DEVELOP3D - Technology for the product lifecycle

Last throes of a dying company?

Makes me wonder if Alibre can license the Spatial ACIS kernel, all the D-Cubed stuff and no doubt others, develop the application and sell it for $99 and make money (that is the BIG question) how much are the other CAD companies that use ACIS creaming off as a margin?

This is not a new thing anyway. Punch Software when they bought Cadsoft Solutions developed ViaCad and sold that for even less (I think it was $79). This could do even more than Alibre Design (in pure modelling terms). Thing is, ViaCad is hardly a household name even 4 years on. But then they are still in business as well.

Personally I would think it is unsustainable. If Alibre were to ever start to encroach on SolidWorks territory (which in my opinion they are a very long way away from), Dassault will simply pull the plug on the Spatial license terms.

Hey Kevin

I think there’s a common misconception that developing a 3D design tool is just licensing the kernel and you’re good to go - it’s nowhere near that simple.. The kernels offer the algorithms that allow you to build the geometry and perform specific functions, there’s a huge amount of work that goes in on top of that, so it’s not the question of creaming much off as margin in terms of development efforts. And contractually speaking, it would be very hard for Dassault to “pull’ the spatial license - of course, it depends on the contract and the specific terms.

The 99 dollar deal was an interesting exercise in lead generation - personally I think they’re mad to formalise this if it’s true - one thing that came out of that promotion was a pretty aggressive sales team following up those leads. And we all know why that’s a bad idea. Follow up a lead, that’s business, but I’ve heard multiple reports of constant streams of phone calls once people have taken up the offer. But if you combine that with a business built on top of a low-cost product that reserves, you’ll soon find out the net result. Pissed off customers, not spending much.

Let’s see what happens eh?
Al

What a lame “fundamental question”.

Maybe a little review of http://en.wikipedia.org/wiki/Supply_and_demand is in order ?

This type of insightful journalism puts your whole site’s objectivism in question.

- John

John,

It’s not meant to be objective - it’s meant to make people think. To question why Alibre are potentially doing this. Should they invest, even if it’s just $99, in a product that, by reducing the price to $99, has very little chance (in my opinion) of remaining sustainable. is short term gain or reduction in investment, better than long term gain and additional expense. It’s my opinion that the latter is better.

Many may disagree with that and I would love to be proved wrong. Alibre is a highly capable system for doing what it does. It’s functionally rich and pretty easy to use. But reducing the price to this level requires a very high volume of sales for the business to be sustainable. Developing this type of product is a costly business and in my opinion, the numbers don’t stack up.

Yeah. It’s my opinion. Objective? Probably not. But it’s honest and based on my experience in this industry.

Al

Al I realise developing CAD software is not just about plugging into a kernel but I’m just very curious to know how much return the likes of Spatial get from Alibre vs other CAD companies. If you recall Alibre had a free product for a while. Personally I think the license to Alibre must be based on volume - otherwise what is in it for Spatial and Siemens?

My point is then, once that volume starts to chip away at the Dassault crown jewels what then? Speaking personally I have recommended Alibre to many people over the years and many have gone ahead and purchased it. It does have a market, and it is squarely aimed at the convertors from 2D systems who want to go 3D. But they keep on plugging away about price and how it compares to the mainstream apps. Well it doesn’t. Treat it for what it is, sell it for what it is and great.

But it is not a SolidWorks, a Pro/E or an Inventor. If Pro/E or SolidWorks goes down, they will be bought out and continued to be developed - the user base is worth too much. If Alibre goes down, who is going to take on a low margin offering in the CAD business?

At the end of the day, the cost of a CAD system is a relatively small part of a business overhead even for a one man band (I am of course talking about mid range here not enterprise stuff!). The problem Alibre have is that they sell for $99, then expect people to upgrade to Expert and so on. Well what if they don’t want to? What if they use Alibre as a starter CAD to a more capable system? That is exactly what everybody I know who has purchased Alibre Design has done. Within 2-3 years they have moved onto something else because they need the extra power and speed those other systems offer. Maybe THAT is actually what Spatial et all are doing?

Our ViaCAD products have been sustainable and profitable for Punch since the initial release in 2007.  Not only is it less than $100, boxed versions include a printed manual, free service packs & phone support, and upgrades to the next major release for $20. 

For those unfamiliar with ViaCAD, below is a link to the original product release with a brief overview.

http://www.punchsoftware.com/releases/ViaCad_release.html

In our case we are fortunate to leverage our experience and distribution channel with value software from our Home Design market back into the CAD market.  In particular, the distribution channel provides us with an opportunity to introduce precision CAD to first time CAD users through US retail outlets such as OfficeMax, OfficeDepot, Frys, Apple, and Staples.

>>I think there’s a common misconception that developing a 3D design tool
>> is just licensing the kernel and you’re good to go - it’s nowhere near that simple..

Yup.  I’ve had the opportunity to create a precision CAD system with and without component technology.  Our time to market with component technology is certainly quicker and your team size can be smaller, but there is still significant development in putting it all together into a unique package.

Have to admit I am a bit confused after reading Kevin’s post..who is Alibre’s market? Is it the guy that is migrating from 2d to 3d and needs a cheap alternative to learn or is it a person who can be satisfied with Alibre for at least the foreseeable future? I think upgrading to the Expert is an essential path.

If you are going to waste time spending time and energy to learn 3d on a $99 product with the thoughts of pitching it once you are proficient and buy a more capable modeler, I’d say you are wasting your company’s $99. If you want to do it on your own time, at home- that’s on you, probably worth the $99. My point is, don’t be fooled to go on the cheap, it is rarely the right idea.

The bigger question is - does Alibre have the game to sustain a reasonable place in the MCAD market to get folks to purchase upgrades/extra modules? If not, can’t imagine there are enough $99 people around to sustain life for too long.

Can’t say I have all the answers, but I know a good question.. who is the alibre market? Answer that and then get the economists on it to survey the size of the market to tell you if its priced correctly.

Nice to here you again Tim. I think that is the critical difference. Punch started as a consumer/retail company so have an extensive retail distribution set up. ViaCad at $99 (or so) plugs straight into that set up and has the double benefit of being Mac and PC.

Alibre is Windows only and is not a retail product but is sold via resellers outside the USA. I’ve worked with enough CAD resellers to know that they are not going to be overjoyed about selling a product for £89 (Uk pricing) unless it really can sell itself. Its a tough tough sell. If they pull it off well done.