New year, New CEO at SolidWorks

Yesterday got 2011 off to a brand new start with an announcement coming out from the Dassault Systèmes (DS) + SolidWorks camp that a pretty big reshuffle was happening within the leadership in the SolidWorks business unit.

Jeff Ray, who served as COO (Chief Operating Officer) from 2003 and taking the CEO’s helm in 2007, is to move to the Dassault Systèmes headquarters in Velizy into the newly created role of Executive Vice President, Geographic Operations for Dassault Systèmes , where he’ll “oversee the company’s geographies in order to empower the Dassault Systèmes local teams to serve customers’ and partners’ growing needs and fully exploit the market growth potential.” Ray, as you’ll discover will also become a member of Dassault Systèmes executive committee.

Replacing Ray and taking the CEO’s seat will be long serving Bertrand Sicot. Sicot joined DS in 1997 heading up regional sales of SolidWorks in Europe. From 2004 to 2007, Sicot then headed up SolidWorks’ US operations and since has been leading the sales channel globally for the company.

I got a chance to catch up with both Jeff and Bertrand on the day of the announcement:

Al Dean: Morning gents, give us your angle on today’s announcement.

Jeff Ray: I think what’s in the press release is pretty much straightforward. In my discussions with Bernard [Charles, CEO of Dassault Systèmes] this is something we’ve been working on for the better part of a year. He wants to see this business continue to grow, he wants to bring 3D technologies to a broader marketplace than the market we’re in today. And he wants to make sure there are no barriers to that growth inside our business, in dealing with our resellers and our salespeople, and most importantly, in dealings with our customers. This is something both he and I feel very strongly about, we’ve always shared that belief, and that aspiration. This culminated in a discussion he and I had about a month ago that this was the time to do something. We wanted to finish the year without distracting the business with this news. It also gave us time and the ability to be very careful and thoughtful about what we wanted to say and how we wanted to say it. At the same time we didn’t want to wait; the beginning of the year is a clean time to make that change.

The other key thing here is a very smooth transition in leadership for SolidWorks. Bertrand can speak for himself, but he’s someone who I’ve gotten to know over the past 7 or 8 years and I trust and respect him completely. Our relationship goes back to when I first offered him the job to come and run sales for North America – he packed up his family and moved here. We like to call him “the American with a French accent.” He personifies the SolidWorks culture, he has a profound amount of respect and trust from the VARs from around the world, and he’s been running sales worldwide for the past few years. And, he has the trust and respect of the leadership and the employees of SolidWorks, so this was a very easy decision to make.

So, a smooth transition, much going on at SolidWorks, a big step in DS’s goal to continue to grow and expand it’s presence in the world and we’ll share much more at SolidWorks World in a few weeks.

Al Dean: How much was having SolidWorks World coming up in a couple of weeks time part of the decision to do this now?

Jeff Ray: Good question. We did not want SolidWorks World to be about a change in leadership. SolidWorks World has always been a celebration of customers and what they do and we felt it was important to get it out as soon as we could so that the noise can die down and get back to business as usual and make sure that SolidWorks World continues to be about customers and not SolidWorks.

Al Dean: So, Bertrand, obviously there are a lot of changes at present both within SolidWorks product strategy and then there’s the ramping up Dassault’s direct sales channel, there’s the SolidWorks VAR channel and I just wondered if you had any thoughts on how you see things moving forward.

Bertrand Sicot: You mentioned two things, product and channel. For the SolidWorks channel, which we call at Dassault Systèmes, the “Professional Channel,” is everywhere around the world with 350 resellers. These VARs are selling the entire SolidWorks product portfolio, and it’s working extremely well. As you may be aware, three years ago, we asked this channel to sell a Dassault Systèmes product, which is 3DVIA Composer. That product is clearly appealing to our customer base and it’s a success, so the channel is working very well and there are no plans to change it. This is a growing year, the sales machine is in place and we have really great VAR owners that understand and continue to invest in our current business..

For the product, you know already what we are working on. What I would say is that even though I’m French I don’t believe in a revolution, because sometimes you lose your head. I believe in evolution, so that’s how we will continue to work at SolidWorks. When I started at the company in 1997, over 14 years ago, we had a strong vision and now in 2011 that vision has to continue to adapt and evolve to meet customers changing needs. We will continue to work on revising our vision and focus heavily on our customers’ desire to innovate and design amazing products.

