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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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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? 

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. 

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.

Kubotek
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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
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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.

Beth Stackpole
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Re: Perspective Issue
Beth Stackpole   4/5/2012 11:55:10 AM
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@JPW: You raise some interesting comparisons and I think you are right about the high price tag not corresponding well to everyone's picture of an enterprise application. Also, I don't think IT has any kind of role in choosing CAD tools so the expenditure comes right out of engineering's budget--not any kind of enterprise IT fund.

The open source avenue is interesting. I've heard some good things about the open source CFD tools. Have you come across any other popular design tools that make sense in an open source forum?

JPW
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Silver
Re: Perspective Issue
JPW   4/5/2012 12:52:23 PM
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Hi Beth,

I've downloaded and played around with a CAD OpenSource program called Blender. It is very popular I'm told with Makerspace (hackerspace) people. I recenlty joined a Makerspace in Southeastern Massachusetts.

***NOTE: this is a polygonal modeler; not a B-Rep, though I'm told if requested it will most likely get added.

The models I've seen done in Blender are quite impressive.

The interface is more complex than most MCAD packages; however, there are lots of tutorials on YouTube.

Beth Stackpole
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Re: Perspective Issue
Beth Stackpole   4/6/2012 7:51:33 AM
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Thanks for the intel @JPW. Blender sounds interesting and something I'm sure some of our community members would love to check out. What's your experience with the whole open source model--do you regularly contribute to the community and do you find that other contributions in terms of code/model sharing etc. are helpful?

tekochip
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Platinum
Compilers next?
tekochip   4/5/2012 11:06:28 AM
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It's good to see a pay as you go model. Very often I'm working on a project and only need a tool for a couple of months, then a year goes by before I need to use the tool again. The full price tag is just too much for that kind of use and then add the maintenance fee, because the next time I need the tool it will be out of date. If the CAD vendors are going that way do you think the compiler vendors will do the same? I hate paying $1000+ every year just so my tool doesn't get out of date, because sometimes a couple of years go by before I use that particular micro again. With one compiler I stopped renewing the maintenance fee because the annual subscription is 1/3 the cost of a new license. It's a great tool, but I'll take the gamble that I won't need the update for three years.


ChasChas
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Features exceeded general needs
ChasChas   4/5/2012 11:14:20 AM
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People by nature like the latest and greatest. CAD companies followed this idea for years. Then we found out most of us only need a smaller part of the features, plus the features are getting real expensive. Slimmer version were made available -  then competion between the best slimmer versions, etc.

I am a PE consultant engineer. Most of the time, I use Inventor 11. This "old" software competes well against almost anything out there for what I need.

The only real problem is upward compatability, if I need to share with newer versions. This is mostly a money making gimmick. It would be easy to strip new feature off a file and let older programs run them. It seems that downward compatability is as easy as pie - there's money in it.

Sorry, enough rant!! 

Jon Titus
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CAD-Tool Vendors Need a New "Model"
Jon Titus   4/5/2012 6:07:51 PM
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Companies that make microcontrollers (MCUs) often have a set of programming tools they make available for free. They also have a couple of tiers of software tools at higher places and with more capabilities. So, people can learn to use the tools and create and debug some code that runs on the semiconductor vendor's MCUs. Of course the MCU vendor hopes to make up for free or low-cost tools by selling you more chips. Yet many third parties also sell programming tools and seem to make money doing so. They enhance their products with added bells and whistles that programmers need and want. And they, too, have different prices for different levels of code optimization, add-ons, etc.

Perhaps the CAD-software people need a business model that gives away free software that lets a user create only x number of surfaces, CAD files of only y megabytes, and so on. Then if you want to upgrade, you buy the next license step which adds more features and allows for bigger designs.  They could also put a time limit on the steps, so if I want the top package for only 6 months, I pay only for what I need and for as long as I need it.

A few years ago I tried Google's SketchUp and Alibre. Both seemed counterintuitive and difficult to use.  I hope CAD software has improved.

 

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