11 March 2014
Delcam/Autodesk – biggest ever CAM industry news?
Andrew Allcock places the Autodesk acquisition of UK CADCAM specialist Delcam in context and explains how the two successful software firms will work together
The biggest news in the CADCAM industry. That's how the acquisition of the UK's Delcam by US-headquartered Autodesk Inc is described, admittedly by one of the participants. But that is not to say it is being oversold.
Autodesk has paid £172.5 million to acquire Delcam. It is, says the Birmingham-based CADCAM expert's president, Clive Martell, "The largest acquisition in the history of CAM." He is comparing it with the recent Battery Ventures' Planit/Vero/Sescoi and the Cimatron/GibbsCAM acquisitions, around 30% and 5% respectively of the Autodesk/Delcam deal, he points out.
Autodesk's 2013 (year to 31 January 2014) revenues topped $2.3 billion (£1.38 billion) from its 7,300 employees, while 600-employeer Delcam's 2012 turnover was £47.1 million (first half 2013, £25.0 million). And that 2012 Delcam performance is, highlights Mr Martell, better than that of the above mentioned competitors and well distributed around the world – 52% in Europe, 25% in Asia and 24% in the Americas.
Delcam can trace its roots to the 1960s and the very birth of what we take for granted today – the computer-based manipulation and virtual machining of 3D shapes (see box, p20). And that remains its focus today, as Mr Martell highlights: "We don't mind which industry our customers are involved with; we look to help them with their challenges in manufacturing 3D shapes, either directly or via tooling."
Autodesk, which was established in 1982 by John Walker, a co-author of the first versions of AutoCAD, the company's flagship computer-aided design (CAD) software, was established to exploit the power of the – new at the time – PC market.
So what is Autodesk's reason to acquire Delcam and what makes it so valuable to its American suitor? Well, on the latter, says Delcam's president, it's the team at Delcam. And that collectively means "the largest CAM development team anywhere in the world" that has produced "world-class products", which are created with reference to its own in-house machining/ manufacturing operation (it is the only CAM company to undertake in-house manufacturing), and which are successfully implemented in the field by its support and installation teams, thus making Delcam an "enormously strong brand that is known internationally in all of the main markets".
The company is often to be found fronting or heavily involved with leading-edge research projects in the UK and Europe, as a browse of Machinery's website and page 8 of this issue will show. Additive manufacture and robot machining projects are just two of the more recent ones, but the company has been a regular in the pages of Machinery over many years with its developments. This all alludes to the company's R&D effort, which sees 25% of turnover invested: a figure that, happily, coincides with the Autodesk spend, observes Mr Martell.
So it is, perhaps, not surprising that Autodesk is not going to tamper with this successful model. Delcam will operate as a wholly-owned, independently-operated subsidiary of Autodesk, with no significant changes planned for the business – "reflecting Autodesk's trust in Delcam's solutions, leadership and organisation," offers Mr Martell. Delcam and Autodesk will share technology and expertise where this will benefit customers, while Delcam's marketing will benefit from Autodesk's long history of making technology accessible to large audiences, he adds.
From the Autodesk side, this acquisition represents a further strengthening of its manufacturing activities. The company was, explains Buzz Kross – senior vice president, design, lifecycle and simulation – CAD-focused up until five years ago, when it started to add analysis tools (computer-aided engineering – CAE) and data management (product lifecycle management – PLM). "About two years ago, we decided to get very serious about manufacturing engineering and it took us about two years to select the right partner, which was Delcam, to drive a most important part of the manufacturing segment – NC machining."
Prior to the acquisition, manufacturing represented 25% of Autodesk's revenues, but Mr Kross highlights that the global manufacturing software market is around $21 billion, with about 45% of that the production end of the manufacturing market – meaning software like Delcam's.
THREE MAIN ELEMENTS
And in selecting Delcam, Mr Kross says there were three main elements. Number one, it was the people, whom he describes as "the best in the industry", the brand was "huge", while the company's technology in NC machining is strong. On the last, he reveals that Autodesk didn't know too much about the company's other technology outside of NC machining, in fact, but he sums it up, saying: "We think we have added an excellent component to design, analyse and produce components in the Delcam solution," adding that the decision to buy was "really easy". And underlining the Birmingham company's strength, he emphasises that Autodesk has never before operated an acquired company as a wholly-owned subsidiary. "That means the Delcam distributors and sales team will still sell Delcam products, they won't sell Autodesk, and vice versa. So for the customer, it still feels like the same relationship. But there are areas where the two can cooperate to solve a bigger range of problems and that will grow as years move on."
The pair have common customers, of course – Delcam's inspection software and clay milling technology are used for car body work by the same automotive firms that employ Autodesk's Alias software for body styling. In similar vein, Delcam's toolmaking customers are also users, or potential users, for Autodesk's Moldflow software.
