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Industry Knowledge for Business Advantage© 2011 Cambashi Limited
International Business Update
Tony Christian
Director, Cambashi
www.cambashi.com
COFES 2011
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Global Economy – Factors
2
Commodity Prices
Food Prices
Political turmoilOil prices
Trade deficits
Sovereign debt
Japanese tragedy
Inflation
QE
Stimulus packages
Financial system unknowns
Eurozone tensions
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
International Business Update - Agenda
3
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
International Business Update - Agenda
4
Introduction
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
International Business Update - Agenda
5
Introduction
Tracking The Technical Applications Software Market
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
International Business Update - Agenda
6
Introduction
Tracking The Technical Applications Software Market
What is the Market Looking Like?
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
International Business Update - Agenda
7
Introduction
Tracking The Technical Applications Software Market
What is the Market Looking Like?
The Wider Picture - Black Swan Spotting
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
International Business Update - Agenda
8
Introduction
Tracking The Technical Applications Software Market
What is the Market Looking Like?
The Wider Picture - Black Swan Spotting
Manufacturing Matters – More Than Ever
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
International Business Update - Agenda
9
Introduction
Tracking The Technical Applications Software Market
What is the Market Looking Like?
The Wider Picture - Black Swan Spotting
Manufacturing Matters – More Than Ever
Summary
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
International Business Update - Agenda
10
Introduction
Tracking The Technical Applications Software Market
What is the Market Looking Like?
The Wider Picture - Black Swan Spotting
Manufacturing Matters – More Than Ever
Summary
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Cambashi
11
Founded in 1984 in Cambridge, UK, US subsidiary opened Boston, MA in 2008
Worldwide network of associates
Studying the use of IT in industry
Business reasons for IT investment decisions
Technology that addresses these issues
Market mechanisms that bring users and vendors together
Impact of deployment of applications and infrastructure
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Cambashi Market Observatories
Expenditure and forecasts by
Geography
Industry
Technical application segment
• AEC
• GIS
• Manufacturing
• Other
Revenues by vendor
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
International Business Update - Agenda
13
Introduction
Tracking The Technical Applications Software Market
What is the Market Looking Like?
The Wider Picture - Black Swan Spotting
Manufacturing Matters – More Than Ever
Summary
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Supports tasks using engineering, scientific and
creative knowledge. Includes PLM, CAx, BIM, GIS,
imaging, visualization, ...
Excludes commercial apps - purchased from financial
operations budget
Excludes plant-floor apps – purchased from plant
operations budget
Excludes office productivity apps – purchased from
administrative budget
Technical Applications Software
14
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Country Observatory
Product Observatory
Industry Observatory
Employment Observatory
Cambashi’s 4 Views of the Market
15
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Country Observatory
GDP, Investment Data –IMF, GI, OECD
16
National Statistics on GDP, Investment
GDP, Investment Data –World Bank
GDP, Investment Data –Eurostat
ICT Investment Statistics – EITO/WITSA
Decomposition
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Country Observatory
GDP, Investment Data –IMF, GI, OECD
17
National Statistics on GDP, Investment
GDP, Investment Data –World Bank
GDP, Investment Data –Eurostat
ICT Investment Statistics – EITO/WITSA
Decomposition
Balancing & Reconciliation Process
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Country Observatory
GDP, Investment Data –IMF, GI, OECD
18
National Statistics on GDP, Investment
GDP, Investment Data –World Bank
GDP, Investment Data –Eurostat
ICT Investment Statistics – EITO/WITSA
Decomposition
Balancing & Reconciliation Process
Country Observatory
Tech Apps spendby country
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Observatory Reconciliation
Country Observatory
19
Product Observatory
Industry Observatory
Primary Research
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Observatory Reconciliation
Country Observatory
20
Product Observatory
Industry Observatory
Primary Research
Employment Observatory
National statistics, ILO data etc.
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
International Business Update - Agenda
21
Introduction
Tracking The Technical Applications Software Market
What is the Market Looking Like?
