1. Copyright 2004, Cyon Research Corporation1 An Updated View of the CAD/CAE/BIM/PLM/IPD Market Brad Holtz President & CEO Cyon Research Corporation

2. Copyright 2009 Cyon Research Corporation Our Sponsors:

3. Copyright 2009 Cyon Research Corporation

5. Copyright 2004, Cyon Research Corporation5 An Updated View of the CAD/CAE/BIM/PLM/IPD Market Brad Holtz President & CEO Cyon Research Corporation

6. Copyright 2008, Cyon Research Corporation6 The Big Picture ObservationsVectors CAE Market CAD Market Movements

7. Copyright 2008, Cyon Research Corporation7 Big Ideas – We crave stability and predictability – The earth is not a steady state system – Change not only happens, it is necessary for life

8. Copyright 2008, Cyon Research Corporation8 – We’ve always lived with change. – The rate of change is accelerating - Jerk – What is different today is that change is happening within a lifespan rather than across generations. Jerk

9. Copyright 2008, Cyon Research Corporation9 Absorption – Small scale perturbations are absorbable – We have had a tendency to take something and scale it beyond the capacity of a system to absorb it

10. Copyright 2008, Cyon Research Corporation10 199420002007 China$1,500$4,000$11,500 India $7,200$12,000$15,000 United States$52,000$70,300$79,540 Cost Differential

11. Copyright 2007, Cyon Research Corporation11 199420002007 China 34.7 17.6 6.9 India 7.2 5.9 5.3 199420002007 China$1,500$4,000$11,500 India $7,200$12,000$15,000 United States$52,000$70,300$79,540 Decreasing Pressure

12. Copyright 2008, Cyon Research Corporation12 Viscosity Impact of Proximity and Dilution Information flow gradient – Population – Wealth – Resources – Social mores – Language of business Viscosity of Transaction

13. Copyright 2008, Cyon Research Corporation13 Just imagine…….

14. Copyright 2008, Cyon Research Corporation14 MSC Ansys DS SIMULIA Siemens Altair Agile Arena Intel AMD HP DELL Lenovo Sun Apple Gateway Boxx Siemens DS Infinite Z Z- Corp Next Engine Free Design T-Splines ICEM Tekla Graphisoft Nemetschek Google Infinite Z Tech Soft 3D NVIDIA AMD/ATI Cadence Mentor Synopsis Rhino Bunkspeed Showcase Oracle SAP Adobe New Technologies? Yahoo VX Alibre Ashlar TurboCAD Redhat Apple Microsoft Google i-Seek Geomate Web3D OpenDesign Tech Soft 3D Cimmetry Rand CadPo Avatech Incat SolidWorks Inventor Pro/E Solid Edge Spatial CoCreate Our Industry Autodesk Bentley ESRI Intergraph Alias Inventor Revit Civil

15. Copyright 2008, Cyon Research Corporation15 Why Look at Vectors? Highlight opportunities Identify underlying principles Learn from other markets – How are they similar – Where are they different – What matters about the markets

16. Copyright 2008, Cyon Research Corporation16 Design Tools 1970s: Scarce resource 1980s: Local resource 1990: Personal resource 1995: Personal tool; casual users 2005: Enterprise tool; ubiquitous agent – tools are intuitive, training is immediate, support is embedded and intelligent

17. Copyright 2008, Cyon Research Corporation17 Flip-Flop of Scarce Resources 19811998 4Mhz 400 Mhz Processor speed doubles every 18 months Time Application development time decrease 2 years (Programming) Client/server 2 months (Web tools) Speed

18. Copyright 2008, Cyon Research Corporation18 Flip-Flop of Scarce Resources Cost of Processing Cycles Cost of Programming Effort 1. People get more expensive 2. Tools get better 3. Less experienced can use the tools 4. Offshoring 1998

19. Copyright 2008, Cyon Research Corporation19 CAD Pricing as Salary Multiplier 1970s: 5 to 10 years’ 1980s: 1½ to 3 years’ 1990: 9 to 18 months’ 1995: 1 to 2 months’ 1998: 3 to 6 weeks’ 2001: 0 to 8 weeks’ lower cost of entry broader range back to annual maintenance “subscription-based” pricing

20. Copyright 2008, Cyon Research Corporation20 CAD Pricing as Salary Multiplier 2007: 0 to 2 years’ 3D CAD from mainstream vendors for free; Offshoring puts “high- end” seats in low cost of labor countries.

