With some 450,000 “commercial” users and a license base of 2.2 million (including near-zero cost educational licenses) Dassault Systèmes' SOLIDWORKS is by far the biggest player in the mainstream mechanical 3D CAD market. Overall, the software represents one-third of the global commercial mechanical 3D CAD segment.

The company can look back on a sensational 2016. In what most analysts regard as a mature market, SOLIDWORKS’ CEO Gian Paolo Bassi has delivered great results over the past three years.  Last year revenue went up by 13 percent to reach 626 million Euros, or almost $710 million. According to Griffin Securities’ senior analyst Jay Vleeschouwer, this result reflects high growth in maintenance revenue plus 60,000 new licenses.

Everything looks great financially for the SOLIDWORKS chief. In addition, the company's technologies are generally holding their own against mainstream competitors.

There is still one big issue casting a shadow on Bassi's leadership: the challenge of getting the SOLIDWORKS user community to adopt the tools and platforms that modern forms of product development require. 

As products become more complex with sensors, electronics and advanced software, mechanical and electrical CAD is no longer enough. The IoT, digital twin concepts, augmented and virtual reality, 3D printing and distributed manufacturing all bring new needs to the table. A broader platform will become a necessity for most design teams, whether or not they realize that today.

“Bingo! Yes. In fact, this is our fundamental strategy as a part of Dassault Systèmes. And the centerpiece of that strategy is the 3DEXPERIENCE platform,” said Bassi in today’s PLM TV News report.

But how ready is the SOLIDWORKS community to adopt this platform? So far, uptake has been limited. But Bassi hasn’t given up — on the contrary, he believes that the arguments for investing in the 3DEXPERIENCE PLATFORM (“3DX”) are so strong that over time, no user can afford to abstain from connecting to this platform.

Will Bassi succeed in winning over SOLIDWORKS users? Get ready to meet a PLM leader who listens curiously to both customers and employees, and who has been instrumental in creating a new growth boom for SOLIDWORKS.

In this TV-report you will also hear from:

• Denny Bahl, engineering manager at Innovative Plastics Inc. and SOLIDWORKS Chicago User Group Leader & Chicago West User Group Leader
• Michelle Boucher, VP of Research for engineering software at analyst firm Tech-Clarity
• Peter Bilello, president and analyst of the strategic management consulting and research firm CIMdata
• Jay Vleeschhouwer, managing director and senior analyst at Griffin Securities
• Kishore Boyalakuntla, Dassault Systèmes SOLIDWORKS’ senior director of Portfolio Management

Easier Said Than Done: Moving SOLIDWORKS Users in the 3DEXPERIENCE Direction

Getting the SOLIDWORKS community to start using the bridges they have created to 3DX is easier said than done. Although SOLIDWORKS users are probably the CAD industry’s most loyal group, their attitude towards Dassault Systèmes' president and CEO Bernard Charles, and his proposals, is still quite skeptical.

As a result, the adoption rate of these "bridges" to Dassault Systèmes’ 3DX platform, such as Conceptual Design, Industrial Design and X Design, has been sluggish.

Taxal analyst Allan Behrens agrees:

“I must say that my feedback from their customers and channel doesn’t reflect a massive uptake in use of the ‘new’ SOLIDWORKS or other Dassault social tools. The average SOLIDWORKS customer still has but a handful of seats and is most often used in small companies, for small seat installations, in one location.”

Having said this, the SOLIDWORKS user community is a benchmark in the industry. It’s fueled by common enthusiasm for the tools and an openness to share both positives and negatives, and to help each other.

“Moves to try and limit the ‘community’ to a Dassault-managed platform approach might be a concern, and that’s not necessarily the ‘modern’ way. Today’s ecosystems are significantly biased to openness, and their primary competition acknowledges that open communities, the likes of Github etc., have a large part to play when considering next steps in product design ecosystems,” Behrens added.

Indeed, this could be a limiting factor. On one hand, SOLIDWORKS users are extremely enthusiastic about their classic CAD tools as well as the simulation, PDM and MBD tools. Also, today's SOLIDWORKS ecosystem has a very wide range of apps with additional capabilities.

On the other hand, that ecosystem could be enough, leaving Charles's message insufficient to drive rapid change in a community with both feet firmly planted on the shop floor.

What is the 3DEXPERIENCE Platform?