Al Dean: If you take a step back and take a look at how both the business and the products are progressing, there’s a merging of what were previously two separate business units, do you think there’s potential there for the VAR channel to resell other Dassault products? While obviously not Catia (although there’s huge potential there), but the likes of Delmia and Simulia. Is that flagging up on your plans?

Bertrand Sicot: What really matters is what the customers need. 3DVIA Composer sales in the SolidWorks channel is clearly a test to see if Dassault Systèmes technology can be sold by the SolidWorks channel and it’s doing very well. It’s clearly saying that as long as we have and offer what is suitable for serving the market we’re in, the channel can do it. The emphasis is on providing solutions that our customers truly need to impact their businesses.

Let’s be clear, there’s no plan to have Catia sold by the Professional [SolidWorks] channel.

Al Dean: Another question relating to this is that there’re obviously business partners or resellers in the Catia sales channel. Do you see the potential for that to work back the other way and sell SolidWorks products?

Bertrand Sicot: There are really three channels at DS and each has its own exclusivity. If you look at BPs, they are selling PLM to the large companies, the large enterprises. Value Selling is selling PLM in a box with configurations. What we do at SolidWorks is totally different. If you think about it, Dassault Systèmes is unique in the market place in terms of coverage for that kind of sales activity. There are no plans to change that approach because it’s working extremely well and our position in the market is outstanding.

Al Dean: What about direct sales of SolidWorks direct from Dassault, to the larger multination customers? Is that something that you see growing and that you’re going to flesh out over the coming years or is it pretty much going to be how it is at the moment?

Bertrand Sicot: We have some very large customers and clearly, we are 100% dedicated to indirect sales . We have a team dedicated to large accounts supporting our resellers when needed for large, international customers and enterprises. What this means is that we are dedicated to helping the local resellers interact with global customers. We work with the resellers together to help customers be successful, but it cannot be considered a “direct” sales model.

Al Dean: Anything else you’d like to get out there to your user community that we haven’t covered already?

Jeff Ray: If there’s one word that I’d like to get out, it’s growth. We are absolutely committed to growing our business, our business being the community of SolidWorks users and the DS community. We think this is a key step in making this happen.

Al Dean: Final question about the new job at Dassault?

Jeff Ray: I haven’t screwed anything up yet?

Al Dean: There’s always time captain, it’s only Wednesday.

Jeff Ray: There’s plenty of time. For me personally, there’s the opportunity for my wife and I and our dog Jack to move to Paris for a year, that’s pretty cool and not a lot of people get that chance. It’s exciting because not a lot of people get the opportunity to participate in a 2 billion dollar global business that’s very viable and healthy and work for a leader who’s constantly reinventing himself, the company, the technology, everything. It’s exhilarating. There are so many companies, and you’ve seen your share of them over the years, that become very smug with the technologies that they’ve put out there and they don’t have the courage to disrupt that and just ride that technology into the ground. When they do that, innocent people, most noticeably employees, get hurt, because they get laid off. And customers get hurt because when the vendors fail to refresh and rebuild/reinvent technologies, the customers suffer. So, it’s exciting to be part of a culture that is committed to customers. Albeit, I am an American and this is the first time that an American, and some might say, an outsider, is being brought into the leadership team. The structure in DS is built around a core team that makes up the EXCOMM, or the Executive Committee. Bernard is a good sport and he and I were joking about the fact that the EXCOMM meetings now need to be conducted in English. Out of reverence to you, my friend, in improper American English.

It’s all about a smooth transition, about a logical next step, it’s about taking steps to make things happen, rather than waiting for things to happen. It’s also an affirmation of our product strategy. We stood on stage last year at SolidWorks World and made a strong commitment to online technology that’s built on the V6 platform. That’s viable and exciting and it’s moving along quickly. I’ll continue to play a role in that, albeit from France, so it’s an affirmation that the technologies we’re presenting today will continue to refresh and continue to be out there for a long, long time.

What’s really cool is that when we do start shipping the online technologies in a couple of years, customers will have choices. They’ve never had choices before, it’s only been one flavour of CAD. Now, we’re going to do something that not many companies can do, which is give customers choices.

Al Dean: As you brought it up, let’s talk about that a little bit. When you showed the next generation platform last year, the reaction from the user community was odd, or rather from some very vocal parts of the user community. Do you think that you showed it too early or do you think that was about right?

