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The History of CAD

In 1996 Intergraph also released a 3D CAD software product on Windows similar to SolidWorks. Intergraph's SolidEdge product was based on Spatial Technology's ACIS kernel modeler (in fact the very first prototype of SolidWorks had also been based on ACIS but Spatial refused SolidWorks' licensing proposal) and was launched in a bid to enhance sales of Intergraph's high-performance "TD" 3D graphics PCs. After some successful sales and reviews the SolidEdge business was acquired by EDS-Unigraphics in 1997 shortly after Dassault-Systemes acquired SolidWorks.

Meanwhile Autodesk had become increasingly concerned at the prospect of their much vaunted million-plus 2D CAD software users being wooed by SolidWorks, SolidEdge and other full-function 3D CAD software programs on Windows from Bentley Systems, CADKEY and numerous others. In 1996 Autodesk released Mechanical Desktop which was their first full-function 3D solid modeling CAD software product and which rapidly became the #1 selling 3D CAD software product in the world.

In 1997 Computervision, which had been steadily declining throughout the decade, also attempted to gain a position in the PC 3D CAD software market with the release of its DesignWave PC 3D CAD software based on EDS-Unigraphics' Parasolid kernel modeler.

General Motors' 1996 decision to standardize on Unigraphics followed by Ford Motor's 1997 decision to replace its internally developed PDGS CAD software with SDRC's I-DEAS 3D CAD software were the last of the "great American corporate CAD software deals" and the end of the era of internally developed CAD systems started back in the 1960s. It also marked a new phase for the CAD software industry as it was clear that:

the boom years of relatively easy and fast growth were over, the increasing lack of differentiation at the CAD software technology level were making competition more difficult and expensive, the downward pressure on 3D CAD software revenues caused by fierce price/function competition from the Windows 3D CAD vendors was reducing the value of pure CAD software sales.

The leading CAD software vendors needed to diversify and PDM provided them with the opportunity. Throughout the mid 1990s the PDM market had been growing at >20% per year to ~$1.1billion revenues in 1997. The market was predicted to more than double in the next 5 years and the leading CAD software vendors only held single digit shares of it; it was inevitable that they would turn to PDM systems for future growth.

1998 was the year in which DEC, after a decade of struggling to regain its glory of the 1980s, was acquired by the "PC clone" maker Compaq. The message that DEC's acquisition sent across all software markets, including the CAD software market, was in a sense confirmation of what was already a well established fact: if it did not run on Windows then it probably did not run. The market had come a very long way in just two decades.

The CAD software market in the late 1990s was marked by three main developments, each of which was driven by the basic premise that it was no longer possible for the leading CAD software vendors to compete and grow simply on 3D CAD software revenues. The three developments were:

acquisitions and consolidation, the rush to gain share in the PDM market, the stampede to become "Internet enabled".