The Wider Picture - Black Swan Spotting
Manufacturing Matters – More Than Ever
Summary
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Tech Apps Spend by Industry
22
Source: Cambashi
0
500000
1000000
1500000
2000000
2500000
3000000
3500000
4000000
Industry spending Worldwide, $k
2010
2011
2012
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Tech Apps Spend by Industry
23
Source: Cambashi
0
500000
1000000
1500000
2000000
2500000
3000000
3500000
4000000
Industry spending Worldwide, $k
2010
2011
2012
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Growth by Sector
24
-0.9%
3.1%
3.4%
3.5%
4.5%
4.8%
4.9%
5.6%
5.9%
-2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0%
Public Sector
Services
Consumer
High-Tech
Transportation
Health Care
Machinery
Process/Utility
Aerospace and Defense
Worldwide industry growth in spending on technical applications software - 2011 over 2010
Source: Cambashi
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Brazil - Tech Apps USD millions
0.0
20.0
40.0
60.0
80.0
100.0
120.0
2007 2008 2009 2010 2011 2012 2013
Agriculture and forestry
Mining
Manufacturing
Elec, Gas, Water supply
Construction
Wholesale and retail
Hotels and restaurants
Transport, storage
Financial intermediation
25
Source: Cambashi
Industry Knowledge for Business Advantage© 2011 Cambashi Limited 26
Source: Cambashi
Tech Apps Spend by Industry - AMER
0
200000
400000
600000
800000
1000000
1200000
1400000
1600000
Industry spending AMER, $k
2010
2011
2012
Industry Knowledge for Business Advantage© 2011 Cambashi Limited 27
Source: Cambashi
Tech Apps Spend by Industry - AMER
0
200000
400000
600000
800000
1000000
1200000
1400000
1600000
Industry spending AMER, $k
2010
2011
2012
Industry Knowledge for Business Advantage© 2011 Cambashi Limited 28
-1.0%
2.6%
3.2%
3.9%
4.6%
4.7%
4.8%
5.3%
7.9%
-2% -1% 0% 1% 2% 3% 4% 5% 6% 7% 8% 9%
Public Sector
Consumer
Services
High-Tech
Machinery
Health Care
Process/Utility
Aerospace and Defense
Transportation
AMER industry growth in spending on technical applications software2011 over 2010
Growth by Sector - AMER
Source: Cambashi
Industry Knowledge for Business Advantage© 2011 Cambashi Limited 29
Sources: Eurostat and Bank of England calculations.
(a) Chained-volume measures.(b) Austria, Belgium, Cyprus, Finland, France, Italy, Luxembourg, Malta, Netherlands, Slovakia and Slovenia.
Euro Area GDP
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Germany – Tech Apps EUR millions
0.0
100.0
200.0
300.0
400.0
500.0
600.0
2007 2008 2009 2010 2011 2012 2013
Agriculture and forestry
Mining
Manufacturing
Elec, Gas, Water supply
Construction
Wholesale and retail
Hotels and restaurants
Transport, storage
Financial intermediation
30
Source: Cambashi
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
UK GDP & Sector Outputs
31
Sources: Eurostat and Bank of England calculations.
(a) Chained-volume measures.(b) Austria, Belgium, Cyprus, Finland, France, Italy, Luxembourg, Malta, Netherlands, Slovakia and Slovenia.
