When Dassault Systèmes’ Bernard Charles—known both for his visionary thinking and for being one of the first to develop a PLM concept—bought the robot programming software Deneb in 1997, I asked him a question.

"Why would you, someone who works with CAx and product development solutions such as CATIA (CAD), PDM, simulation programs and similar, buy a robotics software solution?"

“I do not primarily buy a robot management program,” Charles replied. “I am buying an important component for a broad platform for product development.”

I recalled this interesting answer in connection with last week's announcement that global tool manufacturer Sandvik is buying CNC Software and its CAM solution, Mastercam. Mastercam has about 270,000 users, mainly among small and medium-sized enterprises (SMEs). This makes Mastercam the world's largest CAM software, PLM suite-bundled software such as Siemens Xcelerator (NX CAM) and Dassault Systèmes 3DEXPERIENCE (DELMIA CAM) included.

But why would Sandvik want to have its own CAM software? The company, which mainly develops and manufactures metal-cutting tools, materials technology and related services, delivers its products and services to everyone who needs it, regardless of what program they have.

In Line with A Strategy for Broader Coverage

An important part of the answer is about building a future in the manufacturing area—a future that will be characterized by concepts such as Industry 4.0 and Industrial IoT (IIoT). These represent exactly what Bernard Charles talked about back in 1997: seamlessly connected, modularly built platforms for product development. But unlike the ambitions that Charles and Dassault Systèmes often tended to show, the future is about non-monolithic, open solutions. Competitive platforms must be modular, where new or updated and compatible pieces for specific domains can be easily replaced or added.

In today's often highly diversified product development landscapes, nothing stands on its own. Efficient product development and manufacturing processes require complete, well-connected solutions. This is also one of the important effects envisioned by Sandvik's CEO and president, Stefan Widing.

“This acquisition is in line with our strategic focus to grow in the digital manufacturing space, with special attention on industrial software close to component manufacturing. CAM plays a vital role in the digital manufacturing process, enabling new and innovative solutions in automated design for manufacturing,” he says.

In short, Widing is not just buying the world's largest CAM solution. He is also acquiring a component for a more comprehensive whole. But precisely how does this work?

The Days When CAM Was a Domain On Its Own are Over

According to CIMdata, PLM can be considered as a superior umbrella for a collection of interconnected solutions. These are also divided into sub-areas such as cPDm, CAD, CAE, CAM and so on. Previously, these sub-areas were regarded as almost individual domains in product development, with functions that mainly came to be connected to each other in a way that made it possible to create smoother chains of product realization processes with the development of the PLM concept.

Today, the clear picture of where PLM is aiming illustrates how these connections between programs have been developed into cohesive platforms that can also—to an increasing extent—link the previously “silofied” product development and manufacturing chains.

We are still far from that ideal, but the direction of the journey is obvious: things, software and processes must be interconnected in order for the efficiency of the product realization chains to reach the level of maturity needed to remain competitive.

When CAM and programming of toolpaths in cutting machining, simulation and other processes was once was a domain of its own, the matter was crystal clear: CAM was its own, almost independent domain.

Today this is no longer the case. CAM has been tied ever closer to the whole PLM concept as a naturally connected piece, so that in the next step it will be possible to create a value chain where everything within PLM and manufacturing automation is connected. The business deals, purchases and sales of various companies within the CAM sphere that we have seen in recent years, and will continue to see going forward, are all expressions of this development. 

So, what about Sandvik in this context?

Sandvik works primarily in areas such as cutting, turning, drilling and related services. The purchase of Mastercam puts Sandvik’s finger squarely on the exciting developments that today characterize all industrial manufacturing activities.

What we see happening at a historically dramatic pace is no longer merely a matter of superficial evolutionary changes, but instead can be likened to the often-misused concept of "revolution." How might this affect an industry such as CAM and CNC?

The Ideal Example: Where the 3D Model “Itself” Can Tell How It Wants to be Manufactured

Let’s look at an example.

Imagine that the development team is done with product development, and they can only "shoot" a digital twin—a 3D model of the developed product—into another digital twin of not only the production line, but also of the individual machines on the line that will perform the manufacturing work.

