PLM Market Projected to Reach $13.4 Billion in 2007, Up 8%

Dassault Systemes, UGS, Autodesk, PTC Projected to Lead Market

Cambridge, MA, April 24, 2007 � By Daratech�s most recent estimates, spending on PLM software and services topped $12.3 billion in 2006, up 8% over 2005 due to strong investment by large and small enterprises in technologies that foster innovation. Looking ahead, we project the PLM market to reach $13.4 billion in 2007, up 8% over 2006. These projections, however, may change as companies announce 2007 quarterly earnings and begin to absorb their acquisitions.

2006 was a year of tremendous change in the makeup of the PLM market. The following transactions closed or were begun:

ANSYS (#2 in overall CAE and #3 in CFD) bought Fluent (#1 in CFD), creating the #1 player in CAE for 2007 and extending the lead in CFD Dassault Systemes (#2 in PDM) bought #6 MatrixOne, to strengthen its position at #2 Autodesk bought Alias Altair Engineering bought Mecalog PTC bought Mathsoft And other smaller acquistions... All of these deals brought each of the acquiring companies significant challenges. Integrating product lines and staff, sorting out back office issues and the like is taxing and can distract management. This period of uncertainty can also lead to a temporary slowdown in revenue as clients wait to see what will happen to their favorite products and staff. But from an overall market perspective, these acquisitions also caused market growth to slow where no real slowdown is evident: US accounting rules require acquiring companies to write off part of the deferred revenue that had been on the books of the acquired companies.

Even so, it was a good year: the PLM market as a whole (defined by Daratech as the market for mechanical design solutions and the data management solutions that control and monitor this data), grew around 8% over 2005 and now totals $12.3 billion. Buyers understand the need for and benefits of what was traditionally called CAD/CAM, adding significant analytical and advanced visualization component even at the designer level. Too, buyers at many levels within the economy are investing in these solutions, branching outwards from both the traditional automotive/aerospace strongholds to new verticals and from the global 1000 companies to the smaller and medium-sized business.

Daratech forecasts a 12% compounded annual growth rate for 2007 to 2010. Daratech believes the PLM market will grow due to a high adoption rate of new users and thanks to new functionalities for which consumers will be willing to pay a premium.

About Daratech

Daratech, Inc. is a leading provider of information technology market research, advisory and strategic consulting services, and executive-level conferences for manufacturing, engineering, construction and plant operations. Established in 1979, Daratech specializes in PLM, CAD/CAM, digital product simulation (CAE), PDM/EDM, AECO PLM (architecture, engineering, construction, operations, plant lifecycle management), document/enterprise content management, GIS and related areas.

www.daratech.com

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