Generative Design Market Share

PTC, the U.S.-based software company, acquired Frustum in November 2018. Frustum, founded in 2014, brings generative design tools to PTC Creo, PTC’s Computer-Aided Design (CAD) software. PTC will embed Frustum’s entire solution into Creo as a kernel with native integration.

Previously, PTC lacked some of the generative capabilities that its leading CAD competitors already had. Autodesk has mastered generative design and owns much of the mind share. Several of Siemens products, including NX, NX Nastran, HEEDS, Capital, and Simcenter 3D generate and validate designs in the context of constraints with a combination of Artificial Intelligence (AI), rules-based algorithms, and Graphics Processing Unit (GPU) processing. Dassault Systèmes brings generative design together with traditional CAD, convergent modeling, topology optimization, physics-based design, and simulation within its CATIA product. Additionally, Dassault Systèmes SolidWorks has an exclusive partnership with DM Labs Live Parts, for generative design software from Desktop Metal that “grows” parts based on the way embryos and cells grow. Even some design engineering consultancies, such as GRM Consulting, offer their own generative design software.

Frustum will only bring a few thousand legacy clients to PTC, but by embedding Frustum’s generative design tools within Creo, PTC will immediately bring these tools to a CAD business that already had consistent double-digit growth over the past couple of years. This will place PTC among the leaders of generative design vendors. PTC will also leverage Internet of Things (IoT) data from ThingWorx and simulation capabilities from ANSYS to ensure buildability or manufacturability for whatever equipment the customer wants to use, whether that means additive, subtractive, or a combination of techniques. It will also include ANSYS’s performance simulation modules. This will empower customers with an unbroken tool chain from the beginning of design through PTC’s Product Lifecycle Management (PLM) software and looping back with IoT data. This feedback loop aims to optimize design and build processes with measured real-world results, and PTC hopes it will lower some of the barriers to adopting additive manufacturing.

The pricing for generative design tools, modules, and products varies wildly depending on the business model, the computing hours, and the brand. For newer, standalone products, subscriptions can cost as little as US$495/year for 10 hours of computing power per month. For larger established brands with a full CAD product, that product with all its modules can cost as much as US$65,000 per year. As a result, ABI Research currently estimates that software with generative design tools brings in about US$3.5 billion for the software vendors, with Autodesk, Dassault Systèmes, and Siemens combining to capture about 79% of that revenue. In 2019, the revenue figure will grow to US$5.1 billion, and PTC introducing Frustum’s tools within Creo will help drive that and could mean a shakeup among the leaders.

As of December 2018, Siemens has about 33%, Dassault Systèmes has about 29%, and Autodesk has about 17% of the market share for software with generative design or generative engineering tools. At the time of the acquisition, Frustum had less than 1% market share. PTC will not file its 2018 annual statement until the end of January 2019, but in its 2017 annual statement, it reported US$475 million in revenue for its CAD products alone. If it makes Frustum’s tools available to all users of its CAD products, PTC will capture 9% of the generative design market share next year. In this case, it will not “steal” market share from any of the other vendors, but will instead grow the overall pie.

Frustum’s tools, and generative design tools in general, empower engineers to reach a final design faster. This ultimately makes them more productive and grows throughput for engineering departments. PTC may have come a little late to the party, compared to the other large CAD vendors, but it chose wisely with Frustum. It still lacks some pieces, such as generative engineering for electrical wiring and accurate costing analysis, but Frustum undoubtedly brings top-level generative design capabilities. But, to meet and exceed the complex demands of many different industries and scale adoption, all generative design vendors need to understand the challenges of the engineers that use their software, set expectations for how the software can help, and provide holistic solutions. Some engineers find it a difficult change to start using generative tools. Vendors should try to avoid disrupting the way engineers work and simply look to provide a tool to make them more productive and reach better final designs faster.

For more insights and perspectives on manufacturing and the Industrial Internet, please check out ABI Research’s Smart Manufacturing service.