GrabCAD: Social Network or Cloud PLM?

We have about 1.2 million users in community today, 15,000 Russian users among them. The Library has about 400,000 3D models.

I look at the growth rate of our community quite frequently and we are still on an exponential growth rate. This means it’s not only increasing but increasing at an increasing rate. I don’t know what the upper limit is… maybe it is several million.

We will make money by selling services like Workbench. We do not plan to make money through advertising or monetization of our community directly. The company is about what we call Open Engineering — providing services and tools that help mechanical engineers to take advantage of the Internet and digital revolution. The community is a big part of that, and the community helps our business a lot by giving us visibility into the problems that engineers are struggling with.

Our product Workbench came directly out of conversations with engineers in our community. We asked them about things they work on, things they struggle with, things we could help them with. Many of them said: «Oh, we really like the community, we like the fact that I post a 3D model and other people can see it. But I’m a professional engineer and I would like that sort of visibility but I would like to make it private. In other words I can’t take model that I’m designing for my company and put it on a public web that everyone can see it. But I like the tool. So could you give me something like that in a private setting?»

And this is essentially how we started Workbench. We took some of the similar technologies underpinning how we use and manipulate 3D models in the community and we put them in a private setting that allowed individuals to share CAD models with just selected people. Of course since then we added a lot of file management tools and Workbench is now a cloud-based PDM system.

No, we are not yet ready to disclose the numbers. We’ve really been selling Workbench for few months. So it’s relatively early and we are happy with the growth. But these are not numbers we could comfortably share yet.

There are two different sides of our business. On the community side we have several competitors, but we don’t really view it as a competition, because it is not exclusive. There is no reason why a user can’t be a member of 3dcontentcentral and GrabCAD. And many are — people are members of lots of communities. When we think about competition, we tend to focus more on the Workbench application, — because again, that’s how we are making money. And typically you are using only one PDM system, you won’t probably use multiple PDM solutions. In that area our primarily competition is actually a file server. Most of the companies that we are targeting are small to mid-sized companies. And those companies can’t afford a lot of traditional PDM or PLM solutions. So the vast majority of companies that buy Workbench, previously used file servers. They didn’t buy anything to solve this problem. Most of our customers can’t afford the existing PDM/PLM tools, or they are not appropriate for them. So our biggest competition is «do nothing».

Our solution is a lot more than Dropbox, however there is a similarity – it is a web service. But that’s about where the similarity ends. Workbench allows you to lock files, check them in and check them out, synchronize with your desktop, do certain operations within your CAD system. It’s much more of a PDM solution than simple file server solution.

I actually visited one company yesterday. Most of our companies we don’t visit, we call, but this company is near our office. They are a plastic injection molding company that makes components for medical devices, so they are mid-sized manufacturer with hundreds of employees. They are a great example of our customer: typically hundreds of employees in the manufacturing space, and they are big enough to have a lot of CAD files, and CAD file management becomes a problem – somebody is wasting a lot of time managing CAD files manually. But they are not so big to invest in hundred thousand dollar PLM solution.

Let me tell you where the idea came from. As we built Workbench as a file management tool, we realized that once you have your files on the cloud, it makes a lot of sense that you make certain operations on them in the cloud. Simulation is always a good example, because of the processing power involved. We don’t have such tools in the Toolbox right now, but it makes a lot of sense to run as a cloud-based application. So we launched Toolbox as a way of talking to partners who provide other applications.

We worked with several CAD companies, one of them is Autodesk. So the first one we launched was Fusion 360, which is their new direct modeling tool, and runs on top of GrabCAD Workbench as does AutoCAD 360. We also have Lagoa, a cloud-based rendering tool, that runs on top of Toolbox. And then we have a longer list of applications that don’t run inside the cloud but are able to access Workbench files from within an installed application — Keyshot, IronCAD, there are few others. So Toolbox is our way to making Workbench files and processes available to other applications. Some of those applications are free, some of them have additional charges and for some of them you have to buy separate third-party applications.

First, I think it depends on where you are. I definitely see that the US market has moved to adopt the cloud, partly because Internet connections are very good here. So the connectivity is mostly a local question. If you don’t have good connectivity, then the cloud is a bad solution. But in the US almost every company has a fast and reliable Internet. That’s different overseas and for some parts of world it’s not true. This is one thing that will slow down the adoption of cloud solutions in some regions, but I think it will change over time. The second question is around security. I think the US probably is ahead in this area as well. Many US companies have moved core business processes onto the cloud applications. Salesforce.com, for example, has many Fortune 500 companies, who are managing their customer relationship data, which is just as critical as CAD files. There are also ERP solutions that mid-size companies may use to run financial part of their business. There are a lot of large successful SaaS companies that run on the cloud.

We do get questions around security, and we address it in the same way many other companies address it. We provide the information how we manage security and that we take it very seriously. Usually we are able to overcome the issues very quickly by addressing specific questions. We also point out that security is about choices, and the way you manage your CAD files today is probably pretty insecure. Most of users will admit that they email CAD files, use DropBox, they use a variety of systems that are clearly far more insecure than a cloud based solution, where you have tracebility and logging. If you email CAD file you have no idea where this CAD file went and no ability to track it. Anybody in the world could have your CAD file a minute later. When companies think what the alternatives are, it often helps them to think more clearly how we do the security. We are responsible, we have procedures, we have technology and to provide high security in the way that really is not an option for different methods they might use to share CAD files.