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Tech Apps Spend by Industry - EMEA
32
Source: Cambashi
0
200000
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
Transportation Services Public Sector Process/Utility Machinery High-Tech Health Care Consumer Aerospace and Defense
Industry spending EMEA, $k
2010
2011
2012
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Tech Apps Spend by Industry - EMEA
33
Source: Cambashi
0
200000
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
Transportation Services Public Sector Process/Utility Machinery High-Tech Health Care Consumer Aerospace and Defense
Industry spending EMEA, $k
2010
2011
2012
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Growth by Sector - EMEA
34
-1.2%
1.3%
2.0%
2.1%
2.9%
3.0%
3.3%
3.9%
4.7%
-2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0%
Public Sector
Consumer
High-Tech
Transportation
Services
Machinery
Aerospace and Defense
Health Care
Process/Utility
EMEA industry growth in spending on technical applications software2011 over 2010
Source: Cambashi
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Tech Apps Spend by Industry - APAC
35
Source: Cambashi
0
100000
200000
300000
400000
500000
600000
700000
800000
900000
Transportation Services Public Sector Process/Utility Machinery High-Tech Health Care Consumer Aerospace and Defense
Industry spending APAC, $k
2010
2011
2012
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Tech Apps Spend by Industry - APAC
36
Source: Cambashi
0
100000
200000
300000
400000
500000
600000
700000
800000
900000
Transportation Services Public Sector Process/Utility Machinery High-Tech Health Care Consumer Aerospace and Defense
Industry spending APAC, $k
2010
2011
2012
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Growth by Sector - APAC
37
0.0%
3.5%
4.3%
5.3%
6.8%
7.1%
7.2%
7.7%
8.0%
0% 1% 2% 3% 4% 5% 6% 7% 8% 9%
Public Sector
Services
Transportation
High-Tech
Consumer
Machinery
Health Care
Aerospace and Defense
Process/Utility
APAC industry growth in spending on technical applications software2011 over 2010
Source: Cambashi
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
International Business Update - Agenda
38
Introduction
Tracking The Technical Applications Software Market
What is the Market Looking Like?
The Wider Picture - Black Swan Spotting
Manufacturing Matters – More Than Ever
Summary
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Country Observatory
Balancing & Reconciliation Process
GDP, Investment Data –IMF, GI, OECD
39
National Statistics on GDP, Investment
GDP, Investment Data –World Bank
GDP, Investment Data –Eurostat
ICT Investment Statistics – EITO/WITSA
Decomposition
Country Observatory
Tech Apps spendby country
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Global Economy – Reasons to be Cautious
40
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Global Economy – Reasons to be Cautious
41
Financial System – Blinding with Complexity!
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Global Economy – Reasons to be Cautious
42
Financial System – Blinding with Complexity!
Stimulus Measures – Unintended Consequences?
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Global Economy – Reasons to be Cautious
43
Financial System – Blinding with Complexity!
Stimulus Measures – Unintended Consequences?
China – The Main Driver?
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Global Economy – Reasons to be Cautious
44
Financial System – Blinding with Complexity!
Stimulus Measures – Unintended Consequences?
China – The Main Driver?
Commodities – Who Will be Able to Afford Them?
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Global Economy – Reasons to be Cautious
45
Financial System – Blinding with Complexity!
Stimulus Measures – Unintended Consequences?
China – The Main Driver?
Commodities – Who Will be Able to Afford Them?
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
How did we get here?
47
Failure of regulation
Securitization
The scale of the problem
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
How did we get here?
50
Mortgage
Security
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
How did we get here?
51
Mortgage
Security
Sell
Bank 1
Bank 2
Bank 3
PF 1 PF 2
Rating
Low Risk
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
How did we get here?
52
Mortgage
Security
Med Risk High Risk
Sell
Bank 1
Bank 2
Bank 3
PF 1 PF 2
Rating
Low Risk
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
How did we get here?
53
Mortgage
Security
Med Risk High Risk
Insure Insure
InsurersCDSs
Spec. Inv
Sell
Bank 1
Bank 2
Bank 3
PF 1 PF 2
Rating
Low Risk
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
How did we get here?
54
Mortgage
Security
Med Risk High Risk
Insure Insure
InsurersCDSs
Spec. Inv
Sell
Bank 1
Bank 2
Bank 3
PF 1 PF 2
Rating
Low Risk
Sell
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
How did we get here?
55
Mortgage
Security
Med Risk High Risk
Insure Insure
InsurersCDSs
Spec. Inv
Sell
Bank 1
Bank 2
Bank 3
PF 1 PF 2
Rating
Low Risk
Sell
Asset Pool
Buy
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
How did we get here?
56
Mortgage
Security
Med Risk High Risk
Insure Insure
InsurersCDSs
Spec. Inv
Sell
Bank 1
Bank 2
Bank 3
PF 1 PF 2
Rating
Low Risk
Sell
Asset Pool
Buy
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Current situation
58
Mark to Model
Stress Tests
Locating „assets‟
Valuation
Reform
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Why can’t we stop bank bail-outs?
