Since I started the last posts about PTC's loss, I guess I feel obligated to respond to this post. I, for one, am glad to see some profits, this means they're doing something right. And I am certain that outsourcing is a great deal of the money saved to achieve those profits. I wonder how much market share they have and if they're upward or downward trending.
Thats a good question - aside from the the standard bits and pieces of information out there (Autodesk has the most users, Solidworks is the fastest growing, blah, blah, blah), I haven't seen any recent real information about market share. Whats the big secret I wonder?
They don't tell you market share because........they don't know. If PTC sold 10 seats of Pro to someone in 1997 and they switched to SW in 2002, PTC still counts those 10 seats as part of the installed base. You can be sure that UG, SW, et al do the same.
Also, it is hard to quantify market share by analyzing new licenses sold. If PTC had 99% market share of solid modellers (not realistic, I know, but it helps make the point), then their sales of new licenses would be tied to the growth of the market as a whole and would be a small number - you can't sell the license twice. Along comes a SW and gets a bunch of users to switch, that will show as many more licenses sold per quarter even though their penetration of the total share would be small compared to PTC -or whoever.
Add to this the fact that many companies (wrongly, I think) have more than one solid modelling package, and you can see that it is almost impossible to quantify market share for something as ephemeral as a piece of software.
Perhaps if the companies involved could honestly tally the number of maintenance-paying customers a clearer picture would emerge.
Return to profitability? The last report I saw only claimed they were on track reducing losses. Have they really turned the corner and shown an actual profit? And let's not get involved with restructuring shinanigans.
On January 21, 2004 PTC released the results for 1QF2004 ending January 3, 2004...Net income was -( $26.5) million, a significant improvement from a loss of $38 million the previous quarter but more than double the loss of $11.4 million for the same period a year ago
What's worse, With the exception of maintenance, revenue was down in all categories. The plan seems to be that when buisness goes to zero the company will stop losing money.
I go back to something I said in an earlier post. We, as end users, should be asking PTC, when it's our time for maintenance renewal, for a decrease in costs. I should be able to ask for this because I'm not getting the same timely help from tech support or the same quality.
Perhaps there is method to their madness. Profits and they appear to be reversing the trend of declining revenue; especially with design solutions through the reseller channel. I find that particularly encouraging since it represents a solid (excuse the pun) strategy for making inroads into the collectively large market of companies with a small number of CAD users.
I've read that maintenance fees generally average about 15 to 20% of the cost of the software which puts PTC at the high end. Compared to CATIA and Unigraphics, the base price of Pro/E is pretty low but maybe they make up for it with higher maintenance costs.
Anybody know what maintenance is for other CAD packages?
Here's an interesting article on enterprise software maintenance contracts in general...
Software maintenance agreements:
Although the program and pricing vary by vendor and type of application,
some reports indicate the cost for software maintenance is anywhere between
7% and 89% of the software's list price. Most IT executives consider 10% to
12% a reasonable annual fee. To get the most bang for your buck, use these
tips for negotiating software maintenance agreements:...