Imagine that you can use the digital twin of the product created in such a way that the product "itself," based on the product development work, can tell exactly what the toolpaths should look like, which CNC machine to use, how and with which material a future product should flow through the production line. Everything seamless, automated and with a minimum of manual effort.

This is what today’s proactive PLM leaders in smart manufacturing envision, including Siemens Digital Industries’ CEO, Tony Hemmelgarn, and PTC’s Jim Heppelmann, along with PTC’s automation partner’s CEOs, Rockwell’s Blake Moret, and Ola Rollén at Hexagon.

Furthermore, it is a vision for the future embraced by Sandvik CEO Stefan Widing and his coworkers, among them Mathias Johansson, president of the Design & Planning Automation division in Sandvik Manufacturing Solutions. What they have in mind is to use Mastercam as a basis for which tools and modular functionality and service packages they want to offer the industrial market.

“Mastercam will be the cornerstone in Sandvik’s CAM portfolio, further improving machining productivity by combining our machining know-how with their CAM expertise to improve quality and reduce waste for our customers. Specifically, we will leverage data capture and use it to secure efficient tool selection and tool path optimization for our customers,” Johansson commented last week’s surprising announcement.

Mastercam and Its Competitive Landscape

What does the market situation for CAM look like today? It is clear that Sandvik is embarking on a tough journey. During the pandemic year 2020, the non-platform-bundled CAM players experienced declines in revenues. The CAM market decreased by just over 7 percent according to CIMdata, who also note that CAM is often hit hard in economic downturns.

Another effect for subtractive technologies which is probably not entirely insignificant is, that additive manufacturing and 3D printing are developing rapidly and in several places are replacing or have the potential to replace subtractive manufacturing methods altogether—especially in the case of short series of complex products.

However, the future for CAM generally looks good, according to analyst IndustryARC.

“The CAM software market size is forecast to reach $3.3 billion by 2026, at a CAGR of 6.5 percent during 2021-2026,” they write in a recent report. They additionally state that, “North America held the largest market share of 30.7 percent in 2020 from the overall global CAM software market. Growth in this region is attributed to the ever-increasing demand from various industry verticals including manufacturing, automotive, aerospace and defense and others. Moreover, this region is witnessing a significant growth of around 5.89 percent during the forecast period of 2021 – 2026.” IndustryARC also concludes that the surge in demand for CAM software to facilitate and automate manufacturing processes will significantly boost the market growth.

The analyst adds that enterprises are adopting SaaS to enable redeployment of their software tools and data.

To provide a general picture of what the market looks like, it should first be noted that when it comes to CAM, NC and CNC related revenues, we are discussing competing companies that in addition to the CNC Software’s Mastercam which Sandvik has now bought, includes the companies mentioned below. This list was recently changed dramatically by Sandvik, which in July of this year bought the investment company Battery's CAM holdings, which were organized within the framework of the formation of a new company, Cambrio, since the beginning of 2021. This deal included Cimatron and Gibbs CAM. Clearly, Widing and his company are on the move to build up a substantial and strong software arsenal.

Here’s how it looks in terms of main non-bundled competitors:

• Delcam (owned by Autodesk)
• Vero Software, including for example the mainstream software Edgecam (Hexagon)
• Spring Technologies (Hexagon)
• DP Technology (Hexagon)
• NDES

A Fragmented Market with Hard Competition

These companies are focused on the CAM programming market where CAM is used to generate the NC/CNC code, simulate, etc. and where the CNC machines perform the machining. The market is also a fragmented arena where competition is fierce. Apart from perhaps Mastercam, there is not a single supplier that dominates the global CAM market.

CIMdata claims in its reports that on a global basis there are close to a hundred suppliers that provide CAM software. However, based on just this fragmentation, the large number of suppliers and the lack of a dominant market leader, there is room to do a lot to consolidate the market, which according to CIMdata's calculations was worth about $1.5 billion dollars globally in 2020, a bit lower than the value that IndustryARC estimated in its recent report. The latter difference is probably related to the fact that they include PLM-bundled CAM solutions in their numbers, which CIMdata reports under another heading.

