Based on CIMdata estimates, the worldwide CAM software and services market declined by 6.1 percent in 2001, but it is expected to increase by 7.4 percent in 2002. End user payments for CAM software and services are estimated to have fallen from $1.27 billion in 2000 to $1.19 billion in 2001. A rebound to $1.28 billion to recapture the lost ground is forecast for 2002. This information is contained in the CIMdata NC Software and Services Market Assessment Report recently released by CIMdata.
The downturn in worldwide manufacturing activity was the primary cause of the downturn. Manufacturers generally scaled back on capital expenditures and spending for new technology implementations, including CAM software. The drop-off in manufacturing activity was the most acute in the United States, and this led to a significant fall in CAM software purchases. On a worldwide basis, Japanese expenditures were flat and European purchases were less than expected, but some countries, such as China, continued their aggressive expansion.
The U.S. CAM software market was impacted by two major events: a major reduction in machine tool purchases and a continued slowdown in the mold, tool and die industry segment. As reported in Modern Machine Shop in April, the purchase value of new machine tools in the United States fell by 21 percent in 2001 as compared to 2000. This continues a trend in declining machine tool sales that began in 1997. Since CAM software is primarily employed to program machine tools, the decline in machine tool purchases has a direct effect on the purchase of NC programming software.
Further, the mold, tool and die industry segment is critical to the sale of NC programming software; approximately half of the purchase value of CAM software comes from this industry. In 2001, manufacturers reduced purchasing activity, and more work was moved to offshore locations. The NTMA estimates that U.S. mold manufacturers suffered a 20 percent decline in 2001 sales from 2000 levels, and tool, die and fixtures firms experienced a 15 percent drop in their revenues during 2001. This industry has not been healthy for a number of years, and the trend is likely to continue. As U.S. mold, tool and die manufacturers continue to struggle, they tend to purchase less CAM software.
However, CIMdata has forecast that the worldwide CAM market will increase by 7.4 percent in 2002 to effectively return to the level experienced in 2000. This is predicated upon an improvement in worldwide manufacturing activity that results in increased spending for capital equipment, technology implementation and CAM software. As one key component, the NTMA forecasts that the mold business and the tool, die and fixtures segment will grow by 7 percent to regain some of the loss suffered in 2001. If a turnaround does occur, this will be welcome news for CAM software producers and vendors.
For 2001, CIMdata estimates that EDS PLM Solutions was the largest CAM software vendor based on vendor revenues, as its sales exceeded $100 million for the first time. This is partly due to the acquisition of SDRC. CIMdata believes that the next largest vendors in 2001 were IBM/Dassault, PTC, Hitachi Zosen and Delcam, which rounded out the top five suppliers in this market.
CIMdata further estimates that Missler Technology, a French firm, was the most rapidly growing vendor in the CAM software market in 2001, with 17 percent growth during 2000. This, again, is partly the result of an acquisition; Missler acquired CNN Industries, another French NC software supplier. The next most rapidly growing vendors were Vero International, EDS PLM Solutions, DP Technology and Delcam. It can be noted that EDS PLM Solutions and Delcam were the only two companies listed among both the five largest vendors and the most rapidly growing vendors.