21. Copyright 2008, Cyon Research Corporation21 Market Vectors See Use Comment Interact Build On Manufacture Civil AEC GIS Plant Mech Mechatronics EDA What do we need the model for?

22. Copyright 2008, Cyon Research Corporation22 Market Vectors Build Bombs Mech Mechatronics EDA What’s the difference between Mechanical Engineers and Civil Engineers? GIS Find Targets Civil AEC Plant Build Targets

23. Copyright 2008, Cyon Research Corporation23 Market Vectors Number of Elements Civil AEC GIS Plant Mech Mechatronics EDA NMuMMMCMM10M100MKM Civil AECGIS Plant Mech Mechatronics EDA Size Geometric Complexity Civil AEC GISPlant Mech Mechatronics EDA

24. Copyright 2008, Cyon Research Corporation24 Market Vectors Number of Stakeholders Civil AECGIS Plant Mech Mechatronics EDA NMuMMMCMM10M100MKM Civil AECGIS Plant Mech Mechatronics EDA Size Geometric Complexity Civil AEC GISPlant Mech Mechatronics EDA

25. Copyright 2008, Cyon Research Corporation25 Market Vectors Number of Stakeholders Civil AECGIS Plant Mech Mechatronics EDA Discontinuity between investors and beneficiaries

26. Copyright 2008, Cyon Research Corporation26 Owner’s Perspective FRONT-END LOAD ESTIMATE SCOPE DESIGN PROCURE CONSTRUCT START-UP MAINTAIN SUPPORT IMPROVE REPLACE EXISTING FACILITIES NEW FACILITIES OPERATE RENEW from a presentation by Jim Porter of DuPont

27. Copyright 2008, Cyon Research Corporation27 Space Processes Staples Air Auto Bio/ Pharm Processed Foods Fad Consumer Electronics Consumer Durable Software AEC Office AEC Residential Plant Monuments Infrastructure

28. Copyright 2008, Cyon Research Corporation28 AEC Office AEC Residential Plant Monuments Space Processes Staples Air Auto Bio/ Pharm Processed Foods Fad Consumer Electronics Software Consumer Durable Infrastructure Sales Life of a Model Type Bio/ Pharm Processed Foods AEC Air Auto Staples

29. Copyright 2008, Cyon Research Corporation29 Visualization Number of users Complexity of Solution Virtual Reality Web Viewing Digital Factory Digital Mockup 2D/3D View & Markup Quality From a EDS presentation to Industry Analysts in 2002

30. Copyright 2008, Cyon Research Corporation30 PLM Create Design Analyze/Engineer Manufacture Manage Maintain Create Collaborate Control Create Manage Publish Plan Design Buy Make Sell Service Test Deploy Improve

31. Copyright 2008, Cyon Research Corporation31 Other Vectors Design Requirements Design Intent Testing Metrics Visualization Wireframe Surface Solid Materials Tolerances Mfg. Process Linkages Movement Physics

32. Copyright 2008, Cyon Research Corporation32 Nolan & Norton Enterprise PDM Engineering PDM PLM ’70s

33. Copyright 2008, Cyon Research Corporation33 ExploreAppraise/ Select DefineExecuteOperate Project Phase Potential to Impact Value Authorization Value-Improving Practices Costs Committed Life-cycle Costs Funds Spent

34. Copyright 2004, Cyon Research Corporation34 Competitive/Trust Relationships Cost Trust Value Trust = f Intimacy X Competency Risk From presentation by Jim Porter at ENR Construction Summit 2003

35. A look at the CAE Market Copyright 2008, Cyon Research Corporation35 Straightforward: “If someone steps on the phone, will the resulting deflection of the cover damage the circuit board inside?” Hard: “If I remove the cover, will the closure tab break off?” Difficult: “If I drop the phone, what will happen? – and will the call get disconnected? Big: For an extremely fine mesh with no defeaturing, “If I drop it in a certain way, will it break?” Automatable: “If I drop it, will it break?”

