Cambashi Insight – Dassault Systèmes Industry Analyst Meeting

by Alan Griffiths


Dassault Systèmes (3DS) executives presented their 3DEXPERIENCE strategy at the company headquarters near Paris.  Its aim is ‘to position the company as a catalyst and enabler of the Industrial Renaissance’.  This transformational approach involves a wide range of sophisticated technology from multiple 3DS brands and high-level services.  And 3DS has made a number of significant acquisitions and partnerships in recent years that widen its portfolio even further, including the largest – Medidata – that was announced during the meeting.  Several major ‘wins/partnerships’ such as Boeing, Airbus, EDF, ABB and BHP show what is possible.  While the overall growth and profit figures are good, the current strategy for increasing services revenue is dependent on management consultant-type services, whereas the packaged Industry Solution Experiences are ‘out-of-the-box’; Cambashi’s reading of the market is that strongest short-term demand is for ‘packaged solutions’ that are easy to install and use without third party services.

Important Details

New Industry Groups

3DS has created three new industry groups – Home and Lifestyle, Energy and Materials and Construction, Cities & Territories – bringing its industry segmentation to eleven.  It has twelve ‘brands’ in four groups; Social and Collaborative Apps, Information Intelligence Apps, Simulation Apps and 3D Modeling Apps.  (Presumably, the number of brands will increase to thirteen when the Medidata acquisition is completed?).  As a global company, it sells into over 140 countries through twelve divisions. In 2018 it increased its sales by 10% to €3.5 billion with 17,000 employees.

Systems of Systems

The underlying theme of 3DEXPERIENCE is complete simulation – ‘digital twinning’ – of customers’ operations, going beyond geometric modelling to ‘systems of systems’ that model the behaviors of mechanical systems, ‘cyber physical systems’, businesses and operations. This is very powerful but also complex in terms of the technology involved and the services required to execute.

The Cloud Effect

In 2017 Dassault Systèmes acquired a majority stake in Outscale, a global leader in enterprise-class cloud services. Cloud-based software is vital for digital transformation, agility and rapid deployment of solutions, and all 3DS applications are now first developed for the cloud. Cécile Doan, Head of CATIA Strategy, Market Development and Finance, explained that startups in particular benefit from ‘the cloud effect’ as they don’t need to have IT departments and they can add capability quickly, as it is needed. Examples include Joby Aviation (electric, autonomous, vertical takeoff and landing vehicles) and Zahner (an architectural engineering, manufacturing and construction firm that uses Building Information Modeling (BIM) for a leaner design and construction process).

Connected Capability

Although it hasn’t jumped onto the IoT bandwagon, 3DS actually has considerable ‘connected’ capability and good reference customers.
Bernard Charlès, CEO and Vice-chairman, announced that the China-based SuperMap Software Co. Ltd. intends to jointly engage with 3DS to leverage its 3DEXPERIENCE platform with SuperMap’s GIS software to transform construction, cities and territories in global markets, starting with China – one of the world’s largest adopters of building information modeling (BIM). GIS and BIM providers are amongst the leaders in connected applications capability.
Philippe Bartissol, VP Industrial Equipment, described 3DS’ partnership with ABB where connectivity to its products in the field provides feedback to the 3DEXPERIENCE design process.
Simon Huffeteau, VP Construction, Cities & Territories, predicted that the ‘connected home services’ market could grow from $80bn in 2017 to $200bn by 2025. BIM is also firmly on the agenda.
Claire Biot, VP Life Sciences, described how, through the investment in BioSerenity, patients can be connected through sensors in clothing to monitor conditions such as epilepsy and, by 2022, receive dynamic treatments.
Aaron Kelly, Cloud Advocacy Director at Solidworks Corp., introduced the 3DEXPERIENCE.WORKS strategy that offers ‘IQMS-integrated’ versions of SOLIDWORKS, DELMIA, SIMULIA and ENOVIA. IQMS has a native MES solution and can connect to machines and items throughout the ordering-scheduling-production-shipping process. It claims an addressable market of $4.9bn as only around 15% of their market is equipped with this capability.

