It looks as if emerging technologies in the areas of mobile design tools and cloud computing are poised to fuel some long-term growth in the CAD market -- at least according to the latest market report put out by Jon Peddie Research.
According to the firm's "Worldwide CAD Market Report 2012," new platforms and distribution models are critical growth drivers pushing the CAD market to $7 billion in revenues in 2011, up from $6.4 billion in 2010 and $5 billion in 2009. The total number of CAD users has also increased, jumping from 18.5 million in 2010 to 19 million in 2011. Another interesting tidbit regarding growth in CAD seats: Demand is evening out, with CAD revenues now split among 37 percent derived from the Americas, 38 percent from EMEA, 21 percent from Asia, and 4 percent from the rest of the world.
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While worldwide markets slowed down during the recession of 2008/2009, Peddie's research shows that the engines are starting up again, with new markets like Latin America, Africa, Southeast Asia, and the Middle East particular bright spots. "The CAD market is recovering and there is pent-up demand," Kathleen Maher, an analyst at the firm, told us. "CAD companies are redefining themselves in fascinating ways, and it is contributing to growth as customers clearly approve of the changes."
Specifically, Maher and the Jon Peddie crew believe that there is a paradigm shift underway, with new opportunities created around CAD thanks to the rise of technologies like cloud computing, mobile apps, and tablets. The new technologies have critical appeal to the younger generation of engineering professionals, who are increasingly mobile and accustomed to visual 3D data.
"This younger, more skilled, and more mobile workforce is demanding tools that work the way they do," Maher says. "One of the biggest, most profound shifts we're seeing is that the data is traveling with workers to the field, the shop floor, the construction site, etc. That's long been an ambition -- now it's a reality."
In keeping with the new technology advances, Maher believes CAD will continue to evolve with lightweight, more easy-to-use, less expensive tools. She cites PTC's efforts around the Creo line of apps tailored for specific tasks and specific roles as a harbinger of how CAD tools will continue to evolve. "People are looking at their CAD systems for more efficiencies," she says. "They're looking for better ways to create data and more ways to use the data. Most important, CAD customers are visual people and they want to interact with visual data, including 3D, simulations, and point cloud data."
Nice story, Beth. From the report, it looks like the existing base of CAD users are buying new mobile and cloud tools, which makes sense. The report also seems to indicate most of the design work is still being done in North America and Europe, even while Asia has become the largest manufacturing region. That supports the notion that products are still getting designed in North America and Europe even while they're getting manufactured in Asia.
I think there's been a lot of advances on the CAD front, both around new technologies like CAD and mobile, as well as in the basic CAD tools themselves in terms of providing new capabilities and making them easier to operate and perform more functions. That's what I see fueling this resurgence in CAD.
I think the global recession also slowed down spending on the CAD front, like every front, but companies are opening up their purses again, especially for technologies that can help them innovate and gain a competitive edge. CAD, CAE, and PLM tools can certainly do that. As for the various regions--from my conversations with Jon Peddie's team, the idea is that revenue from CAD is now being more equally distributed across regions--not just heavily dominant in the U.S. and European markets. I think that shows that Asian countries and some of the others mentioned are gaining ground in manufacturing, but the U.S. is holding its own.
Given the economic recession and especially the regulatory burden in the U.S., I'm wondering if this increase in the CAD market is due to manufacturers that are seeking to redesign and optimize their parts for efficiency rather than a surge in new products. I think the quote "People are looking at their CAD systems for more efficiencies" refers to the CAD tools themselves, but I wonder if that thought doesn't extend to the entire design process. Creating less expensive, more efficient, less wasteful components and processes is where Innovation can be found in a shrinking economy. Differentiation and Integration -- the technological circle of life.
In talking to design shops, I see further use of and comfort with CAD tools, especially simulation tools. Simulation helps shorten design cycles and makes physical prototyping, which is generally deferred, more effective. The tighter integration between these tools and traditional CAD tools seems to be a driver. In addition, PLM tools might be making an impact. These are not as widely used, it seems, and this adds room for growth.
I agree with you William. I don't think I was referring to the fact that all development and additional CAD spending is slated towards new products, but rather like you mention, towards a concerted effort to retune product lines for efficiencies and to take cost out of the equation. As you well note, all goals that are quite achieveable with CAD tools.
I think William's question is a good one, and echoes a theme I kept hearing over the last couple of years in machine vision: refurbish, tweak, redesign, optimize, streamline, etc. In other words, do almost anything to an existing system or product except build or buy a new one, whatever it is.
Naperlou's point about simulation and optimization plays into this whole notion of refining and evolving products to make them more efficient and cost effective as opposed to starting from scratch to develop new ones. I suppose efficiency is what it is all about in this tight economic climate.
I agree, Beth. I makes a lot of sense to re-use designs that are already proven. Not only economic sense, but time-to-market sense. Component suppliers and distributors have been helping out for years with reference designs so brand owners can plug and play basic chunks of the product that are well-proven.
Rob, I agree, this does relate to the design reuse issue. It's sort of like the recycling "reduce, reuse, recycle" mantra. It also makes me think of all the attempts in chip design to reuse various circuit designs as IP, some of which worked.
This is of a piece with today's (Jan. 3) story from Beth on mobile Android app uptake. In 2011, we saw the stirrings of new licensing and delivery models in the CAD space. The interesting dynamic here, as opposed to the general IT space, is that the vendors seem to be a little bit more proactive in terms of protecting their revenue base by covering all the possibilities -- regular, per seat licenses, cloud delivery, mobile, lower-end monthly use fees. That's a smart strategy.
Mobile apps and the cloud. Two huge new delivery models and you're right, Alex, early stirrings in the CAD world. It will be exciting to see how far the vendors push these models this year and how it will impact their revenue streams. CAD and PLM vendors are used to very pricey programs and lots of consulting services work. Mobile changes that, although the cloud, not so much.
One thing we also need to consider from a mobile computing perspective is consumption versus authoring. We don't get much real estate on most hand-held devices to do any propductive geometry creation work; however, we could do things that relate to metadata/config managment and the like. Even with tablets, we would still need additional computing resources in the device to make authoring realistic, although tablets are much better suited to consumption than are hand-helds. Hopefully, CAD technology providers will also embrace the multi-touch displays used on mobile devices such that we can have a reliable alternative to a mouse interface.
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