Brad Holtz

Autodesk vs. Vernor: It's a big precedent for ALL software vendors

brad.holtz@cyonresearch.com — Fri, 23 May 2008 05:00:00 GMT

Here's all you need to know about the Autodesk vs. Vernor ruling:

1. Software "licenses" where the customer pays upfront a single fee for perpetual use of the software, with no obligation to return the software, must be treated by the courts as if it were a sale. Therefore the application of copyright law follows the first-sale principle.

2. Software vendors can get avoid have this ruling apply in any one of several ways.

a. renting the software. The Autodesk vs. Vernor ruling interprets a fully paid up perpetual license as a sale. If the license is not perpetual and fully paid, the interpretation of sale would not apply.

b. require the customer to return the software at the end of use. This would leave open the possibility of negating one of the conditions of the Wise decision on which this ruling is based.

I recommend the following CADCAMnet article for additional reading: http://www.newslettersonline.com/user/user.fas/s=63/fp=3/tp=47?T=open_article,969809&P=article

Full text of the decision can be seen at: http://www.newslettersonline.com/user/user.fas/s=63/fp=3/tp=47?T=open_article,969810&P=article

Blade Workstations: Surprisingly NOT Boring

brad.holtz@cyonresearch.com — Thu, 01 May 2008 05:00:00 GMT

I was at COE earlier this week when HP announced their new blade workstations. As a courtesy, I attended HP's product release reception, where I had the "opportunity" to learn about the announcement. I was expecting to be politely bored. HP is not the only company out there with a solution (IBM was showing its own workstation blade server at COE too.) But who cares about a workstation blade?

Well, now I do. This technology is a game changer. It addresses very real issues of security, intellectual property, centralized maintenance, access to power on demand, and can remove heat and noise generation to remote areas where they are not problematic and perhaps even beneficial.

Resist the urge to ignore. Take a deep look at workstation blades -- I expect you'll be surprised too.

Cimatron acquires Gibbs

brad.holtz@cyonresearch.com — Sat, 05 Jan 2008 08:00:00 GMT

Cimatron acquired Gibbs for $5M in cash and $4.5M in stock. That's about 75% of revenue, or about 7x income. Gibbs and Cimatron have suprisingly little overlap in their customer base.

The combined company has a current market capitalization of about $22M on a combined $30M revenue stream. When compared with most stocks on the Cyon Research Index, this is quite low. But Delcam, a direct compare for Cimatron, has a market capitalization of $45M on sales of about $60M. So the question to ask is: why are pure-play stocks in this sector so poorly valued?

Cyon Research Stock Index Updated

brad.holtz@cyonresearch.com — Wed, 02 Jan 2008 08:00:00 GMT

For the past eight years, Cyon Research has been publishing its Cyon Research Stock index, first in Engineering Automation Report (as EAR Index), and then more recently in CADCAMNet. Each year the index is rebalanced and updated. Now, for the first time, we have made the index accessible to all. You can see the index at cyonresearch.com/stocks.

There are tools here that we have not made public in the past. Please mark the page and check it often as we expect to expand the richness of the data provided as we can.

Bill Buxton's "Sketching User Experiences"

brad.holtz@cyonresearch.com — Sun, 09 Dec 2007 08:00:00 GMT

I just read Bill Buxton’s “Sketching User Experiences” (Morgan Kaufmann 2007). Highly recommended. It has had a significant impact on my thinking of the process of innovation.

Buxton does an excellent job of delineating the role of sketching and leads the reader by example. One key point is that while we all know how sketching is a learned art, improved by practice, the reading and interpretation of sketching is also a learned art.

While the book seems to focus on traditional sketching, it does a very effective job of bringing the reader to understand the nature of “user experiences” and the context of sketching those experiences.

Very enlightening.

http://www.amazon.com/Sketching-User-Experiences-Interactive-Technologies/dp/0123740371/ref=sr_1_1?ie=UTF8&s=books&qid=1197241433&sr=1-1

Bruce Sterling's short story from COFES

brad.holtz@cyonresearch.com — Thu, 06 Dec 2007 08:00:00 GMT

Bruce Sterling was not at COFES just to give the keynote. He was actively engaged in absorbing the essence of COFES. The result of his immersion into COFES is a mind-expanding short story that is full of detail that every COFES attendee will immediately recognize. The story was published by MIT's Technology Review and can be seen at: technologyreview.com

Enjoy!