Companies such as Vero, which has been a particularly active CAM market player, was acquired by Hexagon in 2014 and is a cornerstone of Hexagon’s arsenal, where the company and its subsidiaries are part of the Manufacturing Intelligence division. Hexagon about doubled its CAM side in 2018 with the acquisition of Spring Technologies, well known especially in the CAM simulation area, and the purchase of DP Technology 2020. Among the results or these acquisitions in the Hexagon division is the well-known mainstream software Edgecam.

Other major movements in the CAM arena in recent years include the investment company Battery Ventures' acquisition of the companies Cimatron and GibbsCAM in 2020—which in turn, as mentioned above, was bought by Sandvik in July 2021.

The Future of The Cam Market

Looking to the future, what does it look like for the CAM side? It is clear that we will see great changes.

Today, as CIMdata writes in its report, perhaps the foremost point of CAM software is "to improve user productivity by providing software that is easier to learn and use, more automated and more tightly integrated with design software."

This includes:

• Support for sharpened easy-to-use user interfaces.
• Specific industry-oriented application solutions for areas such as turning, milling and general cutting material processing.
• Support for high-speed machining and CNC.
• Support for function recognition and function-based processing.
• Programming on the workshop floor.
• Increased integration of CAM software with design and other factory floor solutions.

Exciting Development

Having said this about the current situation, the future of the area looks very exciting and dramatic.

In the name of digitalization, much of what was previously handled manually and by specialists will be taken over by intelligent IT solutions, where artificial intelligence has been built into the programs and where the trend is moving towards deeply integrated functional chains roughly according to the lines I described above in the article. The barriers between product development departments and manufacturing on workshop floors have long been seen as—and often have been—an obstacle to efficient processes.

Today, these barriers are about to be torn down, or at least to fade away, in favor of coherent processes, with digital data that can be read by more than one solution, and which can be transformed and simulated. At the ideal level, design data can be inserted directly from product development—which during the development journey is provided with manufacturing data on how and with what something is to be manufactured—into an automated and digitally controlled production apparatus, where the different process areas hook into each other in a modular way, without manually routed transmissions.

Digital Twins in Focus

This new holistic process has often been sorted under the Industry 4.0 concept, smart manufacturing or IIoT (Industrial IoT) and today points straight into the future and a main track in this is the digital twin.

This is because it is far from something that should only be used in product development work. On the contrary, digital twins should be used throughout the chain. In addition, the "product twin" must be surrounded by other digital twins throughout the journey through the product chain's value chain. But not just there; even on the aftermarket side, it will keep up —all in order to save time, "time-to-market," money, contribute to sharpened product quality and streamline the use of the product in the hands of the end customer.

This provides exciting perspectives on, for example, CAM work. At its ideal level and a little roughly, one should then be able to control and manage the entire product development chain via software in a few keystrokes, which not only plans toolpaths for a metal piece to be processed into a product, but also plans, simulates and implements tool requirements, installations and tool changes.

A Tough Journey for Stefan Widing and His Employees

How this will be implemented within the framework of what Sandvik will now be able to handle via CNC Software, Mastercam and the solutions and services it already has in the arsenal remains to be seen. The challenge will be to create complete packages that are modular, combinable, compatible in diversified industrial landscapes, and which can become part of what builds up various Industry 4.0 concepts. There is no doubt this is a tough job for Stefan Widing and his employees.

It is in production that product quality—no matter what material you use—and the pursuit of doing the right thing from the start have the highest priority.

All this in turn requires sharp software adapted to the specific tasks that the product requires. But not just as individually sharp units; rather, it is the case that real efficiency is determined in the capabilities of the different software that connect to each other and "talk to each other."

In short, a chain in the manufacturing process is no stronger than its weakest link.

Sandvik can succeed in this, and a Sandvik with ever-broader digitally built solutions and services will become an extremely strong player in the complex manufacturing market, which is now taking shape step-by-step in the journey towards Industry 4.0-based manufacturing arrangements.

Moreover, it does not hurt commercially that with Mastercam, Sandvik gets a customer base of 270,000 users in the system. CNC Software is a family-owned company founded in 1983, and is headquartered in Tolland, Connecticut, USA, with 220 employees. The revenue for 2020 totaled $60 million with an EBIT margin of 25-30 percent, and of which the share of recurring revenue was approximately 60 percent.