So, the questions here are:

• What is Dassault Systèmes’ 3DEXPERIENCE platform?
• What are the main tools that connect it to SOLIDWORKS?
• And why are Bassi and Bernard Charles so eager to get the community’s users on board?

Charles generally refers to 3DEXPERIENCE as the “beyond PLM platform,” however I would characterize it more as a broad platform covering the major parts of what analysts such as CIMdata and Gartner define as existing product lifecycle management tools.

These tools include SOLIDWORKS as one of the apps. However, the most well-known apps are the PDM backbone ENOVIA, the CAD software CATIA, SIMULIA for advanced simulation, the visualization tool 3DVIA and NETVIBES, which gathers information from social media.

Generally, you will also find tools for IoT, Big Data analysis and cloud solutions, which makes constant connectivity and social media available and integrated.

Dassault Systèmes has created a number of bridges specifically for SOLIDWORKS, which makes it possible for these customers to utilize the 3DX platform:

• Conceptual Design and Industrial Design, which are solutions to develop, review, and select mechanical and stylized concepts before committing to detailed design and manufacturing.
• Xdesign and Xdrive. SOLIDWORKS Xdesign is a browser based, platform-independent application that includes modeling, design guidance, model based definition (MDB), and collaboration tools.

As opposed to SOLIDWORKS’ desktop solution – which is locked to only desktop computers running Windows – Xdesign can run in any modern browser and operating system. The software offers a lot of intelligence; however, the soft spot is that it employs Dassault Systèmes’ CGM kernel, making it incompatible with SOLIDWORKS’ Parasolid kernel (which is licensed from Siemens PLM). The comfort in this is that Dassault Systèmes asserts that the translation between Xdesign and SOLIDWORKS is nevertheless “best in class.”

Xdrive is the first component of Xdesign’s file management system, and is meant to be a bridge between desktop SOLIDWORKS and Xdesign.

Skepticism and Denny Bahl of the Chicago SOLIDWORKS User Group

For a few years now I have discussed these issues with the leader of SOLIDWORKS´ Chicago User Group, Innovative Plastics’ Denny Bahl.

Generally, Bahl’s views include a certain restrained skepticism toward 3DX, although he is fully aware that the need is growing, and that sooner or later the community is going to adopt the kind of social and cloud-based tools that the platform offers.

So far, Bahl isn’t so impressed with the first two “bridges” offered by SOLIDWORKS, Conceptual Design and Industrial Design. However, his “resistance” is lessening.

“True,” Bahl said, “I’m not as skeptical as last year. New collaboration tools like Xdesign created a lot of buzz in the community when it was presented. It turned loose more positive vibes in the audience compared to when they presented Mechanical Conceptual (renamed Conceptual Design) and Industrial Conceptual (renamed Industrial Design). They might have something going here that could get some legs and run.”

Does 3DX have a future?

“I think so,” said Bahl. “Especially in light of the popularity of tablets, on-the-go computing and mobile phones. Wherever you’re at, if you have access to internet and the Cloud, with Xdesign you can start collaborating and work on your design anywhere you want, on any tool you want. I think that has potential.”

For the moment, however, the number one priority is for SOLIDWORKS to remain a robust mechanical 3D CAD solution with ever-better performance. “Yes, the main two concerns of the community are still better performance and stability; a good quality software that doesn’t crash. As long as they keep concentrating on that, they will have customers for life,” Bahl said.

Changing Direction After Twenty Years of Success

Some 20-plus years after its debut, SOLIDWORKS may have the most loyal customers in the world. However, those who worked with it have done so for more than two decades. Changing tools and the way you work is hard, and breaking these learned patterns is a tough task.

Gian Paolo Bassi is respectful, however, and does his job with an elegantly formulated understanding of the SOLIDWORKS user’s attitude.

“Certainly, our users love their CAD software,” he said, “but they realize at the same time where technology development is going. Products are increasingly becoming ’smart’ and being equipped with increasing amounts of electronics, software and connections to the cloud through IoT solutions. Product development processes include not only advanced simulation, 3D printing and virtual and augmented reality, but are also about brand new ways of interacting in development work. Somewhere along the way it becomes obvious that you need a broad platform, and 3D EXPERIENCE is the answer.”

Business Transformation and Why Bassi Kept All Doors Open 

Bassi's reasoning is sound, but in the same breath he points out that, “We are careful and retain our old license model, while offering the opportunity to rent in the cloud to those who want it. We have seen how the cloud model can be taken unilaterally,” he said in a reference to Autodesk, which is in the midst of a shaky transition to the cloud subscription model.