Siemens to buy UGS for $3.5b

brad.holtz@cyonresearch.com — Wed, 24 Jan 2007 08:00:00 GMT

The London Financial Times announced this afternoon that UGS is about to be acquired by Siemens. http://www.ft.com/cms/s/af89b41c-aba4-11db-a0ed-0000779e2340.html

The deal, which is out of Siemens' automation group, is likely to be designed to leverage the factory automation tools from UGS, not unlike the relationship that Dassault Systemes has with Schneider Electric.

The price clearly reflects that this deal is strategic to Siemens -- the dollar value of their factory automation group dwarfs that of UGS and if the new relationship can bump that number up even a small percentage, the cost of Siemens purchase will seem quite reasonable.

This is one of those deals where everyone wins.

Siemens gets a strategic asset at a discounted price. UGS' financials have not been a strong as its competitors over the past few quarters, depressing its non-strategic valuation. I had predicted a valuation at the time of sale at more than $4b back when UGS was spun out of EDS http://cadwire.net/commentary/?Id=711 The current price is a good deal for Siemens.

UGS finds a good home and owner and a price that reflects a bump over what their current financials might otherwise support. They get that debt burden off their back, they'll have access to more resources, and have lots of opportunites to leverage opportunities with their new owner.

PTC has to love this because if UGS is worth $3.5b with their financials, PTC must be worth at least $2.6b, if not more. That would represent a stock price in excess of $24/share, which is way over what the price is currently, even with today's jump from PTC's good earnings (see tomorrow's CADCAMNet article by Randall Newton at www.cadcamnet.com )

Dassault Systemes has to look at this as an opportunity to target a potential (an unsupported one, I might add) user uncertainty about what UGS will look like under Siemens. "How many different owners does that make now?"

MSC.software and Ansys probably like it too. With all the focus and attention on the factory automation, it is not hard to see an opportunity for MSC.software and Ansys take attention away from UGS' $100M+ analysis business.

And the users should win here too. Siemens will be a friendly owner of UGS and we recommend users view this in a positive light.

All in all, a nice deal. And one I was not expecting.

Congratulations.

The Globalization of Engineering

brad.holtz@cyonresearch.com — Thu, 18 Jan 2007 08:00:00 GMT

John Callen and I have had a number of very interesting conversations over the past few years. John has this habit of actually reading the press releases we put out and then making cogent points on them.

On hearing of the theme for COFES 2007, John wrote:

I remember a couple of COFES' ago commenting on how it was accepted that it was hunky dory that domestic manufacturing move offshore. And then the very next COFES, everyone was up in arms because REAL Engineering was also getting outsource offshore. And now, COFES 2007's theme has us fully accepting the Globalization (AKA Outsourcing) of Engineering, by which I would expect, even the REAL Engineering. Amazing.

So what do we tell the kids in high school that are making choices for their future careers? Try the service or entertainment industries???

I want to be clear that the Globalization of Engineering is NOT synonymous with Outsourcing.

Outsourcing is a related issue, but one does not require the other.

Globalization of Engineering is the reality that design firms are operating in an environment where their competitors can come from anywhere in the world, the products need to serve a market that could be anywhere, the products need the ability to be sourced from anywhere, and that Engineering, as a team sport, no longer implies single, co-located teams.

This is what we will be discussing at COFES.

As for what we tell the kids making career choices, focus on learning how to execute, how to collaborate, and how to thrive on change.

His response:

I guess the answer to my "so what do we tell the kids in high school who are making their future career choices" question is:
a) learn one or more relevant foreign languages (any suggestions
b) keep using instant messaging, email, and other internet based communication forms, it'll come in handy
c) take on team projects, especially those that require you to interact remotelyGotta wonder how many school systems actually would support this type of curriculum?

I think John is right on the money here.

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(For those that don't know John, he is vp of marketing over at Gibbs & Associates. John is passionate about the role of -- or lack thereof -- that CAM plays in the minds and products of the CAD Vendors. John has real deep technical chops and has roots that go back to the early days at Evans and Sutherland. His critical voice is one I pay close attention to.)

For COFES Attendees Only

brad.holtz@cyonresearch.com — Thu, 14 Dec 2006 13:00:00 GMT

Audio recordings from past COFES events are now available to COFES attendees.

Autodesk to Miss Filing Deadline, Gets SEC Request for Info

brad.holtz@cyonresearch.com — Wed, 06 Sep 2006 12:00:00 GMT

Autodesk today announced that they were going to delay submitting their 10-Q quartery report http://go.cadwire.net/?49918,1,1

I spoke with Carl Bass last week regarding this possibility. Bottom line, this is an accounting issue. There will be no noticable effect to this on Autodesk's bottom line and there are no issues here that have any substance.

In other words, you can ignore it, even if you are a stockholder.