59
Bank Assets Q1 2011
Industry Knowledge for Business Advantage© 2011 Cambashi Limited 60
Progress on Bank Lending
Banking Innovations for 2011 – The 5-Minute Loan
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Global Economy – Reasons to be Cautious
61
Financial System – Blinding with Complexity!
Stimulus Measures – Unintended Consequences?
China – The Main Driver?
Commodities – Who Will be Able to Afford Them?
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
The Options
63
Forget austerity, we must continue to stimulate the economy – more QE!
It’s essential to address our deficits now
What the economic experts say:
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
The Options
64
Forget austerity, we must continue to stimulate the economy – more QE!
It’s essential to address our deficits now
Sovereign Debt
Inflation/deflation
What the economic experts say:
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Sovereign Debt
66
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Global Economy – Reasons to be Cautious
67
Financial System – Blinding with Complexity!
Stimulus Measures – Unintended Consequences?
China – The Main Driver?
Commodities – Who Will be Able to Afford Them?
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
China’s Economy
68
2010 gross domestic product (GDP) growth 10%;
2011 est. 8.7%
50-year "Go West" campaign
Auto sales in China 20 million in 2011 (Booz & Co)
Some recent evidence of over-inventory?
Record month
Inflation?
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Global Economy – Reasons to be Cautious
70
Financial System – Blinding with Complexity!
Stimulus Measures – Unintended Consequences?
China – The Main Driver?
Commodities – Who Will be Able to Afford Them?
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Oil
71
We can bring the oil price under control by simply producing more
We are past Peak Oil; OPEC doesn’t have any more
What the economic experts say:
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Oil
72
We can bring the oil price under control by simply producing more
We are past Peak Oil; OPEC doesn’t have any more
What the economic experts say:
Supply and Demand
Role of Speculation
EROI
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
International Business Update - Agenda
73
Introduction
Tracking The Technical Applications Software Market
What is the Market Looking Like?
The Wider Picture - Black Swan Spotting
Manufacturing Matters – More Than Ever
Summary
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Western governments and CBs must adopt a realistic
view of pace of recovery and the balance of the
economy
Nature of GDP; consumer-driven GDP growth?
Challenges for Growth
74
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Western governments and CBs must adopt a realistic view of pace of recovery and the balance of the economy
Nature of GDP; consumer-driven GDP growth?
Jobless recovery?
Demographic and affordability problem - was old out, young in, now it‟s old still there, young.....?
Dangers lurking in the financial system
Financialisation – TBTF, SIFI – banks are getting bigger!
Convergence
Challenges for Growth
78
Industry Knowledge for Business Advantage© 2011 Cambashi Limited 79
Extreme Caution
Not at all sure what’s ahead
Challenges for manufacturers
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Challenges for manufacturers
Cost control
Quality
Reliable scheduling
Faster to market with innovative, competitive products
Efficient asset and resource usage
Global sourcing and sales
New competitors with new brand values
Share customer‟s project/risk
Responsive customization
Handle late changes
Be able to prove compliance
Plan for and manage more “real-time” parameters (price of power, ...)
80
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
BRIC and other emerging nations dominate?
BRIC provided half of world GDP growth between 2000 and
2008.
Not yet the balance of developed economies, but moving fast
How to develop long term sustainable manufacturing
capabilities?
How to exploit Engineering Software?
Tipping point?
81
Industry Knowledge for Business Advantage© 2011 Cambashi Limited 82
Engineering Software
Key to future competitiveness or leveler (global
convergence) ?
Industry Knowledge for Business Advantage© 2011 Cambashi Limited 84
Engineering Software
Key to future competitiveness or leveler – global
convergence ?
Can ES providers help manufacturers achieve a more beneficial balance?
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
International Business Update - Agenda
85
Introduction
Tracking The Technical Applications Software Market
What is the Market Looking Like?
The Wider Picture - Black Swan Spotting
Manufacturing Matters – More Than Ever
Summary
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Summary
86
In the near term Tech Apps market is fine, BUT
Further financial system crises are likely inevitable
Western governments MUST address the balance of
economy problem
Manufacturing is the only way to drive sustainable
growth
The way in which ES is exploited is key
Industry Knowledge for Business Advantage© 2011 Cambashi Limited
Thanks for listening
www.cambashi.com
+44 1223 460439