Jeff Ray:Time will tell, there was a raging debate in the company about not showing anything. In the end, my request was that we show it because I felt we owed it to our customers to give them some sense of long term direction and we’d never done that before. Everyday, customers and prospects have to go to their boss and say “I want to spend money and invest in these technologies that are good for today and good for many, many years to come.” We felt we owed it to them to give them some semblance of a road map so they don’t have to worry about how their subscription money is being spent, that it’s being spent on fresh, new technology every year in the existing version – and we’re making long term bets on future platforms.

When Jon Hirschtick started SolidWorks, he didn’t start it to be a Windows company, he started it to make sure that every engineer on the planet would have really cool design technology. It just so happened that at that point in time, Windows was the liberating platform. Jon’s very excited about what’s going on in this business and he sees online technologies as even more liberating than what he could provide with the Windows platform. It’s not a case of either/or, it’s a case of choices that customers can make now. I feel strongly that we owe it to our customer to give them some insight into what we’re doing and I trust our users that they could handle it, that it wouldn’t send them spinning and it didn’t. Our business is profoundly healthy and if we had sent them spinning our business would reflect that sentiment.

I also did it to set a fire on one end of the bridge. I wanted to completely and wholly commit to these initiatives and I didn’t want anyone second guessing or being uncomfortable with what we’re doing, as well as make a strong public statement. Some of my friends in R&D have told me I set fire to both ends of the bridge, but time will tell. For me, there are no regrets.

Al Dean: For me, it always looked like a smart move. It’s one of the thing thats Dassault has always been good at, setting stock, saying “Look, this is where we’re shooting for.” The thing I like most is that they set that goal one hell of a lot further than everyone else, it’s not two years, it’s not five years, it’s 10 or 20 years out. To me, that’s impressive and to be frank, you have to have balls to stand up and do that. Whether it comes off or not is neither here nor there for the most part, but the fact that they can make that call, try and predict where things are heading. And share it. This isn’t done in a boardroom, this is done on a stage with customers and to say where they’re shooting for is an admirable thing.

Jeff Ray: I think it’s in the SolidWorks DNA. It’s very easy to attack the superficial and drill down into the technology and features. The people who do that miss the point, It’s about the deeper motivation. The deeper motivation is that we have incredible respect for our users and we want to continue to give them cool, new technologies that make it easier for them to do their jobs.

A few thoughts

So, what do we make of this announcement? My personal opinion, and I’m sure one which isn’t shared by some, is that it’s further evidence of the merging of two of the most distinct and historically separate parts of the Dassault Systèmes empire. On the product front, as we discussed at the time, the next generation of SolidWorks is being developed on the V6 platform, something which is already highly web-enabled in its approach. In fact, and rather unluckily for us, we just published the latest issue of DEVELOP3D in which Martyn Day talked to Jeff Ray about just those plans in some greater detail.

But alongside the product strategy, there’s the business strategy in general. Let’s be frank, selling Catia, Enovia, Delmia, or it all wrapped up in the form of DS’s PLM suite, isn’t an easy business, one that takes huge resources in terms of expertise and time in terms of the sale cycle. This is rather different to SolidWorks’ sales approach, which tends (but is by no means restricted to) focus on the smaller, less complex organisations (note: not less complex products). That’s why Dassault’s three pronged channel seems to be a sensible approach and why Bertrand is wise to avoid with messing with it too much.

Yes, there’s a grey area where customers could be suitable for Catia, for PLM and all that it entails, who are currently using SolidWorks and associated tools. Just as I’m sure there are many Catia users who could get the job done just as efficiently with SolidWorks. What matters is that the customer has a choice. At present, today and for a while yet, that choice is split between two very distinct and different application sets. That’s not always going to be the case. While in our interview with Ray, he was admant that SolidWorks V6 or whatever it’s going to be called, isn’t a Catia Light, the fact is that very soon (sooner, I suspect than many expect) we’ll see the same platform being used for both Catia V6 and SolidWorks V6. The user interface will differ, the packaging/bundling will differ and the price points will differ as well – just as the sales approaches and the route to market will differ too.

To my mind, as I said 12 months ago, this is undoubtedly a good thing for customers and prospects alike. Scary yes, for those with huge investments (I’m thinking skills and time, rather than hard cash) in the existing system. What’s interesting is that the company seems to be aligning its organisational matters (read: Sales) to support the consolidation nicely.