Parametric shakes up its rivals

Electronic News,  March 15, 1993  by Craig Stedman

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CAMBRIDGE, MASS. -- The extent to which Parametric Technology Corp. has shaken up mechanical design and engineering was illustrated at Daratech's recent strategy conference here, which Parametric managed to dominate although it didn't officially participate. Despite that and its relatively small size--Q4 revenues were $32.5 million and Parametric was ranked ninth in 1992 mechanical software market share by Daratech--the Waltham, Mass., firm's presence hovered palpably over the proceedings.

Rival vendors, pressured by Parametric's rapid growth through stand-alone sales, alternated between outlining product plans aimed directly at its Pro/Engineer software line and attempting to push the market's agenda back toward fully integrated design and manufacturing.

Robert Fischer, senior vice president of Structural Dynamics Research Corp., disclosed a new version of its I-DEAS package introduced last week (see story, this page) will be marketed for both integrated and stand-alone uses--the first time SDRC has gone the latter route. SDRC is developing stand-alone marketing campaigns "going directly against PTC" for the new release, Mr. Fischer said, adding that different sales personnel and sales compensation plans are being put in place to handle that side of the business.

Ed Kfoury, president of IBM's Industrial Sector division, and Jack Shields, Computervision's president and CEO, both tried to emphasize the importance of a fully integrated CAD/CAM approach in obvious attempts to cast their companies in better light against Parametric.

"I really think we're well-positioned for 1993," Mr. Kfoury said of the industry leader. "The difference will be who will get all these things integrated, who will reduce customer cycle times and can we really make progress in that regard."

Mr. Shields was more direct, describing modeling technology as "almost a commodity today" and claiming there remains "a tremendous gap between what Parametric has available and what the customer needs" in areas such as analysis, data management, manufacturing and drafting.

"The 'P company' is disingenuous, which means less than candid," he said. "That's the gentlemanly word we use today. Having a fast modeler and not being able to tool the product doesn't cut it. You've got to look at the product from an over-all sense, not one of the vertical steps."

Cadkey president and CEO Malcolm Davies also got in a dig against Parametric's image, saying "the real advantage we have" in trying to launch the Varimetrix package against Pro/Engineer "is the dealers and distributors don't hate us."

Whatever its merits, though, the anti-Parametric barrage also reinforced the impression that the company is squarely in the driver's seat of the mechanical design market at present. "To an extent, I think that's true," noted Lee Murray, president and CEO of Cadam. "They've got the attention of some very significant users. The pioneers have gone with them, and they command an incredible price point that's the envy of us all."

Daratech president Charles Foundyller noted Parametric's growth, which could propel it into the sixth spot in mechanical market share this year, is pushing competitors to try "to reinvent themselves all over the map" in an almost frantic effort to snatch back the momentum. "They're taking away everyone's marginal business, and that scares people to death."

Parametric was invited to make a presentation at the conference, but declined. The company's executives typically only go in front of financial analysts, and as Mr. Foundyller pointed out, "If everything's going right for you, the only thing you can do is screw it up."

Parametric executives who attended the conference as observers took great satisfaction from the attention the company received from its rivals. "From a positive sense, all of them have basically said we have the right product for the market," said marketing VP Louis Volpe. "They're all trying to imitate what we have, and we like that."

Mr. Volpe portrayed the attempts by CV and IBM to stress integrated design and manufacturing capabilities as tacit admissions they can't match Parametric's modeling prowess. "Our reaction is when you don't have great technology, you become a systems integrator, and that's a very different business."

Parametric doesn't quibble with outside projections that its calendar 1993 sales should be in the $165 million range, up from $100 million last year. That's coming in a market Daratech expects will only show 2.2 percent growth, which Mr. Volpe maintained is an indicator of how much business Parametric is taking away from other vendors.

COPYRIGHT 1993 Reed Business Information, Inc. (US)
COPYRIGHT 2008 Gale, Cengage Learning