the <$2K range or even <$1K, unless it is an enterprise wide software like an ERP package.

Thus, the MCAD is a really difficult sell (I know from experience) for engineering/CAD managers due to the MCAD pricing model; especially because MCAD is not an enterprise wide system.

On FEA it gets worse, and there I am personally turning to OpenSource software.

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