From the April 2001 edition of Engineering Automation Report, engineering business analyst Evan Yares takes a close look at RAND Worldwide.
By Evan Yares
Some companies are hard to pigeonhole. Take RAND Worldwide. The company’s roots go back to the days of time-sharing services, where engineers would pay to get dial-up access to analysis programs. Later, it became a CAD reseller, and then, in the last few years, it has transformed into a worldwide provider of engineering software and tools. Today, even with annual revenues exceeding CDN$420 million, over 1,200 employees, over 100 offices, and subsidiaries around the world, RAND may look very different, but its fundamental values are the same as in the beginning.
The value that RAND holds dearest is something that a lot of companies in this industry could learn from: “Technology changes, relationships last a lifetime.” In the case of RAND, those relationships include over 40,000 customers. RAND may have a broad portfolio of products and services, but its biggest asset is its portfolio of strong customer relationships.
Unlike other major engineering software suppliers, RAND has no channel problems. It isthe channel. A big part of its business comes from reselling Pro/ENGINEER (and, through its subsidiaries, AutoCAD and CATIA). But RAND goes beyond the typical reseller model. It’s more like a systems integrator, offering services, training, and other software products as part of a complete package. In those areas where there are strong existing products, RAND becomes a reseller. In those areas where there are no dominant products, RAND often develops its own. This hasn’t been a bad strategy: In 1999, RAND sold its ModelCHECK program to PTC for US$20 million.
Life Beyond Pro/E
Though RAND has been known primarily as a master distributor for Pro/ENGINEER, it has, in the last couple of years, expanded its business substantially, either launching or acquiring a number of disparate businesses:
Engineering.com – This is a general engineering web portal, aimed at providing a large variety of articles, references, software tools, and directories of interest to many engineers. Billed as “The Engineer’s Ultimate Resource Tool,” it is an ambitious project. Currently, only the mechanical engineering part of the site is fully populated, and it too is a work in process. The eCommerce portion of Engineering.com includes most of the products sold by RAND or its subsidiaries, including Pro/ENGINEER, AutoCAD and CATIA. (It’s unlikely that many have ordered CATIA seats at $25,000 each through Engineering.com.) Though managed by the same folks who run RAND, Engineering.com is actually a separate company, traded on the Canadian Venture Exchange.
TransCAT – A reseller and software developer, TransCAT sells CATIA and ENOVIA through offices in the USA, Canada, Japan, and Germany. TransCAT also developed Q-Checker, a quality control program for CATIA models that was recently licensed for worldwide use by DaimlerChrysler. EADS Airbus also just purchased 300 copies for use on the new A380 aircraft project, and is asking its 100 suppliers to use it as well.
IMAGINiT Technologies – In the past year, RAND has bought some interesting AutoCAD resellers. The
current stable includes Ketiv Technologies (Oregon/Washington), Newton CADesigns (Singapore), Technical Software (Ohio), CAD Resource Centre (Canada), CADD Development (Florida), AI Systems (Utah), CAD/CAM Tools (Illinois), Aurbis Technical Centre (Canada) and Fusion West (Denver)—all healthy, well-respected companies. Many sell AutoCAD’s full line of products (including Inventor). This initially seperate dealer group has recently been
formed into IMAGINiT Technologies, headed up by Greg Malkin, a well-respected veteran of the AutoCAD
dealer channel. IMAGINiT immediately becomes the second largest Autodesk reseller organization in the
world, behind Avatech Solutions. That may change soon, however, as RAND continues to acquire other
Autodesk resellers. Patrick Schutte, the manager of channel sales at Autodesk, sees this as a natural evolu-
tion and maturing of the channel. Though Autodesk is not showing any favoritism towards IMAGINiT over
other resellers, it doesn’t take much imagination to see the value in a truly global Autodesk reseller.
RAND Technology Group – This newly-formed independent technology development division in West Cork, Ireland, has 30 developers working on a variety of projects, including tools that are complementary to Pro/ENGINEER, CATIA and Autodesk products. It’s also building stand-alone applications and non-engineering-oriented products, including automation, eBusiness and enterprise solutions.
IT Solutions – Based on the theme of providing customers what they need, RAND has set up a dedicated IT systems and consulting business. The IT Solutions group provides consulting, maintenance, training, hardware and software support, focusing particularly on data storage, Internet and process automation.
ASCENT – This group designs, develops and produces learning tools for Pro/ENGINEER, CATIA and Autodesk products. ASCENT develops education programs, incorporating instructor-led and technology-based tools. Again, it’s a natural extension based on providing customers what they need.
PROCISION Analysis – Potentially offering a breakthrough in analysis, PROCISION is a meshless
structural analysis tool that is integrated into the Pro/ENGINEER environment. PROCISION uses a new
mathematical technique capable of directly calculating very accurate analysis results using precise solid
models. This differs from traditional FEA programs, which subdivide the surfaces of models with meshes.
Is It Working?
Like many companies in the CAD space, RAND has found itself getting a bit less respect than it deserves. But RAND has the additional baggage of being a reseller, with a good portion of its revenues based on reselling other companies’ products. The company has excellent products, strong services, and a loyal customer base. (In the case of some of the AutoCAD dealerships, that customer base goes back almost 17 years.) RAND has another advantage that few companies in this space can claim: it’s able to profitably service customers of almost any size, from one-person architectural firms up to Fortune 100 industrial giants.
RAND’s challenge is to nurture its relationships with IBM (CATIA), PTC, and Autodesk, while at the same time building sales of higher-margin software and services. RAND’s ace in the hole is its close relationship with its customers. It has achieved a critical mass that would be expensive for any vendor to replicate. With RAND’s clear separation between its AutoCAD, Pro/ENGINEER, and CATIA operations, it’s also unlikely that any of the vendors will be able to claim that their products are being shortchanged. (Interestingly, PTC recently added some new
resellers which compete with RAND; see December 2000 EAReport.)
It’s hard to fault RAND’s execution or direction. The company has delivered predictable financial results, and is keenly focused on its customers. At this point, RAND is the only truly global technology-independent company in this industry, and is definitely worth watching.