SDRC Sees Opportunity in Enterprise-Wide Use of Product Development Software

Strategic Insights -

Bill Weyand, chairman, CEO, and president of Ohio-based SDRC, believes the company is well-positioned to capitalize on the emerging trend of enterprise-wide use of product development software. According to Weyand, companies are no longer purchasing software for specific functions, but rather for solutions that improve the product development process, quality, and cycle time. This shift in focus is driving the use of design automation tools, with information and data management becoming the primary growth area.

Key Takeaways:

  • SDRC's flagship mechanical design automation software, I-deas, is still a key product, but the company is focusing on its Metaphase Enterprise product data management (PDM) solution, which has given them a two-year head start in the market.
  • The opportunities in information and data management are substantial, and SDRC's background in engineering consulting is benefiting the company in the new environment.
  • The company's open architecture and vertical approach, focusing on specific industrial sectors, are helping SDRC to maintain its progress.
  • SDRC's results are reflective of the company's vision, with a 18% rise in first-half revenues to $219.2m and a 92% increase in operating income to $29.6m compared to the same period in 1999.
  • The worldwide product development market is expected to grow from around $6bn in 2000 to nearly $12bn in 2002, with PDM and virtual product development management (VPDM) tools taking a larger share of the total.
  • SDRC's enterprise product development solutions (EPDS) focus on leveraging the internet to enable virtual product development and outsourcing, with a web-centric architecture that allows companies to communicate with suppliers and extend the use of engineering knowledge.
  • The company is emphasizing the importance of automating intellectual capital, with a "vault-like" architecture that stores and shares knowledge throughout an organisation.
  • SDRC is launching a family of PDM solutions, e-PDM, which incorporates the "Four C's" of control, connection, collaboration, and configuration, and is backed by major customers such as Ford.
  • The company is also moving aggressively to develop digital mock-ups, which can be visualized throughout the organisation, reducing the need for physical prototypes and destructive testing.

Statistics:

  • First-half revenues: $219.2m (2000) vs. $186.8m (1999)
  • Operating income: $29.6m (2000) vs. $15.5m (1999)
  • Growth in the worldwide product development market: from $6bn (2000) to nearly $12bn (2002)
  • Number of Metaphase users expected by the end of 2000: many thousands
  • Percentage of design work outsourced to existing parts: 80%

Sources:

  • Financial Times, "SDRC Sees Opportunity in Enterprise-Wide Use of Product Development Software", 1999.