Like most small manufacturers pumping out widgets or machinery, ShopBot Tools Inc.’s mechanical design needs were not all that sophisticated. Still, the 20-person company, which makes computer numerical control routers used by everyone from craftspeople to automotive industry suppliers, desperately needed to retool its product line and in the process, wanted to implement 3D CAD software to help streamline development and foster reuse of parts.
The problem — ShopBot’s budget wasn’t flush enough to cover the license fees for high-end 3D CAD packages like PTC’s ProEngineer or Dassault Systèmes’ CATIA. Even the mid-range products like SolidWorks or Autodesk Inc.’s AutoCAD were out of reach, from both a cost perspective and a training issue. “I’m well versed in CAD and 3D programming, but I’m the only one here,” says Gordon Bergfors, head of product development at ShopBot Tools, in Durham, NC. “A lot of other people would have to rely on these tools, which would mean that I’d have to spend all of my time teaching people or sending people to classes because many of those products have a steep learning curve. I didn’t have the time or manpower to do that.”
A lot of small and mid-size companies are in the same boat. Faced with similar competitive pressures as larger companies — for instance, globalization and the need to collaborate with an extended chain of design partners — small players are finally starting to seriously consider 3D CAD and other design technologies, including Product Lifecycle Management (PLM) and simulation software, as a way to inject greater efficiencies and more innovation into their product development cycles. While their interest is keen, many like ShopBot Tools, have limited abilities to absorb the expense and time commitment of these complex systems. As a result, many smaller companies have been shuffled to the sidelines, forced to make due with outdated and insufficient design tools and manual processes no longer sufficient in an era of global competition.
Leading CAD and PLM vendors are getting the message and starting to respond. On the PLM front, hosted offerings from ASP upstarts like Arena Solutions Inc. and industry stalwarts like PTC and Agile Software Inc. present SMBs with a manageable price of admission: A low-cost monthly service fee and weeks-long deployments, not the months or even years customary PLM programs have required. Others, like UGS, are offering scaled-down, pre-configured versions of their high-end PLM systems, which tout built-in templates and industry best practices as a way to help companies sidestep the pain of business process reengineering traditionally associated with PLM.
CAD software is also being made over to be more palatable for smaller companies and a wider audience of users beyond engineering. PTC, for one, has repackaged its ProEngineer into a series of price points and feature sets that make it scalable and accessible to all classes of users, starting at an entry-level price of $5,000. New companies like SpaceClaim Inc. and Alibre Inc. are specifically targeting the under 10-person shops with 3D CAD capabilities they claim are priced right (Alibre sells for less than $1,000 a seat) and just enough for small companies that don’t need the breadth and complexity of high-end products. This ease-of-use and low-cost of entry also expands the audience for 3D CAD software, these companies claim, by letting non-engineers in areas like procurement and marketing take an active part in the product design process.
“Vendors, by necessity, spend more time and make more investment into putting in features that fewer and fewer people need, making CAD products more complex,” says Greg Milliken, CEO of Alibre, in Richardson, TX. “Most people aren’t designing a whole car or doing incredibly complex surface models with intricate functionality. The combination of ease-of-use and affordability opens a window for us.”
Window of Opportunity
The window of opportunity for vendors targeting CAD and PLM to the SMB space is larger, at this point, than the market for high-end offerings, according to AMR Research Inc. While overall annual growth for CAD/PLM offerings hovers around 9 percent, AMR projects 12 percent growth in this category among SMBs, which it defines as companies between $30 million to $999 million. There’s a simple reason behind the math. The larger companies with complex product design needs in industries like automotive and aerospace have already made huge investments in CAD and PLM software. “But the adoption of 3D in mid-size and smaller companies still hasn’t taken off,” says Mike Burkett, an AMR vice president, in Boston. “Part of the reason has been related to pricing and part is around organizational issues since it requires packaged services and training.”
Many vendors are embracing channel partners to help deliver those training and consulting services necessary for 3D CAD and PLM to penetrate the SMB space. UGS, for one, has poured a significant amount of effort into building out its global channel partner program as part of its efforts around the UGS Velocity Series, a portfolio of products aimed at the SMB market. The Velocity Series, a set of modular components pre-configured with industry best practices, encompasses Teamcenter Express for PLM and Product Data Management (PDM) functionality; SolidEdge for 3D CAD capabilities; NX CAM Express for computer-aided manufacturing functions and NX Femap for computer-aided engineering (CAE).
