WorldCAD Access

Uh, oh: PTC lowering its FY13 revenue expectations, blames recession

PTC figures that the rough economy isn't going to pick up as they expected, and so they are lowering their revenue expectations for this year to $1.305 - $1.315 billion -- down 3.3% from the earlier projection of $1.34 - $1.37 billion. The company expects to lose $10 million alone due to poorer currency exchange rates.

The latest manufacturing industry reports indicate that European and Japanese manufacturing is in a difficult recession, and the U.S. manufacturing recovery has stumbled as well, recently. ... 85% of our revenue is coming from customers that are in recession.

And the earnings results of a number of enterprise software companies suggest that we're not alone in our view of a difficult macro environment.

During the conference call, one analyst noted that the number of active CAD seats has declined, and wondered if the trend would reverse -- or continue. PTC cfo Jeffrey Glidden felt that the seat number will go up in Q3 and grow from there.

 

 

France's skyhigh taxes place "all the digital sector in danger" -- Bernard Charles

The Financial Times is reporting today that Bernard Charles and other executives of France-based Dassault Systemes are thinking of emigrating from France -- or have already done so.

The new socialist government ruling France made good on its election promise to tax top income earners at 75%, as well as to sharply boost taxes to as high as 80% in other areas, such as capital, stock options, and awarded shares. The French government has made some cuts in its spending, but not enough to reduce the debt that keeps increasing due to its over-generous social programs.

In an interview with the French-language Le Monde newspaper, Mr Charles says the Dassault board of directors have talked about him leaving for a tax-competitive country. He claims he is less concerned about the 75% income tax rate (for incomes over Euro 1 million) than he is over taxes on capital and shares. To be a shareholder is the dream over every manager in the digital industry, he says, even in China.

Once the government takes away more than 60% of your shares, he says, "you are out of the race in the world." As a result, some managers have relocated overseas. Although he would not tell interviewers Dominique Gallois and Cedric Pietralunga how many Dassault managers have left France, we see some of them at the head of SolidWorks and Spatial.

"More broadly, our recruitment of top management will necessarily be outside France." Because, if not, then Dasssault will lose managers to other firms unhandicapped by France's uber-taxes.

Those upset by rich people leaving France ask, "Don't you have a responsibility to stay here?" To which Mr Charles replies that his is a global company with no "physical barriers." By this, I think he means that software is digital and so can easily be programmed anywhere -- even across the border in Germany, which is more entrepreneur-friendly (heh, entrepreneur is a French loanword).

Mr Charles notes that in December he sold 28 million shares just to pay his tax bill. I recommend that Dassault Systems move to the business-friendly low-tax haven of Canada; we even have a suitable French-speaking province!

Sources:

• Financial Times: http://www.ft.com/cms/s/0/13a9bcb0-8a53-11e2-bf79-00144feabdc0.html 

• Le Monde: http://www.lemonde.fr/economie/article/2013/03/11/dassault-systemes-la-fiscalite-met-en-danger-la-filiere-numerique_1846073_3234.html#xtor=AL-32280270

Le Monde in English: Google Translate

 

CAD exec expresses frustration with shenanigans of US politicians

During last week's conference call with financial analysts, Autodesk ceo Carl Bass expressed his opinion on the budget deadlock in Washington DC: "The optimism I hear from our customers is just tempered somewhat by the stupidity I see by our politicians."

Analysts took him up on his comments:

 
Kash Rangan (BofA Merrill Lynch): "Carl, your comments about the politicians was very vague and ambiguous. I just wanted to clarify-- I'm just kidding, that's not my real question."

Mr Bass: "I have two teenage sons, and I expect them to act like knuckleheads. I don't expect members of Congress to act like knuckleheads, but they're acting more like my teenage boys than they should."

 

Heather Bellini (Goldman Sachs Group): "What are your expectations, given everything that's going on in Washington?"

Carl Bass (Autodesk): "Only if you can tell me what you've seen. I mean, we don't know what the heck to make out of the sequester and how that's-- I mean, I think this is unknown territory for everybody.

Source: http://seekingalpha.com/article/1223161-autodesk-management-discusses-q4-2013-results-earnings-call-transcript

 

In upFront.eZine this week: analysts quiz PTC over Creo sales

In upFront.eZine issue #764 we have for your reading pleasure...  

