Mergers and acquisitions can be a time of huge uncertainty and stress. There have been some spectacular failures as well as success stories in the past. While there are plenty of reasons for an M&A deal to go south or to take off, the only certainty here is change. 

On February 6, 2014, Delcam became part of Autodesk after a takeover. While the company announced that they will continue to operate independently, there have been some changes according to Clive Martell, president of Delcam.

Speaking on the sidelines of the company’s Asian Technical Summit (ATS) at Gyeongju, South Korea, he said: “What they brought to us is some policies and procedures suitable for a larger organisation. We now have a more formal HR setup. We also have a legal person who has joined the management team.”

He was however quick to reiterate that at the company’s HQ in Birmingham, UK, the operation is very much the same and they are still concentrating on their core customer base and developing products for those customers.  

Product Synergies

The period after an M&A deal usually oversees growth triggered by diversification of product range and a larger market share. This is exactly what has happened and according to Mr Martell, this scene will continue to play out in the coming months.

“(There will be) more collaborations around the world. We are making sure that we are providing better interoperability and more integrated solutions,” he said.

One example is FeatureCAM, the company’s CAM software for milling and turning. It has recently been certified by Autodesk Inventor 2015, which allows the software to open Inventor parts seamlessly with no loss of data or concerns about translation errors.

The synergies between the companies’ products do not stop there. Mr Martell said that they will be making some inroads in the automotive design space as they have “good interoperability” with Autodesk’s Alias industrial design software. This is clearly displayed in the complete clay design and manufacturing process using the design software for styling, which can then be followed by machining and inspection on a CMM programmed with Delcam software.

“We make sure we can accept feature information for our PowerInspect software, so that we can improve the inspection processes and make them more efficient. This is the direction we are looking at. But our core developments remain very much  on increasing the functionality.”

The Sensible Approach

Mr Martell revealed to Asia Pacific Metalworking Equipment News that there were other approaches made by other companies in the past and there were plenty of CAM companies in the market for Autodesk to choose from in today’s market. While there were plenty of variables to consider, it came down to which deal made the most sense.

“We looked at Autodesk and we thought it was an excellent fit. There is very little overlap between the product ranges. They have the ambition to expand their product portfolio, from the prototyping area into manufacturing and we felt very comfortable with their approach. If we looked at other big players in the CAD/CAM industry, we might not have felt so comfortable,” he said.

Apart from the complementary product range, there were also other factors at play.

“They have lots of things (to bring on board). They are an organisation much larger than us. They have a lot of expertise in the design side. They also have a very wide range of ways of addressing the market. 

“Communicating with the market is what we can learn from Autodesk. They have enormous ambition to be the leader in cloud related technology and innovator of technologies. These are all areas we can work on. In addition, the technology level, background data processing, infrastructure and software tools they have can improve our products as well,” he said.

The Race Is On

Delcam was ranked the world’s largest CAM-centric software company in staff numbers by CIMdata. With Autodesk now backing them, they look set to consolidate their position on top of the CAM business. However, Vero Software, the CAM focused software business with the largest sales according to CIMData, has also been recently acquired. They were bought by Hexagon, a global provider of design, measurement and visualisation technologies.

With his nearest competitor also strengthening their capabilities, Mr Martell said: “It is true that Vero has growth significantly through a series of acquisitions over recent years. The Hexagon (deal) is their opportunity. Our opportunity is working with Autodesk and their reseller channels.”

When asked if Delcam could come out top in 2015, his response is one that showed a great amount of confidence. Focused only on his own company, he said: “We shall see but we will still continue with the growth aspirations that we have.”

Product Enhancements

The company has announced a slew of product enhancements for its 2015 lineup of CAM products. APMEN asked Mr Martell what his team’s motivation was in some of the enhancements.

“We get whole series of different requests from customers. Half of those requests are often the need for those companies to be more competitive. To be more competitive, they need to increase productivity. We can do that in different ways. Sometimes it can be through providing more efficient ways of programming. Sometimes it is through more efficient cutting strategies. We try to balance these in different releases of the products,” he said.

Staying on products, many might be curious about the destiny of Delcam for SolidWorks, an integrated CAM for SolidWorks, Autodesk’s competitor on the CAD arena.  

