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26 Apr 2011

CIMdata evaluates PLM-market in 2010 and gives optimistic forecasts

Vladimir Malukh

CIMdata justly characterizes itself as “a non-biased, independent, global consulting firm that has established itself as a world-leading source of information and guidance to both industrial organizations and suppliers of PLM technologies and services”. isicad is proud of its fruitful contacts with CIMdata established at least from 2006 when Ken Amann, at that time - Director of Research at CIMdata, as a keynote speaker participated in the Second isicad Forum in Novosibirsk. Since that time isicad.ru has multiply published in Russian summaries from CIMdata global reports and other materials that contributed to the PLM awareness and progress of the Russia & CIS market.

In March (USA) and April (Europe), CIMdata has held (and will in May hold in Japan) its PLM Global Vendor Forums where in particular presented its comprehensive analysis of the state, trends, and forecasts of the world PLM market.

CIMdata has kindly provided isicad with the full presentations and permitted us to publish our own summary, comments, and conclusions that probably give to many readers a rather clear impression of what, according to CIMdata, PLM is today and will be tomorrow. My great thanks to Ken Amann who provided isicad with these valuable data and made important advices and editing for this article.

It is necessary to note that the data and estimates, given by CIMdata, refer for the calendar year of 2010 and thus may differ from the vendor’s fiscal years reported financial data. Also all estimates are net of royalties to eliminate double counting of revenues. Finally, only data related to the PLM sector are counted but not those from other areas, such as ERP for Oracle and SAP, or multimedia products for Autodesk.

The main conclusion of the analysis for the year 2010 is quite optimistic - industry (PLM and CAD) revenues have almost reached pre-crisis level of 2008, and for the second time in the history exceeded $ 25 billion.The CIMdata experts predict significant growth in revenue from license sales and services over the next five years:

The following figure presents the Mainstream PLM market presence history for the leading solution suppliers. Market presence includes their direct revenues and the related revenues of their partners and presents their footprint in the PLM market. Dassault Systèmes acquired IBM’s PLM Group during 2010 and those revenues are included in CIMdata’s estimates for DS.

Now we give the performance of Comprehensive PLM leaders in terms of revenue, as well as the distribution of income according to the market sector of products and services. In the PLM domain, Oracle and SAP do not deliver CAD solutions or other authoring tools – they focus on the collaborative Product Definition management sector. Autodesk stands out from the other five, because a significant proportion of its revenues come from the architectural and construction market, and while small proportion of products for simulation and analysis.

The following chart shows that the lion's share of PLM-industry leaders’ income is mainly selling software licenses, while revenue from services is in the best cases as high as 20%. This is explained by the fact that a significant proportion of services is provided by the partner companies.

Major services providers for PLM-market:

From all the above we can conclude that the market leaders are companies with rather diverse structures: some are focused on the problems of discrete manufacturing, for others PLM is not the only area of business, thirds concentrate themselves on certain industries (AEC, EDA). Six of the PLM suppliers have incomes exceeding the level of $ 1 billion:

Distribution of the functional segments (MCAD / CAE / AEC / EDA) is quite diverse. It is significant that even in a segment of MCAD CIMdata experts distinguish two substantially different areas - industrial design (Design-focused MCAD) and manufacturing (Multidiscipline MCAD) with diverse distribution of shares and different composition of the leaders:

The most successful segment of the PLM Tools market is that of the products for simulation and engineering analysis. Over the past five years, this segment showed increases in income, even in times of financial crisis and the decline in production:

The following presents revenue history for the leading electronic design automation tools. Once the former market leader, Cadence has passed its leading position, reducing rates by almost half (a major restatement of Japan revenues in 2008 was a major contributor), and gave the palm to Synopsys, which showed steady growth in 2010 by reaching a plank of $1 billion. The third leader - Mentor Graphics, has survived a small decline in 2008-2009, but now had returned almost to the pre-crisis levels.

While still retaining its absolute leadership in the AEC market, Autodesk, however, has not regained its pre-crisis indicators. At the same time, its main rivals in this sector – Bentley and Intergraph – show almost steady growth and, judging by the income were not much injured during the crisis time. Autodesk was impacted by the sharp decline in the SMB market while Bentley and Intergraph were supported by the infrastructure investments made by governments during the crisis.

One of the fastest growing segments - cPDm, data management, team-building, visualization, etc.

Summary

  • PLM market growing solidly
  • Expansion areas will drive growth
    • New industries
    • New functionality, e.g. compliance
    • SI/VAR/resellers will need to expand skills, adapt business models
  • Industry trends
    • Automotive, Electronics & High-tech, F &A will continue growth
    • Retail & Apparel adoption rate is increasing
    • Pharmaceutical, Food & Beverage, CPG are the fastest growing process industries
    • Petrochemical, Utilities, AEC and infrastructure sectors are increasing adaption
    • Financial services and insurance are adapting PLM concepts and solutions

See also:



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