On its own: UGS previews upcoming releases of NX, Teamcenter, and add-ons

CADalyst, August, 2004 by Sara Ferris

In its first media presentation since it was sold by EDS to a group of investment firms, UGS made it quite clear that it's delighted to be an independent company. The separation was fairly straightforward because UGS was not fully integrated with EDS and had been a public company in the past. UGS develops NX and I-DEAS high-end CAD software, midrange CAD modeler Solid Edge, Teamcenter for PLM (product lifecycle management), and eFactory for manufacturing automation. Through its PLM component technology business, it also offers the Parasolid modeling kernel and other software components, including those recently acquired through its purchase of D-Cubed.

A LOOK AT THE BOOKS

CEO and president Tony Affuso reported that UGS counted 42,000 customers in 2004, up from 39,500 in 2003. Installed seats reached 3 million in 2004, up from 2.2 million in 2003. The company is coming off four straight quarters of growth and anticipates an IPO (initial public offering) in the next 12-24 months. Besides consistent growth, the company has the advantage of a steady flow of revenue for maintenance and services. UGS reports a 94% renewal rate for maintenance, attributable to the high costs of switching CAD and PLM software.

The three investment firms (Bain, Silver Lake Partners, and Warburg Pincus) that combined resources to buy UGS all have experience with technology firms. Affuso said the investors were UGS management's first choice because they didn't want to cut the research and development budget or change management. The company invests more than $200 a year on research and development.

Affuso addressed the debt that UGS management incurred, saying that the financial structure is in place to pay the debt down. CFO Doug Barnett explained that the $2.1 billion acquisition price includes $1 billion in debt. UGS will repay principal at $5 million per year for the next five years. It also plans to use some of its yearly free cash flow--which Affuso says never dipped below $110 million, even in its worst year--to pay down the debt.

PLM PROMISE

Affuso reports strong interest in PLM, particularly among companies seeking to move away from proprietary BOM systems. He cited one automaker that needed 50% part reuse in a new product for it to be profitable. UGS helped it develop a tool that compares two models and identifies parts that can be reused from one in the other.

UGS customer John Crary of the Lear Corp., a manufacturer of automotive interiors, says data integration is a huge issue, not only for warranty responsibility but also to meet requirements for "green" reporting, particularly in Europe. There manufacturers must provide lists of materials used and how to dispose of them. He noted that Lear is starting to embed RFID tags in seats as a cleaner way to track their history. He also noted a trend toward contract assembly, where Lear employees install Lear seats as subcontractors in automotive plants.

UGS is also seeking to expand into new markets such as consumer product goods, retail, apparel, petrochemicals, and pharmaceuticals. Other areas of growth include shipbuilding, sourcing, mechatronics, and MRO (maintenance, repair, and overhaul). UGS cited the example of Tinker Air Force Base, which is implementing a wireless Tablet PC project to streamline maintenance of military aircraft such as B-1 and B-52 bombers and C-135 transports. A version of Teamcenter for the Tablet PCs duplicates the look and feel of the original paper forms, but adds error checking and knowledge capture features. The base reports a 34% improvement in turnaround time for repairs.

UP NEXT FOR NX

NX 3 is on track to ship in the third quarter. A development goal is to eliminate waste in the design process--for example, time spent waiting for test results or looking for information, designing in features that the customer doesn't need, failing to use existing design knowledge, and so forth. NX's managed development environment provides a control system for coordinating versions and keeping all design team members up to date. It manages all NX models and related data, including drawings, documents and spreadsheets, simulation scenarios, test data and results, NC data and associated tooling information, and validation solutions.

The ability to manage all product data will help with lean manufacturing and Six Sigma initiatives. It also facilitates synchronization of internal and external product design teams and supplier integration.

NX 3 features new icons that conform to Windows standards and selectable environments. Blends and fillets are consolidated. Its SDK will help embed NASTRAN further into UGS technology. There's also a new styling task environment for industrial design as well as polygon modeling tools for reverse engineering. Also new is a sheet-metal application with tab, flange, contour flange, bend, unbend, corner, and job capabilities.

Concurrent with NX 3, UGS plans a process definition tool. NX Simulation Process Studio will help users automate repetitive simulation tasks by designing their own analysis tools and wizards. The product will capture complex processes and expert knowledge so that nonspecialists can benefit. Teamcenter will synchronize the process-based toolsets and manage the revision history of analysis processes.