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Why Dassault Matters: 3D Design

I've been trying to figure out the collaborative design space, so I went to the Dassault conference in Berlin last week.

Dassault makes three products in the design spaces: Delmia, an industrial engineering product, Enovia, a PDM product, and its flagship product, Catia, which does 3-D design.

Catia dominates industries like aerospace, automotive, shipbuilding, or Frank Gehry--large design groups building very complex products. Effectively, they own the 3-D design space. Competitors like Metaphase have given up, and PTC works primarily in quite different kinds of design (parametric design, as the name implies).

I knew this space was different from the transaction spaces that we usually follow (ERP, SCM, CRM), but I didn't realize how different until I walked into the exhibition hall and saw a) a 1/100 model of the Cologne cathedral, b) a 3-D printer, and c) an explanation of how Frank Gehry creates the skin of those wavy buildings, like the Bilbao Guggenheim. (Hint: Catia is heavily involved.)

For some years, the large transaction vendors have portrayed PTC and Dassault as aging, client-server products that will be rapidly taken over by Oracle's or SAP's PLM initiatives. Well, all I can say is don't go building revenue projections based on slicing off revenue from Dassault. If anything, these products are going to grab IT budget share in their industries, not lose it.

The reason is the virtual airplane. Dassault Version 5 carries full support for a standard that will permit design groups to create a single virtual model of a large object and have hundreds or even thousands of people working on this directly. The idea was pioneered by Boeing and Dassault on the Boeing 777, but it has only recently begun to penetrate other companies and industries.

A perfect opportunity for a software company.

And Dassault Systemes (Nasdaq DASTY) is one of the purest software companies in the world. With revenues of $1 billion, it is by no means small. But $1 billion understates the case.

Some 15 years ago, they outsourced their entire sales and marketing effort to IBM, who set up a special division devoted to Dassault products. This division has revenues of roughly $1 billion. To compare DASTY adequately with other companies that have their own sales and marketing, you should probably treat it as a $2 billion company.

Dassault doesn't just want to grow within the 3-D space. They threw up a slide about their future in manufacturing that shows as little understanding of their ERP competitors as the ERP competitors have of them.

It seems to me that the dividing line in the PLM (product lifecycle management) space that they both claim comes at the point where the product design is fixed. Collaborative design done after that point (by Agile, Matrix One, Oracle) may best be done by the transaction vendors. Before that--and that's where the money is--look to Dassault.

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