UGS hosted its annual user event in Frankfurt at the start of October. With the audience nearly double that of last year’s, MCAD attended the keynote presentations and exhibition.

Tony Affuso, CEO, heralding UGS as the first $1 billion PLM playe

UGS presented its PLM market share statistics. Source: Datatech.

Since the summer, UGS has been recruiting some of the keener minds in marketing and channel, to boost both its presence but also engage better with its channel. From the outside, it always seemed like UGS had highly capable products, with NX, Solid Edge and TeamCenter but they were not backed up with depth of channel or taking on any of the competitors in the marketing dogfights that have typified the CAD space for the last five years. This observation required updating earlier this year when UGS decided to ‘make 2D free for all’, by giving away Solid Edge 2D draughting. This offer isn’t short-term either, with a commitment to update the product each year and have between-release updates. Within weeks of its launch, there had been over 10,000 downloads. Perhaps with Autodesk’s Inventor and Dassault’s SolidWorks having captured much of the 2D to 3D market to date, something serious was necessary for UGS to get in on the act. The free 2D giveaway certainly captured the headlines; time will tell whether these 2D users can be converted to upgrade to Solid Edge.

With all this in mind, the trip to UGS PLM Europe was going to be fascinating to see how the company was now pitching itself, with presentations from CEO Tony Affuso and other VPs all flying in from UGS’ HQ in Texas.

" This year there have been considerable moves in recruiting quality people in Europe and it looks as if the company will make strides to improve the presentation and packaging of its offerings. "

The Conference is presented as a user conference, run by UGS users, although the impression I got was that it was a UGS event, to which UGS user were invited. A subtle difference perhaps but while UGS and its user group shared the stage, it felt like a very corporate event ‘in user-sheep’s clothing’. The keynote speaker was of course, CEO Tony Affuso, who has been at the helm of UGS charting some massive company and industry changes, notably its PLM vision, buying/merging with SDRC and being bought by services giant EDS and then buying itself free again as a formidable merged entity. That’s plenty of hands on experience.

Affuso kicked off his presentation with some key numbers, firstly reminding attendees that UGS was the first $1billion PLM player. Installed seats have gone from 3 million to 3.9 million this year, growing from 42,000 to 46,000 customers. UGS currently employs 7,200 people and is growing. As UGS is currently a privately held firm it doesn’t need to report public numbers but the PLM market is a tough place to compete, with IBM, Dassault, PTC and other datacentric-players. According to Affusso, 2005 was a record year for UGS, with $1.15 Billion in total revenue, 18% growth (year on year), 58% growth in total PDM and 21% growth in software revenue. The company signed 70 enterprise contracts, 44 contracts in non-traditional markets (representing a 63% increase), acquired Tecnomatix and ‘delivered’ PLM to the mid-market with the introduction of the Velocity Series. In Education, UGS now has 700,000 seats installed world-wide, with 860,000 users trained yearly.

It was interesting that Affuso’s promise was around UGS having leadership in quality of releases and while UGS was in the process of reinventing itself, it still held the same customer focus. UGS has won a number of recent awards from its customers for quality of service.

Readers should be reminded that this event ran with the ‘Airbus problem’ making the nightly news as it was having its rather expensive problem with the Airbus A380. Affuso took the chance to take a side-swipe at ‘competitors’ who let customers down in their PLM investments, showing clips from articles exploring the disaster - this could only be read as a massive dig against Dassault. Affuso’s promise was ‘we will never let a company fail’. As to if Airbus was Dassault’s fault, I am not sure. Nobody has, to my knowledge come up with any proof, but it makes for good keynote fodder and in a way, it was good to see UGS get aggressive and show some passion.

" Putting re-energised marketing effort behind its SMB aspirations should broaden the knowledge of what UGS has to offer at each level, which has probably not been the case in the past. "

Affuso claimed UGS as being number one in cPDM (that’s Collaborative Product Data Management). For future growth, Affuso is targeting four key areas; Core product, new Application Domains, new Industry Opportunities and the Mid-Market. The Mid-Market is particularly interesting, as out of the big players, UGS was first to alter its product portfolio and try and sell its high-end CAD tools to the mid-sized companies, in addition to the highly accessible Solid Edge and the Velocity Series Bundle. It’s a move that Dassault followed soon after. Of course there will always be mergers and acquisition opportunities and it’s widely known that UGS and its investors are interested in re-floating back on the market. With a successful floatation, it would be very interesting to see UGS get even more active in the acquisitions market.

One of UGS’ recent key wins was Nissan, who apparently were some way down the route to opting for Catia, having piloted it for a year and a half. Late to the table, but Nissan was an SDRC Ideas customer, Affuso said that with Nissan’s extremely disciplined and structured approach to design, and with a target of doubling the number of vehicles bought to market but halving the engineering effort, NX and Teamcenter were selected, awarding a nine digit $ deal to UGS. While writing this I am at Dassault Systemes user event in Paris and there are many counter claims about losing this deal to UGS, with one Dassault representative claiming that they actually won the benchmark ‘hands down’ with Catia but lost the deal due to UGS offering more development work. I guess it’s all history now, whatever the reason and the die has been cast in the Nissan deal.

With regards to the PLM industry, Affuso broke down the maket into three sectors, Overall PLM, cPDM and high end CAx (CAD, CAM CAE). In Overall PLM UGS claims equal first place with Dassault Systemes having 17% of the market. In cPDM, with Teamcenter, UGS claims first place with 30% of the market, having as much market share as Dassault and PTC combined. At the high-end CAx it was interesting to see UGS estimate that Dassault had 38%, PTC had 28% and UGS had 34% of the market.

Affuso then explained how UGS sees customers wanting to innovate more due to market circumstances, referring to many articles that have been written about what has been termed, ‘the Innovation Economy’. Companies now need to share and capture knowledge and work in different ways, in a global, distributed manner, to generate innovative products. Customers therefore have a greater need to model, manage and collaborate. Affuso claimed UGS’ offerings now reflected this demand.

As with all the high-end vendors, simulation is seen as a key component for design firms, Affuso terming it Lifecycle simulation. But UGS’ unique spin on this area of development is data management for simulation, announcing Teamcenter for Simulation to handle the iterative process that is necessary in design optimisation.

Conclusion

UGS has been through many incarnations in recent years; the good news is that even with all these changes, the company’s commitment to R&D and its array of products does not seem to have suffered in this process. UGS is an engineering firm first and hasn’t necessarily mastered the marketing function particularly well. This year there have been considerable moves in recruiting quality people in Europe and it looks as if the company will make strides to improve the presentation and packaging of its offerings. Perhaps the first visible sign of this has been the Velocity Series, with Teamcenter Express and the aggressive give away of a pretty useful 2D tool. Putting re-energised marketing effort behind its SMB aspirations should at least broaden the knowledge of what UGS has to offer at each level, which has probably not been the case in the past.

The SMB market though is looking pretty crowded at the moment, with everyone concentrating on the one sector. Autodesk Inventor Series, SolidWorks (a Dassault company), PTC Pro/Engineer Wildfire, UGS Velocity and Dassault’s PLM Express, mean that if you are in the market for a modelling solution, or want to upgrade your current tool, there are some excellent products out there to chose from. It’s certainly a buyers market.

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