Scottish-born Jim Duncan, European head of EDS PLM, appeared cheerful and relaxed during a recent visit to the company's Swedish head office outside Stockholm in connection with the launch of the new CAx version, UG NX 2.

"Sure, I would have been happier if business conditions were brighter," he says, "but on the other hand, I am convinced that the lowest point is behind us. Things can only go in one direction now. The market has realised that it cannot simply starve its way out of the crisis."

While companies are still careful with their money, Jim Duncan believes there has been a change of attitude. "We are seeing certain signs of a recovery, particularly in Germany, which, in terms of industry, is more of a motor than other countries. Our order books are showing clear indications: Germans are starting to invest in IT again. This is also reflected in what our own people are saying. EDS people are more on the alert now."

The lessons of history

However, Duncan's good humour is not only due to the favourable economic outlook. He is also pleased with the way the company dealt with the worsening business climate.

"We counterbalanced economic conditions in an excellent way," says the EDS leader. "In this respect, I think we have learned from history. This time, there were no business-destroying 'crazy cutbacks' driven by owners' and management's lack of courage. Instead, working calmly and methodically, we implemented certain effective, well-understood measures, such as cost control, fewer consultants and fewer employees in areas where it was necessary - but selectively, and with a sense of where we might be able to quickly expand in places where we have identified growth potential once the wind turns. In Europe, a total of 100 employees were let go, while cost control was focused primarily on phasing out office-related expenses."

Duncan makes a comparison with Napoleon's retreat from Moscow: "It was not in the forward attack that he ended up losing the most - the real losses occurred during the chaotic retreat. In other words, the thing is to make sure you conduct an organised retreat."

Delivering as planned

Duncan believes the company is now making its deliveries as planned. He is careful to point out that the technical PLM systems UG NX, I-deas NX and Teamcenter in particular have had record growth that is entirely in accordance with plans. "We are consistently proceeding exactly as we previously declared we would. The new versions of UG NX and I-deas are coming right on time, according to the published roadmap. Moreover, we are investing enormous sums in development work - US$220 M a year. So I am not surprised at the reception the solutions have received, as we have travelled around to launch them in Europe. UG NX 2, the focus of our current trip, has been received with great enthusiasm. It was the same thing earlier in the year when we presented I-deas."

Rejects 'migration criticism'

Duncan rejects the criticism of I-deas expressed in certain industry magazines concerning migration problems with data from older systems: "I-deas users as a group, came from a very sophisticated environment. So, many independent developments and special applications have been developed. Naturally, such undertakings have required support programs to enable methodical, systematic migration of data. However, we felt that we had a responsibility in this respect and have therefore created the necessary solutions. It is precisely in cases such as these that we recommend customers to wait until NX 3 is ready in 2004, before implementing the new system.

"We are living in a multiCAD world and it seems likely to stay that way. In fact, we are increasingly seeing customers emphatically demanding open solutions. They have no desire to hassle with complicated file openings and lose valuable product development time and data during transmissions."

Duncan explains further that cooperation with the mammoth EDS is no longer top-priority in the company's operations. "PLM Solutions is considered our core operation and has been given a more free role. Areas where cooperation will likely be augmented are generally related to what we refer to as New Markets. Here, I expect we will find many aspects in common with implementations of Teamcenter Enterprise."

And the outlook is promising, says Duncan, citing deals made with clothing company New Look and with Procter & Gamble. "Our performance in non-traditional markets such as biosciences, medicine and clothing is excellent, and we are about to close several deals in these areas."

For more information contact Cobus Oosthuizen, ESTEQ Design, 012 991 5570, c.oosthuizen@esteq.com, www.esteq.com