1. PTC Q1 2013 Results
    - Q&A

2. Out of the Inbox, and our other regular columns.

You can read all about the business of CAD at www.upfrontezine.com/2013/upf-764.htm

CAD vendors will be tempted into biasing their cloud pricing

The price you pay for CAD software depends on several factors, including these:

• The country in which you purchase the software (USA workers get the baseline price, with customers in nearly every other country paying as much as double)

• Educational status (students and teachers routinely get the software free; other occupations do not -- except for software reviewers)

• The status of your company (networked licenses cost less; bulk licenses cost less)

• Whether you are part of a target market (I hear cases of software being seeded, given away free to specific customer in specific cities of specific disciplines; in addition, there are competitive upgrades to lure away customers, and so on) 

This is why most CAD vendors no longer list prices, but require you to contact one of their salesman. It's his job to customize the price to you -- meaning that for the same software you might pay more or you might pay less than your competitor. In the end, it seems that the only customers who pay full price are the least appreciated and hardest working ones: the self-employed.

Those CAD software vendors who like the cloud, like it because it allows them to know you in the biblical sense: personally and intimately. The Wall Street Journal this morning is reporting that vendors like Staples vary online pricing depending on the income they guess you have, as well as the distance of the location of your Web browser from competitors. You pay less when your Web browser is closer to a competitor and/or determines you might have a higher income from your geolocation or buying habits. (Remember folks, surf safe: turn on your Web browser's privacy miode.)

But the idea of an unbiased, impersonal Internet is fast giving way to an online world that, in reality, is increasingly tailored and targeted. Websites are adopting techniques to glean information about visitors to their sites, in real time, and then deliver different versions of the Web to different people.

Prices change, products get swapped out, wording is modified, and there is little way for the typical website user to spot it when it happens.

The cloud allows CAD vendors to do away with the salesman sharpening his pencil; like airline seat pricing, the price of your next CAD upgrade or subscription may well be biased -- er, dynamically adjusted -- in real-time.

 

Source:
http://online.wsj.com/article_email/SB10001424127887323777204578189391813881534-lMyQjAxMTAyMDIwMzEyNDMyWj.html

Boo! France's new higher taxes = 200 fewer jobs at Dassault. Scary!

We used to have a socialist premier of our province. Like any socialist politician who never held a real job before ascending to power, he did not understand money. It was near the end of his term (he resigned in disgrace over a casino owner arranging to add a deck to the premier's home) that he began to catch on to the immutable rule: money out = money in.

I remember him saying, I never understood that when I gave government employees a raise, I needed to also raise taxes to pay for the raise (or something like that). If only more politicians would learn the lesson sooner than later.

Over in France, the new socialist government jacked up taxes on the "rich" to 75%, leading some of them to move to less  hostile countries. In an interview with a French newspaper, ceo Bernard Charles of Dassault Systemes intimated that the higher corporate taxes cost 200 jobs.

What he meant is that Dassault could have hired 200 more employees for what it now has to pay each year in higher income tax.

By raising taxes so high, the government now would not collect income tax on 200 jobs, along with not collecting sales taxes on the money that would now not be spent by the 200.

Maybe any aspiring politician wanna-be should be required to run a small business for a year, before tossing their hat into the ring. Oh, and if the they bankrupt the business, then they are prohibited from running for public office. For life.

When CAD executives and financial analysts don't understand each other

Financial analysts use their own secret language when communicating with industry executives, as we have documented here in earlier times. During Dassault Systemes' conference call last week, h however,  financial analysts and company executives at one point had a hard time understanding each other:

Unidentified Analyst: And on the churn rate for Solidworks Q1 Q2 Q3?

Dassault CEO Bernard Charles: Can you repeat it, please?

Analyst: You said that the churn rate of Solidworks was steady in Q3, but I would like just to compare it to Q1 and Q2, and how does it compare to 2009? The maintenance contract churn rate.

Dassault CFO Thibault de Tersant: Sorry?

Analyst: Churn rate.

de Tersant: Churn rate.

Analyst: Year-to-date--

de Tersant: We--

Analyst: 2009--

de Tersant: We hear your poorly, I mean.

Charles: --generated at SOLIDWORKS year-to-date and how it compares to 2009.

de Tersant: Thank you, Adam.

Analyst: In new licenses, you mean?

Charles: On the recurring--

de Tersant: On the recurring. On the recurring, the renewal rate is much higher than in 2009. It is 10 points higher.

