New Opportunities for Uncertain Times Congress - The Business of Design and Engineering:  It's the Economy, Stupid! New Opportunities for Uncertain Times

Agenda COFES 2009 Engineering Software Market Survey User perspectives Joint survey Cyon market study (preview) User perspectives Discussion on threats and opportunities

Scope Impact of the Economy on Companies Impact of the Economy on Market Outlook for Smaller Vendors When will the Recovery Come?

Executive Summary

Research Process Survey of 1,000 engineering software market participants Customers (users of the software) 682 Vendors 121 Channels 107 Press/Analysts 24 Other 65

Research Intent The survey is intended to discover market sentiment Survey represents respondents’ opinions about the market The intent is to drive a deeper conversation at COFES on the threats and opportunities arising from the current market economy

Useful Definitions Customer - a firm that uses software design tools Broad Vendor - (broad suite) - a software company that offers a broad range of solutions Targeted Vendor - (targeted solutions) - a software company that offers one (or a few) best of breed tools Channel - a firm whose primary role is to deliver products and services to customers, but not a software vendor Press - publication or blog Analyst - market or industry analyst

Economic Impact Which of the following best describes the impact of the current economy on your 2009 business performance? (select one)

Who is Suffering Most? Percent of customers experiencing “severe negative impact” by type

We are all in the Same Boat Percent of customers experiencing “moderate negative impact”: Most common answer across all categories Bell shaped curve around this choice

Impact on Market Which of the following (if any) do you believe will describe the most likely characteristics of the engineering software market by this time next year? (select all that apply) Note: Others = Oracle/SAP or other, non-traditional engineering software firms

Outlook for Smaller Vendors What do you believe will be the most common impacts of the economy on specialty application providers, startups, or other smaller vendors? (select all that apply)

Smaller Vendors More Optimistic   Customer Broad Vendor Targeted Vendor Channel Go out of business 23% 26% 15% 21% Get acquired 19% 28% 16% 20% Struggle, but survive 51% 39% 63% 54% Continue with business as usual 5% 4% 3% Invest more heavily 2% 1% Targeted vendors don't think they are going away Bigger vendors think they will be acquired (by them, I assume?) Bigger vendors are the most pessimistic about specialists, customers disagree On the other hand - few believe it's "business as usual"

When Will We Recover? What is your best estimate of when the engineering software market will recover (to approximately 2005-2007 levels)? The majority say 2-3 years

Vendor Execs More Optimistic than Customers

What’s Happened Hold all new acquisitions – 25% Delay acquisitions in Progress – 19% Cancel acquisitions in progress – 14% A random walk through visual messages Copyright 2008, Cyon Research Corporation 16

What’s Happened Discontinue Software Maintenance: For unused seats – 22% Selectively – 15% Across the board – 8% A random walk through visual messages Copyright 2008, Cyon Research Corporation 17

What’s About to Happen Hold all new acquisitions – 8% Delay acquisitions in Progress – 7% Cancel acquisitions in progress – 5% A random walk through visual messages Copyright 2008, Cyon Research Corporation 18

What’s About to Happen Discontinue Software Maintenance: For unused seats – 7% Selectively – 7% Across the board – 2% A random walk through visual messages Copyright 2008, Cyon Research Corporation 19

Overhang Hold all new acquisitions – 31% Delay acquisitions in Progress – 35% Cancel acquisitions in progress – 33% A random walk through visual messages Copyright 2008, Cyon Research Corporation 20

Overhang Discontinue Software Maintenance: For unused seats – 27% Selectively – 37% Across the board – 23% A random walk through visual messages Copyright 2008, Cyon Research Corporation 21

The Good News Use the slow time to jump forward on engineering IT projects, but within the current budget 15% 12% 27% New spending for strategic advantage against competition 10% 11% 35% A random walk through visual messages Copyright 2008, Cyon Research Corporation 22

New Opportunities for Uncertain Times Congress - The Business of Design and Engineering:  It's the Economy, Stupid! New Opportunities for Uncertain Times