Changes are coming to CAD industry and you can feel it. I attended Develop3D Live Boston event earlier this week and had a chance to compare my notes with industry colleagues about current CAD and engineering software development trends. As we see CAD companies are transforming their business and technologies, the question about business model is the one that drives interest. Just two decades ago, a typical CAD packages was sold with permanent license, using resellers channel, required installation, training and support. We all know examples of successful CAD channels and the way successful CAD business works (or worked until now?). CAD business supply chain was built on top resellers channels and services.
Fast forward in 2018. Major CAD vendors are moving towards selling traditional CAD packages subscriptions online or event developing SaaS (or cloud) tools. The last one requires even less IT and resellers, can be activated online and can provision hundreds or over thousands users in a matter of few hours.
As companies are changing their business models, we can see transformations on a business side of CAD and engineering software market. It includes establishment of new businesses focused on providing digital and cloud experience. Another process which is happening is consolidations of small resellers.
Develop3D published recently an article – Autodesk ‘reseller pressures’ lead to acquisitions in UK.
The move comes as Micro Concepts managing director Peter Hurst blamed an increasingly fractious and competitive Autodesk software reseller space for forcing smaller outfits to consider their future operations. “With smaller resellers like ourselves coming under continued margin pressures, we became concerned that longer term we wouldn’t be able to continue to deliver the specialised resources and solutions that our customers across the UK need,” explained Peter Hurst.
Martyn Day of Develop3D prediction from this article that future will show us a small number of mega VARs.
“This isn’t the first and won’t be the last Autodesk VAR to sell up,” says DEVELOP3D contributing editor Martyn Day, who expects the future of the CAD software reseller market to revolve around a small number of ‘MegaVARS’ around the world. “At one point, the Autodesk VAR channel was the envy al all its competitors. Over time and changing its business model, Autodesk now goes more direct at the enterprise level and online for subscriptions.” The net result of this has been VARs shutting down or selling off to larger, resellers that have more diverse incomes.
Consolidations are not only happening in Autodesk channel. Solidworks channel is consolidating as well. Just one example is mega consolidation of PLM Group Solidworks reseller that combined six resellers over the course of last seven years. PLM Group is the largest Dassault Systèmes SolidWorks partner in Northern Europe serving 5000 customers from a wide range of industries in Sweden, Denmark, Norway, Finland, Estonia and Latvia. We serve our customers in nine languages.
PLM Group, the largest Dassault Systèmes SOLIDWORKS partner in Northern Europe today announces the acquisition of the Norwegian reseller ProNor AS. According to Jan Lundström, CEO of PLM Group, acquiring ProNor is the last puzzle piece in our ambition to become a full pan-Nordic SOLIDWORKS and 3D Systems partner. “Pronor’s Norwegian customers will continue to enjoy the same qualified support from local employees as before, while benefitting from our group abilities to further develop their business.”
As consolidation is moving forward and companies are introducing more tools and services online, the question I want to raise – what is the end game of CAD resellers consolidation? It is a time for analysts and industry pundits to come with predictions.
Here my prediction. VAR consolidation process can end up by the event of CAD vendor acquiring resellers network. Can Dassault Systemes buy all its Solidworks VARs? It might be not as crazy as you might think about. Historical example – acquisition of IBM channels by Dassault Systemes back in 2009. Check this old article by Dasault Systemes – PLM Consolidation Continues—Dassault Systèmes to Acquire IBM PLM.
What is my conclusion? We are going to see future centralization and consolidation of resellers. Existing resellers will have to live in a new word of CAD online services and digital transformation. We might come to the situation in which companies like Autodesk or Dassault Systemes, will buy a small group of consolidated resellers (one big reseller per country). At the same time, we can see an increased amount of resources and digital services provided by new digital marketing and digital resellers channels. Just my thoughts…
Best, Oleg
Disclaimer: I’m co-founder and CEO of OpenBOM developing cloud based bill of materials and inventory management tool for manufacturing companies, hardware startups and supply chain. My opinion can be unintentionally biased
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