Analyst: Thank you.

Charles: Did we answer your question?

Analyst: Thank you.

 Source:
seekingalpha.com/article/952741-dassault-systemes-ceo-discusses-q3-2012-results-europe-call-earnings-call-transcript 

Bernard Charles says, We've explained it to the Solidworks user community...

During Dassault Systemes' conference call last week with financial analysts, ceo Bernard Charles said that his company has been keeping Solidworks users up to date:

 

...we have high level of motivation from the user community. And of course, this is critical because we are preparing the evolution of the generation of Solidworks to continue to unify our 3DEXPERIENCE platform, which was also stated during the announcement.

We explained to our user community that over time, the convergence between Solidworks and the 3DEXPERIENCE [a.k.a. "the V6 architecture"] platform will bring benefits, being able to provide upside with application portfolio.

Later, he added:

...one multi-platform 3DEXPERIENCE platform. This is multi-brand, it enables CATIA, SIMULIA, EXALEAD, NETVIBES, INOVIA, 3DSWYM. But you don’t see the products anymore or the brands. What you see is the full solution to do the job and really addressed the needs.

 

Source:
seekingalpha.com/article/952741-dassault-systemes-ceo-discusses-q3-2012-results-europe-call-earnings-call-transcript 

How Samsung uses Dassault software to make a better touch interface

During Dassault Systemes' conference call last week with financial analysts, ceo Bernard Charles described how Samsung uses Simmula software for smartphone interface design:

Samsung electronics. This is an interesting showcase because we all use more and more devices with our chat-touch devices [smartphones]. And as you know (and you have touch devices), you want more and more selectivity. And really if you have a big finger, you want to have great selectivity and precise typing capabilities.

Samsung has selected SIMULIA to do this simulation, to really find out what will be the best. It serves for both the display and the keyboard, and it serves to increase and find out the quality of the contact between the fingers on the keyboard and the fingers on the screen to improve that selectivity, and improve also the feeling and the experience from a user standpoint.

It’s highly sophisticated simulation, and they really reduced by a significant number, the mistyping errors from 35% to 7% when they measure that.

So, it shows that simulation can also be used there for user experience, which we think has a high potential. When you think about now the importance in consumer decision factors about the experience you get from the product, it’s not only about capabilities but it’s about styling, emotions, feelings.

Source:
seekingalpha.com/article/952741-dassault-systemes-ceo-discusses-q3-2012-results-europe-call-earnings-call-transcript 

AU 2012 to pay speakers as little as zilch

You (or your firm) might be paying $2,05o to attend Autodesk University + flights, hotel, ground transportation. But the organization running Autodesk University is cutting the pay it gives people who give classes.

One long-time speaker tells me pulled out after he learned about his new pay grade:

Honoraria: Free admission to conference. No accommodation, no travel expenses covered.

• All virtual classes taught = $0
• First live class taught = $0
• Second live class taught = $400
• Roundtable discussion = $100

The $400 for the second class tells me that AU is pressuring each speaker to come up with at least two classes. More classes-per-speaker means fewer presenters on-site, and so lower expenses for AU.

 In addition, he tells me that AU has cut back on the benefits of the Guest Pass -- now renamed the Evening Pass. It costs $250, but this year covers only the three evening activities. Guests can no longer join their spouses for breakfast or lunch, and cannot enter the exhibit area (unless they pony up $75 more).

Yah, so you're paying $2000 to listen an expert speak, who may well be compensated $0 for his talent.

The Original AU Zilch-Pay Policy

This reminds me of Autodesk University when it was run by Miller Freeman. For the very first AU, the staff of Cadence (owned by MF) offered to pay me double the usual rate to give three talks. Nice gig!

The next year I was invited to speak again, but didn't accept after I noticed the sentence that described the full and complete compensation: "You will be compensated through the admiration of your peers." It has a lovely ring to it, but cold hard meaning is: $0.

Closer to the AU event, someone on the Autodesk Compuserve Forum -- yeh, that's where in those days we hung out online -- asked if I was going to speak again at AU. I said no, explaining why. People were astounded, for they had not noticed the new no-pay policy. Some speakers pulled out.

MF organizers were furious at me after I publicised their new zilch-paygrade. Heh, I pointed out to them that it was their problem that they weren't paying anyone! Nevertheless I was banned from AU for as long as MF ran it.