CAD Around the World4 Aug, 2012 By: Heather Livingston
Tech Trends: Software developers set their sights on China, Brazil, Turkey, and beyond as infrastructure investments spur an increasingly global market.
At the end of 2011, Jon Peddie Research (JPR) released its "2012 CAD Report," which estimated the number of active CAD users worldwide to be 19.3 million. Even more remarkable, two-thirds of those users are said to be outside North America. As the United States continues to grapple with the effects of its recession and Europe struggles with its growth-dampening austerity measures, major CAD software developers including Autodesk, Dassault Systèmes, and Bentley Systems are reporting that business is taking off in other regions around the globe. In fact, Bentley reported in March that China is delivering revenue that is tripling every two years (as of 2011), and is poised to become the company's largest market.
In a worldwide market that JPR estimated at $7 billion for 2011, where exactly is the growth occurring, and what work is being undertaken by the occupants of all these new CAD seats?
China and Beyond
Of those 19.3 million global CAD seats, according to JPR, 27% are based in Asia; 34% in North America; and 37% in Europe, the Middle East, and Africa (EMEA). The BRIC countries (Brazil, Russia, India, and China) are growing most quickly.
Indeed, China seems to lead the pack for Bentley as well as Siemens PLM Software and PTC — and as is true for many other emerging markets, it's an investment in infrastructure that is spurring growth. Kathleen Maher, vice-president of JPR and author of the "2012 CAD Report," said, "China is so huge it dwarfs everything. ... For all the growth that they're having, there's a ton of regions and people who are catching up, so there's still a lot of potential in China, and that will probably paint the picture for a while to come."
What's on the horizon aside from China?
One country that's had a surprisingly robust increase in the number of CAD licenses is Turkey. As reported by the Jamestown Foundation in its Eurasia Daily Monitor, China and Turkey now are the world's fastest-growing economies, following the global financial crisis.
The primary reason for Turkey's thriving economy may be its close economic ties to China. "Chinese companies have been increasingly undertaking contracting services in Turkey, including plans for the construction of major railway networks," said Saban Kardas in the article. "As Turkey plans to initiate other multibillion-dollar infrastructure projects, China is increasingly interested in getting a larger share of this pie." Turkey also is contracting with China, Russia, and possibly Japan and South Korea to build three nuclear power plants in Turkey.
In the established U.K. market, Bentley has been the key CAD provider for Crossrail — currently the largest civil engineering project in Europe. Comprising 21 kilometers of twin-bore tunnels under central London, it will link 37 commuter rail stations.
Russia, too, is getting in on the infrastructure action. In early March, Siemens delivered the Petersburg, the first of Russia's 38 scheduled Desiro RUS regional multiple-unit trains.
Hans-Jörg Grundmann, CEO of the Siemens Rail Systems Division, explained, "With the embarkation of the first Desiro RUS, we have passed another major milestone for this contract. By 2013 we will deliver another 37 complete trains of this type. From 2013, we will manufacture another 16 vehicles on the basis of increasing localization, for example in Yekaterinburg, where we are currently investing around €200 million in the construction of a factory. This will strengthen our position in this country as the most successful non-Russian railway technology provider."
In addition to its presence in Russia, Siemens also was recently named the top product lifecycle management (PLM) provider in India. According to Dataquest magazine's Top 20 report released last year, the PLM market in India registered a robust growth of 22% during 2010–2011, with an overall market of $140 million. According to Siemens, Indian enterprises are going global and embracing the concept of "design anywhere–build anywhere." The result is an increase in collaboration among design and manufacturing departments, which leads to increased adoption of PLM solutions across diverse industry segments.
Piracy and Data Security in Emerging Markets
When discussing technology in emerging markets, the issue of piracy must be considered. "There's obviously a lot more piracy in emerging countries, and it drives the software vendors insane, as well it should," said Kathleen Maher, vice-president of Jon Peddie Research.
Alexandra Constantine, a public relations specialist at Autodesk, concurs. "In terms of piracy, like all software companies, our intellectual property is the foundation of our business," she said. "When companies use illegal copies of our software, we lose revenue. Therefore, we work actively to educate customers, students, and the general public about the importance of license compliance."
However, Maher said, piracy is becoming less of an issue — thanks in part to the efforts of higher education. "The people who pirate software tend to be pretty low on the scale in terms of the work that they're doing," she explained. "But the people coming out of school and newly educated tend to go into more complex use of CAD for design and for analysis, and so they have reason to value the software, to pay for it to meet needs, and they want [software] support and education."
Data security continues to be an issue in emerging markets as well. Firms working with contractors in these emerging markets can find it very difficult to maintain IT and data security.
"You see more companies having much tighter control and so, if you have better PLM practices, better [building information modeling] practices, you can have better control of your IT as well," said Maher. Cloud-based computing is gaining attention in this arena because it can allow firms to turn software access on and off, Maher said, improving their abilities to manage not only their software licenses but also their intellectual property.
Maher explained that in the past decade or two, foreign-born young adults might have obtained a university education at home but left to pursue job opportunities in richer markets. Or they might have pursued an education in the United States or Europe, then stayed there to work.
Today, that's happening less frequently, Maher said. Because of the recession, many foreigners trained by U.S. universities and companies are returning home, where there is more potential for growth than in Europe and North America — including more job opportunities.
The trend pays off in many ways, Maher concluded. "If you've got huge construction projects, you would much rather work with somebody that's on the ground with you than somebody [in] another country. ... It's almost like the reverse of outsourcing. Jobs are going home."
New Generation of Design
Another noticeable trend in emerging markets is that students are leap-frogging generations of CAD technology. When new design professionals exit universities and begin their careers, they bring the most current computing skills into the workplace, which leads to a demand that their employers acquire the latest software.
This young workforce also is looking at ways to use technology to effect change on a scale greater than a single building. For example, in preparing to host the 2014 FIFA World Cup and the 2016 Summer Olympics, Brazil is exploring ways to improve its sustainability — as well as its standard of living — through design.
The Brazilian government has announced that all 12 stadiums under renovation for the pending competitions will qualify for LEED green building certification, with its crowning project, the Mane Garrincha, aiming for LEED Platinum status.
The government also has dedicated itself to improving the favelas-barrios, or slums. For example, as reported in the Rio Times, the newly opened Teleférico tramway line at the Complexo do Alemão in Rio de Janeiro has added vibrancy to the city by simultaneously connecting underserved neighborhoods and reducing single-rider transportation.
Maher believes that, in addition to the many developments in Europe and Asia, much of Latin America is poised to enter a boom cycle, with Brazil already leading the charge and countries such as Argentina, Peru, and Chile following on its heels. Colombia, she believes, will offer tremendous growth potential for the CAD market as that country rebounds from its decades of destructive drug wars, and Mexico is primed for a strong — and long-overdue — growth period once it manages to quell its drug and gang influences. Africa will follow this growth, although not immediately, but it is clear that CAD use will continue to trend upwardly for some time to come.