36. Copyright 2008, Cyon Research Corporation36

37. Nature of the Question/Problem Big Degrees of Freedom "Hairy" Degrees of Freedom Difficult Small Straightforward SimpleComplex It’s the Question, Not the Model Copyright 2008, Cyon Research Corporation37

38. Nature of the Question/Problem DifficultEsoteric Degrees of Freedom Blue: Automation makes sense -- not too hard and not too big. Automatable Difficult Green: Integration with CAD system takes priority Straightforward SimpleComplex Integration and Automation Copyright 2008, Cyon Research Corporation38

39. FEA Copyright 2008, Cyon Research Corporation39

40. CFD Copyright 2008, Cyon Research Corporation40

41. Nature of the Question/Problem Abstract CAE Modeling CAE models based on engineering and relationships, independent of geometry or topology. Abstract CoMeT GeoSim Abstract (Simmetrix) MSC Fluid Connection Automation Model-based Templates CAE models based on engineering and relationships, specific to a particular geometry or topology. Model-based Ansys Workbench MSC SIM Enterprise NX RDV Simulia SLM Mesh-based Templates CAE templates for specific load cases or geometry. Mesh-based Altair Process Manager Ansys Workbench MSC SimXpert StraightforwardDifficultHairy Copyright 2008, Cyon Research Corporation41 PIDO and Beyond

42. Copyright 2008, Cyon Research Corporation42 Market Maps FormatsToolkitsApplicationsServices Create Modify Consume Data Integrity Compatibility Bi-directional Geometry Geometry Security Referenceable Image Bandwidth Speed Drag & Drop Translators Healers Redliners Digital Mockup Viewers Design Analyze Fix Problems Translate RP Distribute Host CAD CAM Translators Healers CAE Redliners Digital Mockup Viewers WhatWhy

43. Copyright 2008, Cyon Research Corporation43 Market Maps Application CAD Design

44. Copyright 2008, Cyon Research Corporation44 Reach vs Range lawn mower, refrigerator hospital hand tools, toaster, house Process Complexity ProductComplexity dominated by modelingcapability aircraft, jet engine, university dominated by teaming capability in an extended enterprise from a presentation by Computervision

45. Copyright 2008, Cyon Research Corporation45 Enterprise ProductivityPersonal Productivity Domains Project Complexity

46. Copyright 2007, Cyon Research Corporation46 Enterprise ProductivityPersonal Productivity Product-Centric Mechanical Design Process-Centric Mechanical Design Architecture, Engineering, & Construction Process & Plant Industrial Design GIS Shipbuilding & Offshore Market Map Project Complexity Drafting, not Design Drawings, not Models Geometric Difficulty

47. Copyright 2008, Cyon Research Corporation47 Enterprise ProductivityPersonal Productivity Product Centric Mechanical Design Architecture, Engineering, & Construction Process & Plant Process-Centric Mechanical Design Industrial Design GIS Shipbuilding & Offshore Drafting, not Design Drawings, not Models AutoCAD MicroStation Acad Map, Arc/Info, GeoMedia TurboCAD AutoCAD LT REVIT Bentley Architecture Revit ArchiCAD CATIA UGS Alias AutoStudio SolidWorks Inventor Solid Edge OneSpace Designer Think3 VX IronCAD Pro/E WildFire Studio Tools Think3 Project Complexity SmartPlant 3D Aveva PlantSpace AutoPlant SmartPlant Offshore CATIA Geometric Difficulty Market Map of 3D CAD Space

48. Copyright 2008, Cyon Research Corporation48 Enterprise ProductivityPersonal Productivity AutoCAD MicroStation Alias AutoStudio Studio Tools Think3 CATIA UGS TurboCAD AutoCAD LT Pro/E WildFire Market Map of 3D CAD Space Project Complexity Geometric Difficulty SolidWorks Inventor Solid Edge…

49. Copyright 2008, Cyon Research Corporation49 Enterprise ProductivityPersonal Productivity Product-Centric Mechanical Design Process-Centric Mechanical Design Product-Centric Mechanical Design Architecture, Engineering, & Construction Process & Plant Industrial Design GIS Project Complexity Process-Centric Mechanical Design Drafting, not Design Drawings, not Models Geometric Difficulty Process-Centric Mechanical Design Shipbuilding & Offshore Market Map

