Future CAD: Download or Dealer?

Published 12 May 2008

Posted by Martyn Day

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Many of the people in CAD dealerships have been selling CAD for many years. While Channel managers and sales folks at the CAD vendors come and go with the seasons, these dealership principles are the main industry constant. The sales of whatever CAD system they have affiliated themselves with puts bread on their tables and hopefully pays their mortgages. These people are business folks that have to take a long hard look at how they can grow their businesses with the least risk and in a controlled, sustainable way. This is typically at odds with the rate at which the CAD vendors want them to grow. Of course it is also possible to grow your CAD dealership through developing more added-value services, or selling additional products, perhaps in a different market segment - but then this does not favour the CAD vendor, as they want to sell more boxes of branded product.

So there is a lot of pressure on dealers at the moment to increase sales, hire more staff and be more aggressive about new-seat business. However, long-term, I see trouble on the horizon. The route to the customer will, in the next 2 or 3 years change, as the old Value Added Reseller (VAR) model will have to sit with Web-based delivery and the ability to order CAD products and services direct over the web. No vendor will talk at any length on how the existing channel and direct downloads will work, yet they are all developing web delivery businesses.

It all boils down to the value that the vendors see in having an experienced channel and the revenue they want to give to these dealers in an increasingly web-delivered world. Perhaps being a big dealer, with many expensive sales staff, will be a disadvantage in the future? Can the dealers trust the vendors to look after their interests?

Comments:

My thoughts on why a VAR network is needed can be found here: <BR><BR>http://jonbanquer.blogspot.com/

Posted by Jon Banquer on 01 January 1970 at 01:00 AM

I was a CAD reseller from 1983 until 1996.<BR><BR>From a reseller perspective, the first question has always been whether a vendor offers a business case to resellers. The second question has been whether the vendor will live up to their commitments.<BR><BR>I have a friend who was an educational rep for a large CAD company. They pulled his contract just as he was about to renew the contracts with his major clients. It cost him $185,000 a year. And there was nothing he could do about it. <BR><BR>Fortunately, however, the educational sales boss at that vendor made his numbers for that quarter, and likely got a healthy incentive bonus.

Posted by Evan on 01 January 1970 at 01:00 AM

As a Novedge founder I strongly believe that the future of CAD sales is going to be mostly online. Traditional resellers will not disappear as long they will be able to keep a strong technical background and to provide a real service to their customers. Everybody else in the reseller business will gradually be swept away by the constant market trend to lower prices and reduced margins. Customers are learning the hard way that buying mid or low range CAD software from brick and mortar resellers doesn’t entitle them to tech support or training anymore. Then why not buy online and save?<BR><BR>We should also consider that the number of technically savvy users is increasing. These are CAD users that are comfortable buying online and saving and are not stopped knowing that the online reseller can be several hundred or a few thousand miles away. They feel comfortable also thanks to the growing number of online users’ communities and resources. The web is replacing traditional resellers as a source of technical information and training. <BR><BR>One important contribution to this trend comes from the CAD systems themselves. They are gradually becoming more user-friendly: easier to install and to use. The learning curve is getting less steep and can be made even smoother with online training and training DVDs purchased online at an affordable price. <BR><BR>Except for large enterprises, who needs a traditional local reseller anymore?

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Even if the battle may continue between Download and Reseller, <BR>Future Downloads may pick up since right from the time of purchase (Credit Crad) to the learning of the tool (E Learning) the process is more secured. The customer need not go to the reseller place to know the procedure and also the time spent on getting the price quotation is greatly reduced, further if any problem arises the customer can still visit the online forums to get an immediate reply. If the reseller needs to break the shackles, they need to adopt newer technologies. Time will promise those who adopt to new environment quickly.

Posted by Sunith Babu on 01 January 1970 at 01:00 AM

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