| Abstract: | Dassault sees stronger demand for its product lifecycle management technology and announces an acquisition and a new 3D product; competitor PTC marches toward its $1 billion revenue goal. |
| Keywords: | Product lifecycle management, PLM providers, Dassault, PTC, quarterly earnings, PLM market growth, PLM leaders, ICEM, collaborative product design, 3D design, Acrobat 3D, 3D Live, digital manufacturing, product design |
In announcements that exceeded growth predictions for the sector, two product lifecycle management software providers this week revealed double-digit improvements in year-over-year sales.
Dassault Systemes and Parametric Technology Corp. (PTC), two of the leaders in the PLM market, parlayed strong demand for their product development and collaboration tools into healthy quarters, both ended March 31, 2007.
For France-based Dassault, revenue for the first quarter of 2007 spiked 15% to €290.9 million. On a conference call today with analysts to discuss the results, Dassault President and CEO Bernard Charles said the company's March 2006 acquisition of MatrixOne has begun to pay dividends. Dassault nested the MatrixOne technology in its ENOVIA product data management offering, giving the suite more business process workflows and templates. Revenue from ENOVIA jumped 139% in the quarter; excluding the impact of MatrixOne, the growth was still a strong 29%.
Net income remained essentially flat for Dassault compared with the same period in 2006, as higher sales and marketing expenses cut into the revenue gains. For the quarter, the company reported net income of €32.9 million, compared with €31.3 million in the year-prior period.
Dassault also announced that it will spend €51.4 million to acquire U.K.-based ICEM, which markets software for styling, surface modeling, and rendering. According to Charles, ICEM has 700 customers concentrated in the automotive and aerospace industries. Dassault intends to incorporate ICEM's technology into the CATIA suite, which includes 2D and 3D CAD applications, and use it as an inroad to the consumer goods, high tech, and CPG markets. Dassault said the acquisition should be completed by June.
Looking forward, Charles said Dassault will introduce 3D Live, which will be the company's first fully Web-based application. The product, scheduled to be announced at Dassault's user conference next week, will deliver a 3D collaboration tool to members of the enterprise who are not proficient in CAD and other design programs. Charles described 3D Live as a tool for these users to navigate, search, and collaborate on product development.
Adobe last year introduced its own product — Acrobat 3D — for creating 3D PDFs that can be shared among all functional roles in the enterprise.
In a claim that is similar to other PLM providers' argument against Adobe's offering, Charles said the differentiator between 3D Live and Adobe's product is that 3D Live will bundle all of a product's data in its files.
"I don't see this as a competing solution," he said on today's call. "I think with 3D Live, you just get access immediately to everything that has been created." This, he said, gives the 3D files a depth of information that designers and product managers need to have at their fingertips. 3D Live will also be compatible with design systems from other PLM vendors, Charles said, noting that Dassault has already developed plug-ins for some of these, though he did not specify which ones.
Earlier in the week, Dassault competitor PTC posted strong results for its fiscal 2007 second quarter. Revenue topped $228 million, up 14% from the second quarter of 2006, with license revenue jumping 31%. The company's bottom-line improvements were even more dramatic, as net income soared 62% to $17.4 million.
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