“The addition of tombstone machining is the final step of making sure the functionality range of FeatureCAM is matched in Delcam for SolidWorks. We will now keep the product in line with FeatureCAM. It is our plan (to keep Delcam for SolidWorks) and Autodesk is very happy with that,” he said.

In any union, mutual benefits for both parties are important for the relationship to survive. While there may be changes or uncertainties ahead, the early signs for this particular combination of CAD and CAM are certainly good and this can only be good news for the CAD/CAM industry. 

Asia To Grow Again APMEN spoke with Chai Kok Hoe, ASEAN business development manager of Delcam, who feels Southeast Asia is ready to grow with an excess of 15 percent in 2015.    (L-R) Chai Kok Hoe, Y Bambang Nugroho (MD Delcam Indonesia), C W Chung (MD Delcam Malaysia), Ram Morgan Ranganathan (sales manager Delcam Malaysia), Buranang Suksamitti (MD Delcam Thailand) and Sandy Moffat (Asia business development manager). In charge of the company’s business development activities in Indonesia, Malaysia, Singapore, Thailand, the Philippines and Vietnam, Mr Chai is the best person to ask as far as the company’s fortune in Southeast Asia is concerned. By the looks of it, he is quite happy to leave 2014 behind where demand has been a little weak due to many external pressures and he looks forward to a better 2015.   “We want to achieve growth and we have placed a high target for our partners. The range is 15 percent. With this acquisition (Autodesk acquiring Delcam), we hope to get even more,” he said. In addition, he feels regional stability is important and that things are finally beginning to look up. “Now the situation in Thailand has cooled down and business is picking up. In other countries, the business is picking up as well,” he said. Using the Philippines as an example for this optimism, he added: “For the CAD/CAM market in the Philippines, they are still using very simple software, but the market is receptive. We need to guide them and tell them the difference.” While he predicts a better 2015, the obvious caveat here is stability in the region and elsewhere in the world. He singled out Europe and the Middle East as important for manufacturing. Finally with a new alliance with Autodesk, he told APMEN that they will get involved in some joint events with a specific industry focus. He said that in Thailand, they are looking to organise something relevant to the automotive industry, where he is particularly keen to promote the area of clay milling with PowerInspect. He is also keen to boost sales of the shoe design suite in Vietnam and Indonesia. Finally, for Singapore, he hopes to organise events related to the aerospace industry.

Marketing: It’s All About Opening Doors Peter Dickin, the marketing manager at Delcam, talked with APMEN on the ATS and his company’s marketing strategies.    Marketing is about opening doors, it is about creating awareness and enabling sales. Well aware of his role at the company, Mr Dickin has been playing a big part in creating brand awareness, especially in Asia with the ATS. Since its inception back in 2001, ATS has been described as “working well” and differs only slightly from its original format, with the main change being Delcam’s expanded software portfolio. According to him, not only is it a good marketing tool, it has financial merits too. “There was an exhibition that flew journalists in for a preview. I thought it was a good idea. Instead of chasing around for them, we could give them an event and give them plenty of materials. It is quite a cost effective way to get everyone together,” he said. In addition to hosting their own events, Mr Dickin believes trade shows are also the way to go. “Exhibitions are a big part of our marketing strategy. IMTS (2014) was hugely successful. It was the busiest for a number of years. There were a lot of enquiries,” he said.  These enquiries or leads are what marketing is all about.   “At the end of the day, you’ve got to get leads. This is what you want from all your marketing people. They are supposed to let your (sales people) through the door for you to show what you can do,” he said. This drive for leads has also brought about a new company website. For Mr Dickin, a new website is a continual exercise to keep things fresh. “It is the same with everything. When people see the same things they get a little bored. There are more materials and it is easier for people to find (information),” he said. “In addition, more people are using tablets or mobile devices. We need something that works well with a smaller screen.” Judging from the numbers provided by Mr Dickin, it is a venture worth taking. The company’s website has garnered some 500,000 page visits a month and it goes up 100,000 per month year-on-year. He attributed this to more people having access to the Internet in Asia and more people using the website as a research tool.