Spatial Corp

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Spatial Corp
Subsidiary of Dassault Systèmes
Enabling the Expansion of the 3 Dimension Design
and Manufacturing Systems Market
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Company History

• Founded in 1986
• Dedicated to selling 3D technologies to
  developers
• First solid modeling component
• On more desktops than any other
• Became a part ofDassault Systèmes in November
  2000

Spatial corporate headquarters Westminster, CO USA
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Spatials Mission

• To develop and market 3D software components and
  subsystems to application developers that enable
• The development of high-performance 3D software
  solutions faster
• The expansion of the 3D PLM and CAA V5 market
• The expansion of the overall 3D market

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Our Customers 3D Application Developers

• Companies of all sizes and types
• Small companies venture funded start-ups,
  university based entrepreneurs, privately held
  small businesses
• Mid size companies emerging technology software
  companies established, profitable focused
  software companies well funded, established
  companies restructuring for the future
• Large software companies established, broad
  product line companies
• Development departments mid size and large
  manufacturing companies

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Our Customers Funding and Finances

• Companies with different business models
• Venture funded
• Build value, prepare for sale and exit strategy
• Sales, margins, profitability, eps metrics
• Private investment funded
• Longer term growth, limited capital
• Limited financial expectations
• Public software companies
• Margins, profitability
• Divisions with unique objectives
• Proprietary technology implementations
• System compatibility solutions

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Our Customers Product Pricing

• Companies with different product distribution
  objectives
• High value limited volume products
• 10,000 to 100,000
• High volume lower price products
• 1000 to 10,000

Need an inclusive pricing strategy
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Spatial history

• Licensing fee plus maintenance upgrades
• Per seat
• Volume based ramp
• Annual licensing fee
• No quantity limit
• Annual licensing fees plus royalty
• Fixed fee for maintenance and upgrades
• Royalty on sales
• Modified by usage of core products

Complicated, not consistent, not scaleable
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Alternative Pricing Models

• Perpetual license
• Periodic new releases for upgrade fees
• Per click (software/hardware/consumable use)
• Copier - printing
• Per transaction data translation/timeshared
  systems
• Occasional use model
• Fixed Annual Fee plus Royalty
• Lease Lease Initiation plus annual license fee
  (lease)
• Wholesale price per seat plus upgrades

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Spatial Today

• Pricing model is different for each product line
• Three product lines
• ACIS modeler and options
• InterOp data translators
• Partnerships with our parent company (High end
  products)
• Three pricing models
• ACIS share the risks, share the benefits
• InterOp wholesale price per seat
• Partnerships fixed fees plus royalty

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Software Component Pricing Model

• ACIS modeler
• A component type technology
• Customer builds substantial value on top of ACIS
  3D components
• Free evaluation and development license
• Development may take a year or more
• Customer invests available money into the
  business not licenses
• When ready to sell, signs a product distribution
  agreement
• Annual fixed distribution license fee - 19,000
• Plus reports sales and pays a royalty on sales
  About 7
• Minimum per seat to limit exposure at low end
  no give aways

Fulfills the mission of expanding the
availability of 3D applications
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Subsystem Pricing Model

• InterOp data translators
• A subsystem type technology
• Customer may add little value on top of a tested
  and complete translator
• Free evaluation and development license
• Development may take a few days (GUI type work)
• Product ready for sales very quickly
• When ready to sell, signs a product distribution
  agreement
• Two pricing models
• First pricing model
• Whole sale price for each translator (example
  300/seat)
• Product license plus annual update fee
• Sold as an option on customers product
• Second pricing model
• Annual fixed fee for range of seats to be sold
  (10,000 to 50,000)

Choices to match the Value oriented business
and the Volume oriented business
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Partnership Pricing Model

• Partnerships with Dassault Systemes
• A toolkit type technology
• Customer uses tool kit to create application to
  plug into existing product seat CATIA V5 CAD
  seat
• Customer must apply for Partnership through a
  defined process
• Provide description of application and technical
  needs to complete application
• Significant support may be required from Spatial
• If approved License to develop and distribute
• Development may take years
• Product is very specialized
• License Fee plus Royalty
• License fee 25,000
• Plus 10

High value applications that are tightly
integrated into a system
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Some Considerations

• Available capital
• Royalty based pricing provides less upfront
  growth capital
• Customer business models
• Royalty lowers front end capital requirements
• Decreases margins long term
• Customer trust and loyalty
• Royalty reporting
• Services and product improvement commitment
• Can the customer go to competitive solutions?
• Intellectual Property Protection
• Legal actions

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3D Everywhere, Anytime, for Everyone