“There isn’t just a distribution reason for building out new partners — it’s a requirement to take off in the SMB marketplace,” Burkett says. “(SMB’s) don’t want to buy direct, they want to interact with a guy down the street who has industry-specific expertise and who understands their business processes.”
In fact, SMBs aren’t merely looking for scaled-down functionality or price, but rather the services and product packaging that can help them make use of sophisticated functionality with a lower total cost of ownership, according to Bruce Boes, UGS’ vice president of Velocity Series marketing, in Plano, TX. That’s part of the reason why UGS choose the pre-configured approach that is the signature of the Velocity Series rather than offering a hosted or on-demand PLM suite or a stripped down version of its CAD tools. Teamcenter Express, for example, includes workflow, based on UGS’ experience over the years, for handling engineering change orders, while the CAD/CAM components of the Velocity Series have built-in workflows for designing sheet metal or surfaces.
“SMBs don’t have time or money to put into documenting and customizing software to achieve their goals,” Boes says. “They’re looking for someone to come in with a best-in-class solution and give them business process assistance, not just technology.”
The Hosted Option
PTC also sees value in delivering industry-specific best practices around PLM, yet it believes its Windchill On Demand offering, currently delivered to 100 customers through a hosting relationship with IBM, can provide another edge to companies looking to speed time-to-deployment, says Jay Muelhoefer, PTC’s vice president and general manager of On Demand.
Rollease, a $25 million manufacturer of hardware for roller shades, happens to agree. For years, the company struggled with the lack of central control over engineering data. Sometimes parts were renamed improperly or the wrong electronic files were sent to vendors, resulting in cost overruns or production delays. WindChill On Demand eliminates those concerns without having to overload Rollease’s one-man IT operation or without requiring any server upgrades to accommodate complex software. “Without the on-demand option, we wouldn’t have been able to have a complete PLM package,” says Joe Cannaverde, project manager at Rollease, in Stamford, CT.
Same goes for Energy Innovations, a Pasadena, CA, startup making affordable renewable energy systems. With SolidWorks as its CAD tool, Energy Innovations needed a PLM solution with a low-cost of entry, which could accommodate its need to collaborate with overseas suppliers. “There was a lot of trouble with the ball being dropped, with purchasing people not knowing where to find the latest information on designs and engineers not having a lot of visibility into the real cost of their designs,” says Derek Jackson, project engineer.
Last fall, Energy Innovations settled on Arena PLM, which was designed from the ground up to be a hosted solution. With the system in place, which took only days, Energy Innovations was able to cut down on the confusion, improve its configuration management tasks and manage changes and approvals electronically instead of through manual, paper-based processes. As a result, the company’s product is on track to make its planned summer release. “Time to market is a big thing for us and PLM has definitely helped us accelerate and try to meet our schedule,” Jackson says.
The hosted model may work for PLM, but the way Alibre sees it, that delivery mechanism isn’t an option for CAD software because people don’t want to lose control over their proprietary intellectual properly, Milliken says. In addition, UGS and PTC’s approach on the CAD side still misses the mark for really small companies — those between one and 19 employees, which Alibre defines as the base of the pyramid, encompassing millions of potential customers. Alibre targets that group by providing core 3D CAD functionality — parts modeling, assembly modeling and drawing capabilities, for instance — without getting into things like complex shapes or extra large assemblies, Milliken says. To keep its software competitive and build on the ease-of-use story, Alibre plans a summer update that will add new direct modeling capabilities, along with a planned bundle of its software with Acrobat 8.0 for improved file sharing, he adds.
Alibre’s core functionality, not to mention its sub-$1,000 price point, was what finally made CAD work for ShopBot Tools. In the two years since the software has been in use, ShopBot has redesigned all of its parts from the ground up and been able to greatly facilitate parts reuse, Bergfors says. “It’s been a huge time saver,” he says. “And the cost for six seats of Alibre is a little more than it would have cost for one seat of (Autodesk) Inventor.”