But Bassi listened to the SOLIDWORKS community and acted accordingly. In a sense, he kept all doors open: Need a perpetual business model paired with maintenance? No problem. A rental model? Of course, we can provide a subscription for you. Cloud based SOLIDWORKS solutions? Right, we’ve got it.

Overall, this has turned out to be a great policy. Cautious? Yes, but in the longer run it’s beneficial for the customers and profitable for Dassault Systèmes.

The issue, however, is when will the community start to move over to 3DX capabilities to a greater extent?

“The manufacturing world is very conservative and what we provide right now with SOLIDWORKS is mission critical. This means that you don’t throw brand new platform technology at them and expect things to happen immediately. This is also related to the idea that ‘going platform’ implies business transformation. If you give a platform to a business that uses old workflows, a new technology doesn’t make any sense,” the SOLIDWORKS leader commented.

What Will Happen with the Business Model Tomorrow?

Many of SOLIDWORKS’ competitors are moving to subscription licensing models while SOLIDWORKS acts a bit more conservatively. There can be problems that occur when companies change models, specifically in terms of lower revenues.

Companies such as PTC and Autodesk have both experienced revenue dips when swapping models. SOLIDWORKS has been cautious in this respect, realizing that a number of customers want to preserve the on-premise and perpetual based license models, at least as it looks today.

Business is stronger than ever, in fact. But what will happen tomorrow?

“Good question,” said Bassi. “If you abruptly change your business model, drama may unfold like what is happening right now in our industry. And yes, we are very conservative because we listen to our customers.”

SOLIDWORKS can afford being conservative, according to Bassi: “Our business is performing very, very well and the majority of our customers are pleased with paying subscriptions in addition to perpetual licenses. They see the value in doing so.”

“Now, we were never in the position where other companies are: they saw their revenues flattening out and their revenue growth stalling because their perpetual model was not convincing or was not good enough to achieve higher growth. So, they said, ‘Now you customers have to pay me every year or every month, even if you don’t see the need for that.’  No wonder some companies may stumble, if this is the value proposition to their customers. So, first of all – we can afford going perpetual. You may have seen Bernard’s statement for our latest fiscal year that a large percentage of our revenues comes from subscription business. We just didn’t need to put in place such a dramatic change to achieve growth.”

So, what about the rental model?

“We thought about that and said, yes. Why not create a situation where anybody can rent SOLIDWORKS? And that’s what we did. Today, we have both options and actually it has been highly appreciated by the customers.”

He added that while many people have taken advantage of the rental model, it has not cannibalized SOLIDWORKS’ perpetual model. This is proved by the fact that SOLIDWORKS this year broke its revenue record on new seats sold on the perpetual model.

“Of course, this is possible when the resources where all the computation and design activity takes place are on the customers’ premises. If you use resources that are supported by us, you need to change the conversation. It’s like when you use your phone: you have to pay a monthly subscription to use it because you utilize a huge infrastructure that is maintained by the telephone company. So, when we offer products that run into the cloud, we need to charge subscriptions to make it sustainable. But for our line of products that are perpetual and run on premises at our customers’ infrastructure, the perpetual opportunity will be there as long as the market needs it.”

A Clear IoT Strategy

“For IoT, our strategy is very clear,” Bassi explained. “The world of IoT consists of two fundamental areas. One is the design and simulation of connected objects. It’s an extremely delicate part of the process because you cannot make mistakes. When you connect millions of connected parts you need to make sure that their tenets are in the right position, have the right dimensions, and that the conductors are at certain distances from the cases, not to end up in flames. And we are focused on this phase, the design phase. We have a formidable list of tools that can help to create the best-connected objects.”

In addition to that, Bassi points to Dassault Systèmes’ acquisition of a company called CST. They are specialists in electromagnetic field simulation, which is extremely important to precisely design connected objects.

“This is the first field of work if you want to create connected objects,” said Bassi. “So, for prototyping it, building it and designing it we have a partner called Nanodimension, which has solutions that make it possible to 3D-print industry production grade PCBs. The result is that in one day you can design and prototype your connected object, all due to the type of ecosystem with innovative solutions that we have.”

“All together, we’re talking about high-level complexities, and I truly believe that a Dassault Systèmes-level solution is needed to handle it. We (SOLIDWORKS), on the other hand, want to stay focused on the design side.”