50. Copyright 2008, Cyon Research Corporation50 Enterprise ProductivityPersonal Productivity AutoCAD MicroStation Alias AutoStudio Studio Tools Think3 CATIA UGS TurboCAD AutoCAD LT Pro/E WildFire Market Map of 3D CAD Space Project Complexity Geometric Difficulty SolidWorks Inventor Solid Edge…

51. Copyright 2008, Cyon Research Corporation51 PLM vs not PLM PLM is an opportunity to revolutionize the way a company does business impose business processes to optimize the enterprise achieve for massive gains At the expense of increased cost and increased risk Non-PLM solutions solve the same business problems without optimizing for the enterprise without the corresponding business gains without the risk of business process change at a significantly lower cost PLM = greater risk and cost in exchange for a much greater reward

52. Copyright 2008, Cyon Research Corporation52 Enterprise ProductivityPersonal Productivity Domains Project Complexity

53. Copyright 2008, Cyon Research Corporation53 PLM Opportunity to redesign processes to optimize the enterprise Constraints imposed to change current practice Non-PLM Flexible aligned to current practice Domains Process Constraint

54. CONFIDENTIAL54 The ModelArchitectEngineerContractorSpecialty contractor Fabricator /supplier Owner Create it: Revit Bentley Architecure ArchiCAD AllPlan Revit Structures Bentley Structural Tekla Tekla Vico Software Design Data Nemetschek Strusoft StuctureWorks Tekla Design Data Fabtrol Tekla Use it to Collaborate with: Buzzsaw Constructware ProjectWise Vico Software Build with it Primavera Microsoft Project Deltek (Meridian) Timberline Tekla Vico Software TeklaFabtrol Manage from it: Primavera Microsoft Project Deltek (Meridian) Timberline Vico Software Primavera Microsoft Project Deltek (Meridian) Tekla Timberline Vico Software Interoperates with: Solibri Staad RAM Microsoft Excel Timberline Vico Software CAM

55. Glow = Architect directly engaged Main Office Offsite Construction Stack Components Post- Occupancy FM Collaborati on Framework Scheduling Project Manageme nt 5D Visualizati on Project Sequencin g Site Manageme nt Supply Chain Manageme nt Change Control Cost Control Procureme nt Cast-in- Place Design Precast Fabrication Precast Design Steel Fabrication Steel Design Fabrication Control (CAM) Structure InteriorsEnclosure Electrical & Control Systems Electrical Design Mechanical /HVAC HVAC Design Duct Fabrication Fabrication Control (CAM) Control Systems Design Enclosure Design Enclosure Design Enclosure Fabrication Formwork Fabrication

56. Copyright 2005, Cyon Research Corporation56 http://www.gartner.com/teleconferences/attributes/attr_124171_115.pdf

57. Vendor Stacks in Design Copyright 2007, Cyon Research Corporation57 Autodesk Bentley Open Architecture Y Y N Structural Design y y y HVAC Design y y n Civil Design y y n Plumbing Design y y n Electrical Design y y n Structural Analysis n y n Environmental Analysis n n n Code Analysis n n F

58. Vendor Stacks in Construction Copyright 2007, Cyon Research Corporation58 Autodesk Bentley Open Construction Design n n y Steel Design n y y Precast Design y y y CIP Design n n n Fabrication Design n n y Collaboration Framework y y n Project Management n n n Project Sequencing n n y 5D Visualization n n y Scheduling n n n Fabrication Control (CAM) n n Y Procurement y n n Cost and Change Control n y n Supply Chain Management n n n Site Management n n n

59. Differentiation Between Mainstream and Specialized Copyright 2008, Cyon Research Corporation59 – http://cyonresearch.com/whitepapers http://cyonresearch.com/whitepapers – two classes of MCAD customers – two different business models – Mainstream MCAD vendors and Specialized MCAD vendors, given similar research and development budgets, will spend those budgets differently. – Mainstream: focus on providing improvement and advancement in the day-to-day lives of the average user. – Specialized: split their budgets between the broad needs of the average user and the narrow-but-deep needs of their demanding large clients’ niches. – V6 vs ST: Divergence within specialized MCAD