An Exciting Future

Florence Verzelen, Executive VP, talked about ‘The workforce of the future’ and explained 3DS’ ‘Value Engagement Team’ strategy for overcoming possible human resource limitations by developing relationships with major global, local and specialist consultancy and systems integration (C&SI) partners such as Accenture, Capgemini and TCS.
The $5.8bn Medidata Solutions acquisition presents the enticing possibility of combining 3DS’ virtual modeling and life sciences solutions with Medidata’s clinical trials management products (RAVE Clinical Cloud and SHYFT Analytics). Bernard Charlès, Vice Chairman and CEO, Dassault Systèmes, said “Medidata’s leading position in clinical trials complements our life sciences solutions on the 3DEXPERIENCE collaborative platform. Medidata’s recent expansion into real world evidence and analytics coupled with the power of modeling and simulation demonstrates how the virtual world will catalyze the next generation of patient-inclusive therapeutics. We are now well positioned to be the enabler of the Life Sciences industry transformation, illustrating our company’s purpose of harmonizing product, nature and life.”
Medidata estimates its market opportunity to be $7bn.
The new Construction, Cities & Territories industry supports 3DS’ commitment to BIM, and its contracts with Zaha Hadid, AECOM and ENEDIS underline this intent.
Thomas Grand, VP of the new Energy and Materials group, described how this formation is the result of a 3-year focus on capital projects and facilities. In particular, four major programs are showing promising results in nuclear, oil & gas and mining with: McDermott, EDF, Exxon and BHP, using 3DS’ ‘Industry Solution Experiences’ as ‘Out-of-the-Box’ solutions. This is a good move towards accelerating growth through packaged software rather than complex, One-of-a-Kind projects.
3DS’ Industry teams know how to analyze the pain points of major customers and to define and deliver Out of the Box ‘Industry Solution Experiences’ to address those pains. These Industry Solution Experiences such as ‘Zero Defect’, ‘Virtual Garage’ etc. are taken to market by direct and indirect channels, primarily targeting the large enterprises and mid-size accounts. Meanwhile, simpler Out-of-the-Box packages like SOLIDWORKS and DELMIAWORKS are provided through the Value Solutions and Professional channels.

Why this matters

  1. As well as being able to model, simulate and test geometric models, 3DS’ ‘systems of systems’ approach to digital twinning speeds-up the design or transformation process and allows different business models to be tried to ensure an optimal, robust solution. In the car industry, 3DS claims to reduce development cost by 30% and decrease time to market by 20%. 3DS is now looking into applying this approach to other businesses such as financial institutions.
  2. Cloud-based software is vital for digital transformation, agility and rapid deployment of solutions. 3DS has its own cloud capability and all applications are now first developed for the cloud which positions it to expand quickly into new markets.
  3. 3DS is not widely known as an ‘industrial IoT’ or ‘Connected Applications’ company, although it does have considerable capability and presence in this area. By publicizing its credentials and successes it could raise its profile. Cambashi recently announced ‘Industrial IoT / Connected Applications’ research indicates strong growth as companies go beyond ‘IoT platforms’ by offering ‘Connected Applications’ that are quicker to show business benefits.
  4. Two of 3DS’ three new industry groups – Energy and Materials and Construction, Cities & Territories – are well-established industries with recognized markets. Cambashi believes this is an area with great potential – as shown by its BIM research.
  5. 3DS’ wide range of products and services, and its recent investments such as IQMS, OutScale, Medidata and BioSerenity, mean that it can provide complete solutions, globally, in a wide range of industries. Large, complex, end-to-end solutions that demand business transformation require high-level services, so 3DS’ decision to partner with and train up C&SIs to deliver these services should facilitate growth in this area.
  6. Cambashi’s reading of the market is that strongest short-term demand is for ‘packaged solutions’ that are easy to install and use; 3DS knows how to do this and can use that expertise to further improve its performance.

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