What about AR and VR, or as we say nowadays, Mixed Reality (MR)?

“Our philosophy is very simple: Plug & Play. We are working to achieve this with older companies that you can see in this area right now, whether it is Hololens, or Meta or any of the other existing players. We are aiming to partner with all of them, understand what their needs are to put any asset created in SOLIDWORKS into these developer’s solutions. We are moving in a good direction here, and I think that by the end of the year we will support this class of devices.”

Cost of Mixed Reality is Going Down Dramatically

Bassi noted that SOLIDWORKS sees an acceleration in the adoption of these devices because among other things, the cost is going dramatically down. The era of expensive virtual reality caves is gone, and everything has become portable.

“I believe that augmented will be preferred to virtual, because it is easier–especially to the brain; you won’t get dizzy–and you also get less extracted from reality,” asserted Bassi. “Some of these devices can be addictive. I have played with these devices myself and after a while you say, ‘Okay, this is my world, this is what I’m doing,’ and then you forget that you are in a different room, that you are somewhere else.”  

“I also see, especially for marketing, these new devices like Meta or Hololens will allow people to keep eye contact. You’re not in a different world, but in the same world, just augmented,” he added.

Transition Will Happen – The Only Question is When

“SOLIDWORKS is ready, as is the community,” said Bassi.

They’re on the threshold of entering the new platform-based product realization world - the only question is when.

Bassi asserted that the discussions with the SOLIDWORKS community about the future have started.

“This is a good first step, but after 20-plus years of mechanical and electrical desktop-based 3D CAD, conservatism is prolonging the period of change,” claimed analyst Peter Bilello in today’s TV report.

Other issues that contribute to the length of the transition period are of a more technical nature. Compatibility is one of these factors, and the Xdesign bridge to the 3DX platform is an example of this.

This functionally very promising solution has the flaw that it is built on the 3DEXPERIENCE’s CGM kernel technology. Since SOLIDWORKS uses Siemens PLM’s Parasolid kernel, data must be translated to run effectively on 3DX. This need not necessarily be a big problem; however, the creation of translation algorithms takes time to develop. And even if it is a “best in class” translation tool, it will still take years to have it in place. Once again, the issue is related to time.

Another technical problem was pointed out by CAD journalist Ralph Grabowsky, who last year wrote: “…Xdesign uses Dassault’s ENOVIA database to store design files as data – referred to as ‘zero files’ – which is not at all the same as SOLIDWORKS using individual files storing sketches, parts and assemblies. The idea behind zero files is that everything is stored in a single database file. From that database, parts are available Internet-wide, can be searched for more easily, data extracted more accurately and so on. However, the issue that doesn’t get discussed by Dassault is that, by storing models in its proprietary database, the company makes it extremely difficult for competitors to access them for translation.”

In summary, all these problems are possible to solve, and my qualified guess is that Gian Paolo Bassi is the right person to do it, in combination with Dassault Systèmes’ extensive resources and SOLIDWORKS ecosystem.

My take is that when Bassi used the term “SOLIDWORKS Innovation platform” rather than “3DEXPERIENCE platform” during last year’s SOLIDWORKS World, he made a more psychologically attractive statement about the future.

Generally, SOLIDWORKS’ next-generation strategy is still somewhat in the making as they wrestle with the fact that the installed base isn’t yet particularly keen to move to new Cloud solutions from local code. Added to this, a change to Cloud-based pricing models and reseller and direct sales compensation structures might be somewhat challenging.

“The question is when and how attractive and easy they make it for their base, and how performant and differentiable for new clients,” says Taxals analyst, Allan Behrens. He continued, “They also have to make sure that their sales engine (read channel, in SOLIDWORKS’ case) maintains or extends sales coverage and remains profitable during and after any transition. Having said this, SOLIDWORKS (read Dassault), wants their base to be amongst the first movers to anything new from themselves, and they’re keen to brand all of these new ‘Experience-based’ products as ‘SOLIDWORKS’ — not surprising with such definitive branding.”   

Finally, the good news for Gian Paolo Bassi is that he’s not alone. A lot of the responsibility falls on the full SOLIDWORKS’ organization, resellers included, and how they can spread the message to the world’s largest CAD community. They are the true believers; just listen to what Kishore Boyalakuntla has to say in today’s PLM TV News.