60. Copyright 2008, Cyon Research Corporation60 BIM is not PLM PLM is an opportunity to revolutionize the way a company does business impose business processes to optimize the enterprise achieve for massive gains At the expense of increased cost and increased risk So is BIM But, PLM focuses on a single data stream. BIM provides that, but externally it focuses not on the totality of data, but on the handoffs

61. Joint Study Copyright 2008, Cyon Research Corporation61 Cyon Research, in cooperation with Merrill Lynch Investment Research, conducted a CAD/PLM user survey. We posed 21 questions on a variety of subjects, including user classification by industry and position, specific vendor product usage, purchasing criteria, and spending intentions. We received responses from more than 200 users in a variety of sectors, including automotive, aerospace, industrial, AEC, and other markets. The findings in this report are solely the results of independent analysis by Cyon Research. Merrill Lynch has previously published their independent conclusions on the survey data in their own report.

62. Copyright 2008, Cyon Research Corporation62 Revit and Bentley Initial price and transition costs RevitBentley Disruption: Opportunity to use software transition to change system processes RevitBentley Cost containment - Managing engineering/product development costs RevitBentley 13 12 11 10 9 8 7 6 5 4 3 2 1 Least Most Function - Other RevitBentley

63. Copyright 2008, Cyon Research Corporation63 AE and C are different Different drivers Different needs Different criteria for decisions

64. Copyright 2008, Cyon Research Corporation64 Relative Importance: AE and C Annualized Cost AEC Implementing a Design Outsourcing Model AEC Total Cost of Ownership AEC 13 12 11 10 9 8 7 6 5 4 3 2 1 Least Most Improving Asset Utilization AEC

65. Copyright 2008, Cyon Research Corporation65 How does your firm differentiate itself from its competitors? (1 - most significant, 7 - not significant)All Respondents Those likely to decrease spending Those likely to increase spending Value Price3.773.823.63 Quality2.542.412.44 Availability3.233.153.00 Features3.092.832.94 Customization3.022.742.31 Design2.892.552.81 Service2.752.632.69 RANKING Price777 Quality112 Availability666 Features555 Customization441 Design324 Service233 Strength of Response Price222 Quality Availability Features Customization Design Service

66. Investing in Hard Times Copyright 2008, Cyon Research Corporation66

67. Investing in Hard Times Copyright 2008, Cyon Research Corporation67

68. Copyright 2008, Cyon Research Corporation68

69. Investing in Hard Times Copyright 2008, Cyon Research Corporation69

70. Copyright 2008, Cyon Research Corporation70 Round 2

71. Copyright 2008, Cyon Research Corporation71 What’s Happened Hold all new acquisitions – 25% Delay acquisitions in Progress – 19% Cancel acquisitions in progress – 14%

72. Copyright 2008, Cyon Research Corporation72 What’s Happened Discontinue Software Maintenance: For unused seats – 22% Selectively – 15% Across the board – 8%

73. Copyright 2008, Cyon Research Corporation73 What’s About to Happen Hold all new acquisitions – 8% Delay acquisitions in Progress – 7% Cancel acquisitions in progress – 5%

74. Copyright 2008, Cyon Research Corporation74 What’s About to Happen Discontinue Software Maintenance: For unused seats – 7% Selectively – 7% Across the board – 2%

75. Copyright 2008, Cyon Research Corporation75 Overhang Hold all new acquisitions – 31% Delay acquisitions in Progress – 35% Cancel acquisitions in progress – 33%

76. Copyright 2008, Cyon Research Corporation76 Overhang Discontinue Software Maintenance: For unused seats – 27% Selectively – 37% Across the board – 23%

77. Copyright 2008, Cyon Research Corporation77 The Good News Use the slow time to jump forward on engineering IT projects, but within the current budget 15% 12% 27% New spending for strategic advantage against competition 10% 11% 35%

78. Copyright 2008, Cyon Research Corporation78 Thank you! Brad.Holtz@CyonResearch.com cyonresearch.com cofes.com