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December 1, 2001

3 Min Read
Q&A: CAD/CAM mergers spawn host of specialty applications

Editor's note: Change is the only certainty, and that maxim clearly applies to the CAD/CAM industry, which recently posted another major merger. SDRC, the vendor whose I-deas software is the standard at Ford Motor, has been acquired by EDS, the parent company of Unigraphics (UGS). IMM invited Nitzan Sapir, president and ceo of Cimatron Ltd., to share his views of the industry in light of this and other consolidations. His company offers a specialized CAD/CAM solution for the tooling industry called Cimatron E. 

IMM: In the early days of the CAD/CAM industry, there were many companies. Now there are three large vendors—Dassault, EDS, and PTC. What drove the most recent of these consolidations? 

Moldmaking is unique because it demands both mold design and NC machining.

Sapir: What has been happening in the past two years is that the profitability of CAD/CAM is getting very low. What used to cost $25,000 is now available for $3000 or $4000. The major vendors, which I will call supercompanies, numbered four or five up to two years ago. They controlled the market for Fortune 500 companies. These supercompanies decided they needed to be more efficient as profits began to decline. They reasoned that combining the product lines would save administration expenses, hence the merger trend. 

Also, to be able to compete in the area of major OEM projects, you have to be a larger company yourself. A Fortune 500 company wants to hire a large company that can handle all of its needs, so that is another reason for the consolidations. 

IMM: What are some results of these mergers? 

Sapir: Large OEM companies are finding it is extremely difficult to make a change in their CAD/CAM system now. Why? All of the major vendors are aiming their efforts at PDM [product data management], at controlling and managing engineering data. These are huge projects with lots of customization and consulting. As a result, the level of involvement of the software vendor in the overall processes of the OEM's businesses is so high it becomes cost-prohibitive to cut it off. So the supercompanies have found that by controlling the PDM system, they can control the account itself. 

Another result is that while the supercompanies may dominate the Fortune 500, they can't cover the entire market. There are many submarkets—one of which is the tooling industry—that are better served by focused applications. 

IMM: How does specialized software benefit the process of mold design? 

Sapir: Mold design is a unique industry because of its dual nature. It demands a system that can do both mold design and NC machining. SDRC, PTC, UGS, and Dassault all have solutions for this market segment, but they don't invest the same resources that a specialist will. To a certain degree, they leave this area open for competitors that specialize in this area. 

In the NC market, there are 15 to 20 privately held players, all small to medium companies. They have a strong presence in specific territories, but are usually not global. However, in the mold design area, there are few companies that specialize, and general CAD solutions do not have the functionalities specific to the needs of mold designers. 

Specialized packages offer a solution that addresses design needs plus an NC solution. Specialists also put all their resources and knowledge toward this market. In most cases, where a specialized package competes against a big guy, the specialist wins the business. 

Contact information
Cimatron Ltd.
Givat Shmuel, Israel
+972 (3) 531-2098
www.cimatron.co.il
[email protected]

 

 

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