Taming the Upfront Cost of CAD
By Evan Yares, 3DCAD Editor
About a year and a half ago, I wrote an article for 3D CAD World, asking the question “Should you buy your CAD software—or rent?”
The thing that piqued my interest in the subject at the time was the release of a version of Solid Edge called Design 1, available only under a monthly subscription plan to members of the Local Motors community.
It was an experiment in social product development. Local Motors is an unusual car manufacturer: they use a co-creation process to design their cars, partnering with community members on their website. They hold periodic challenges, where community members compete to design vehicles.
Putting CAD power in the right hands
The Local Motors community is diverse, and includes industrial designers, engineers, students, mechanics, and hobbyists. The one thing that all members of the community have in common is that they are car nuts. They participate in Local Motors design challenges out of pure passion.
While some Local Motors community members are experienced (and occasionally professional) CAD users, there are many who have more enthusiasm than experience. Yet, enthusiasm can go a long way: When you provide a group of enthusiasts with best-in-class CAD tools, some will rise to the occasion, and create the kind of work that any professional would be proud of.
When Local Motors started working with Siemens PLM on the Solid Edge Design 1 program, their goal was to empower their community; to find a way to put professional CAD tools in the hands of their community members, at an affordable price point.
They realized that the upfront cost of professional level CAD software was simply prohibitive for most of their community members. They needed to find a way to lower the barrier to entry.
Why did they choose to work with Siemens PLM? The simple answer is that they talked to several CAD vendors (you may be able to guess who), and Siemens was the one that responded favorably, and was open to the idea of offering a high-quality CAD tool at a low monthly subscription price point.
Software licensing is hard
For any CAD software vendor, the decisions about how to license their software are a pretty big deal. They’re not things that can be decided with the flip of a coin. Pricing, distribution channels, licensing terms, and more are all interrelated, and have to be thought out carefully, in context.
There are a diverse set of factors that drive licensing decisions, including corporate ownership structure, licensing terms for software components, sales channel structure, regional market differences, and customer expectations.
If a hypothetical vendor selling a mainstream MCAD product in the typical fashion—with an upfront license fee, plus annual maintenance/support fees—wanted to move to a subscription model, where customers pay for the right to use the software for a period of time, what would it take for them to do it?
There are the obvious steps of creating new software license agreements, and setting the terms and pricing. Beyond these, the CAD vendor faces a challenge getting buy-in from all the interested parties who need to be convinced that the change will at least not harm them, if not benefit them. These parties include not just customers, but also suppliers and partners. If the vendor doesn’t get it right, it can be a painful experience for everyone.
Solid Edge Subscription Plans
When Siemens PLM started offering Solid Edge under a monthly subscription license in early 2012, I was impressed. By limiting the offer to the Local Motors community, they’d found an effective way to prove the concept, without potentially alienating their existing customers or their partners. A few factors played into their ability to experiment. Back in 2011, Chuck Grindstaff, Siemens PLM Software president, reorganized the company, making the group that develops and sells Solid Edge an independent business segment. (Solid Edge is sold by a business segment of Siemens PLM Software, which is a business unit of Siemens Industry Automation, which is a division of Siemens AG.) Because their product is not the leader in its market segment, the Solid Edge team are actively looking for new ways to be innovative and displace their competitors.
By all appearances, the experiment was a success, as Siemens PLM is now opening up the Solid Edge subscription option (http://store.plm.automation.siemens.com/store/siplm1/en_US/home/ThemeID.33153000)—first to US and UK users, and later to customers in other regions.
This looks to be a very good program. It is a true month-to-month subscription, and includes both web support and partner (reseller) support. Users can choose between four different levels of Solid Edge—from Design and Drafting, all the way to Premium. These are the full commercial versions of Solid Edge—exactly the same software that users get when they buy perpetual licenses.
This subscription plan will be attractive to a variety of users:
Those working on short-term projects
Those with peak demands for extra seats
Those with short-term demands for advanced features
Those who can’t afford the upfront costs of a permanent license
Those with little or no software budget
Those with delayed software budgets
Those with contract-based projects
Those who are using competitive products, and want to try Solid Edge
Those who need to modify (direct edit) customer or vendor provided CAD files
Those who are not CAD professionals, but who would like the chance to work with “grown-up” CAD software
This is not a sneaky deal, intended to attract you with a low upfront cost, and lock you in with higher costs on the back end. Users can subscribe for a single month, and cancel if they desire. Their CAD files will be completely readable in any commercial copy of Solid Edge. Users can also upgrade and downgrade anytime they want to, depending on their needs at the moment.
The monthly subscription plan is not a replacement for the existing perpetual license plan. It is just an alternative. The monthly subscription plan is priced so that 3 years of subscription is about the same cost as a perpetual license with 3 years of maintenance. For users, the choice between buying a monthly subscription or a perpetual license comes down to cash flow and flexibility.
Too often, I’ve seen license plans for CAD programs that seemed to be more about the vendor making money than serving the customers’ needs. I had a feeling like it was a game of three-card Monte, where the vendor wouldn’t let me see all the cards.
In this case, the Solid Edge people are showing their cards. But I think it’s more due to enlightened self-
interest than altruism.
Because of a combination of business and technical factors (not the least of which is the fact that they own Parasolid, D-Cubed, and most all of the critical technologies used to build Solid Edge), Siemens PLM can afford to offer a monthly subscription program with very attractive terms. They believe that providing more and better purchase and usage options for customers will help drive their long-term business. I think they may be right.
A contest to make an engineering dream come true
Professional CAD has always been relatively expensive and relatively hard to use. Not because that is the intent of CAD vendors, but because it’s the nature of the technology: A professional grade CAD program is probably an order of magnitude more complex than a typical “office” software application (even if you don’t count the advanced 3D mathematics.)
But, what if CAD’s barriers to entry could be lowered? What if the reach of professional CAD tools could be extended, to a larger community of users? What might be possible?
The combination of monthly subscription licensing and direct editing with synchronous technology have definitely lowered the barriers to entry for Solid Edge. Now an engineer with a great product concept can get access to a professional CAD tools that they can actually use, without needing to pony up thousands of dollars in advance.
That’s what gave rise to the recent Design World/Siemens Engineering Design Contest. We asked our readers: Do you have an engineering dream? Something you’ve thought about doing, but blew off, because you couldn’t justify the upfront cost of the CAD software? Possibly an idea for a Kickstarter project, a concept for a Burning Man mutant vehicle, or design to contribute to a non-profit project?
We were blown away, with more than 60 entries—judges from the Design World editorial staff, Siemens and Microsoft whittled the submissions down and finally selected a winner, Steve Triplett, Owner of Trinity Frame & Fabrication in Dallas. The basis of Steve’s idea is a rear engine driven reverse trike—two wheels in front, one in the rear—that is operable from a wheel chair.
In Steve’s concept, the chassis lowers to the ground to facilitate backing the chair into the vehicle from the front and then the steering nacelle closes in front of the rider. The vehicle then returns to normal ride height and the rider enjoys an unobstructed riding experience very similar to a conventional motorcycle. Current trikes for people with disabilities are of the “chariot” style, where the rider is behind the powerplant and enclosed in a box. Steve feels that this idea would benefit many paraplegics, as well as our returning vets, who have been injured and would like to ride.
Steve won a one year subscription to Solid Edge valued at $4,200, to help him make his dream a reality. He also will be receiving a Surface from Microsoft to help get his business up and running, valued at $850.