But while Delcam is said to be an important NC toolpath generation acquisition, it is not Autodesk's only such manufacturing software acquisition. In 2012, the company purchased HSMWorks ApS, a CAM milling toolpath specialist, based in Copenhagen, Denmark.
This software, as CAM 360, is made available via the company's cloud-based Autodesk 360 product offering, of which Mr Kross says: "We see the cloud as being the same sort of shift that got Autodesk started. The move from Unix to PC marked a big shift and let us jump ahead of the market. The cloud offers amazing value for customers, since they don't have to download or install software, while their data follows them anywhere in the world. We think it is the next revolution coming to engineering." And he adds that it offers the benefit of high powered computing for processing very large NC toolpaths, for example, with Delcam software availability in the cloud described as "likely".
HSMWorks was and continues to be an integrated SolidWorks package – SolidWorks is an Autodesk competitor. It's similar in the case of Delcam, which also offers an integrated CAM package for SolidWorks – Delcam for SolidWorks. Both companies' CAM packages are also integrated into Autodesk Inventor CAD software, too, however. And this highlights the relaxed attitude Autodesk has to healthy internal competition. Delcam can sell its SolidWorks solution, but Autodesk will compete for business against it at the user end.
Immediately for customers of Delcam, then, things will appear much the same, but Mr Kross does emphasise that the two companies will see many ways to work together. In fact, the challenge, he says, is that the company will see "too many ways to work together, so we will need to be very deliberate how we connect these tools up", but, ultimately, "it will make a big difference in the way our customers work".
At a detailed level, Carl White – senior director, manufacturing and engineering products, design, lifecycle and simulation -– says that there has already been discussion regarding how the two might share software algorithms or how tool library development might be undertaken to allow companies to move more easily between CAM packages. "For us, this [acquisition] is a very big deal," he concludes.
So, yes, it does indeed seem to be the biggest ever CAM?industry news, but just now it will be hard for users to see any outward sign that it is.
A near-50-year journey for Delcam.
In 1965, Donald Welbourn, director in Industrial Co-operation at Cambridge University, had the vision to see the possibility of using computers to assist mould tool pattern makers in solving the problems of modelling complex 3D shapes. At that time, only crude 2D drawing systems were available, using terminals linked to large main-frame computers.
Initial work was sponsored by the UK's Science Research Council, but funding was difficult and, in 1973 Mr Welbourn persuaded his friend Lord Caldecote, then chairman of the Delta Metal Group and an ex-Cambridge engineer, to send Delta graduate engineer Ed Lambourne to work on the development of DUCT at Cambridge University Engineering Department, ultimately leading to the transfer of the system into industry.
In 1974, Mr Welbourn also obtained sponsorship from Control Data in Europe, in the form of access to their powerful time-sharing computing resources. Control Data offered DUCT initially on its time-sharing bureau service, especially to two of its largest German customers, Volkswagen and Daimler Benz.
In 1977, a new department called Delta Technical Services was formed in Birmingham to continue research, but it remained difficult to justify the technology, as computers were slow and expensive, and the available software had few automatic features, although it was straightforward to use.
In 1982, mini-computers with much more power at lower cost started to appear and, by 1984, the technology was becoming competitive with traditional methods. While aircraft had been designed using computers for many years, it was becoming possible to economically design saucepans and other domestic products having complex 3D shapes, using computers.
When Mr Welbourn retired in 1983, DUCT development continued at Cambridge, together with the small team established at Delta in Birmingham. By 1984, the Birmingham team was larger than that at Cambridge and the unique features of DUCT began to be recognised. It was one of the very few systems developed from the beginning to design and machine products. The equal emphasis on design and machining made it different from its competitors, and this was appreciated by the users. Most other systems had developed 2D drafting first, followed by 3D modelling, with machining added later.
Since 1977, the demonstration activity at Delta had gradually been developed, with additional machine tools being installed and a subcontract programming service being added. This was now a separate commercial activity, which by 1985 employed 15 people. This direct practical experience was very helpful in defining needs and proving solutions.
In 1989, the company was bought from the Delta Group in a management and employee buyout led by Hugh Humphreys. The company was renamed Delcam International in 1991 and changed its status to plc. A move to a new purpose-built building in Small Heath, Birmingham, was completed in October 1991, where the company continues today.
In July 1997, Delcam plc was floated on the Alternative Investment Market (AIM) and, apart from developing software, Delcam has acquired products in the past few years, including FeatureCAM, Partmaker and Crispin Systems' footwear and orthotics technology.
Finally, on 6 February, 2014, Autodesk Inc acquired the company, with Delcam now operating as a wholly-owned, independently-operated subsidiary of the American software company.
First published in Machinery, March 2014
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