PLM Momentum Grows (cont.)
That is exactly what we are doing! This is a truly exciting time for UGS. And this is an exciting time as well for both the PLM industry itself and companies that use PLM technology. PLM methodology and software have emerged as acknowledged critical requirements for companies that want to remain competitive, and we intend to expand the possibilities PLM offers.
According to leading PLM industry analyst firm Daratech, the global market for PLM software and services is expected to grow by a compound annual growth rate of 8 percent through 2007. In that time they also expect the PDM and collaboration segment of the PLM market to grow 16 percent, compounded annually. The opportunity for PLM growth is likewise reflected in a report from AMR Research, another leading PLM industry analyst firm, which shows new product development initiatives - the place where PLM makes its most significant impact - at the top of the list in business users' spending plans.
Of course, you can't benefit from something you don't use, and another recent study shows that those who do purchase PLM software don't hesitate in putting it to use. A Merrill Lynch Survey of 50 U.S. CIOs, published in June 2004, explored 16 categories of software and asked what percentage of each that they had purchased was still sitting on their companies' shelves. In the case of PLM, the rating was an incredible 0%! We believe that's because PLM directly addresses industry's top business drivers: innovation and top line growth, lean processes, re-use of parts and information, strategic partnerships enabled by collaboration tools and the efficiency of a single source for product and process information.
At the UGS analyst event, attended by both industry and financial analysts, members of the media and academic and industry partners, we demonstrated the strength of our momentum in all these areas and our plans for further development and integration of our applications. Several of our clients were also on hand to share their views on the impact of PLM in their businesses. Some of the comments published after the event included:
"On its own for less than a year, UGS has clearly demonstrated its ability to operate as an independent PLM solution provider — delivering product enhancements, revenue growth, and expansion into new markets."
-- Aberdeen Group
"This company has momentum. UGS reports average growth in the past year of 14%, with excellent margins, and an expanding customer base; all very healthy signs in what has been a mixed climate for enterprise software sales."
-- ARC Advisory Group
"This is not your father's UGS! This is a company with a world-class vision of the future, a pumped up management team, and a time-tested product suite that works... and owners committed to growing the business by continuing to invest in its future."
-- Daratech
"A bevy of new products, partnerships and customer wins was unveiled at the meeting. We were most impressed by the new energy of the management and development teams. Short presentations of the status of and future directions for their major product lines... revealed well thought out, but aggressive programs."
-- TechniCom
Our goal, as always, is to lead the industry in terms of technology, quality, innovation, service and speed so that our clients have the best and newest tools to help them lead in theirs.
We are in a sound position to do this. Last week we announced our fourth consecutive quarter of strong year-over-year revenue growth. We've continued to build our component technology strength and commitment to open systems with the acquisition of D-Cubed Ltd. New industry partners like DaimlerChrysler, Visteon, Caterpillar and Renault are signing on to the JT Open initiative. Our new Service Excellence Dashboard helps us constantly measure the pulse of client satisfaction. And this year we are introducing significant new products and updates in component technology, E-factory, Solid Edge, Teamcenter and NX, including on-schedule delivery of NX 3. As CADCAM Net reported in relation to our NX efforts, "UGS is doing the most thorough job of managing the conversion from one CAD system to another that we've ever witnessed."
The analyst conference gave us a chance to show that we have come roaring out of our cage as an independent company. Our vision is larger. Our energy is stronger. Our focus is more intense. And the bottom line is that our most important contribution - the value we deliver to our clients - will continue to grow.
