CoCreate adds new visible dimension to company image

When an investment group decided to purchase CoCreate Software earlier this year, the changes that would occur at the Fort Collins-based company were unclear.

But months after the transaction, hints of CoCreate’s future are beginning to emerge, and it is a future of greater visibility.

The private equity arm of Dallas-based HBK Investments LP purchased complete interest in the software developer in July, about six years after CoCreate spun off from Hewlett-Packard Co. Since the 2000 buyout from HP, investors Triton Fund and 3i Group have held a majority interest in the company.

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In addition to its Dallas headquarters, HBK operates offices in New York, London, Tokyo and Hong Kong. The company manages about $11 billion in equity capital, making it one of the largest hedge fund managers in the world.

CoCreate is co-headquartered in Fort Collins and Sindelfingen, Germany, and employs about 100 in the United States. Prior to the buyout, the company had been very focused on engineering.

CoCreate now offers a line of applications referred to in the industry as Product Lifecycle Management tools – or PLM. The keystone application is a dynamic 3-D CAD modeling program. CoCreate also offers a 2-D modeling program and OneSpace.net – an online tool to allow product collaboration between teams all over the world.

The software had a successful 2006 version launch at the start of the year.

Shortly after the buyout, CoCreate named a new chief operating officer. The company appointed Hansjoerg Plaggemars to the position. Plaggemars was previously the company’s CFO, where he had served for the last five years. Plaggemars was an advisor to the firm when it was spun off from HP.

These events, coupled with the new investors with an expanded global footprint, translate into the company moving into a new stage. This new area will be one of expanded visabililty for the previously insular company.

“This company has been very shy for five to six years,´ said Scott Carlin, marketing director.

Three or four years ago, Carlin explained, the company just didn’t have the sales growth needed to justify increased expenditures on such things as intense marketing. But today, the company is growing its sales force in an effort to get the CoCreate name out there. The company is also putting together a telemarketing effort, which spokesman Todd Black said is the first in company history.

“We’ve been the brand behind the brand,” Carlin said.

Market segments diverge

CoCreate’s modeling applications have been used on a variety of products, including Agilent electronics, RKS guitars and by Robbins GmbH, which used CoCreate’s software to design its tunneling and boring equipment outfitted with a drill bit boasting diameters from 2 meters to 12 meters – in other words, very large machinery.

Also driving CoCreate’s future is an interesting market phenomenon. Black explained that there are two fundamental approaches to 3-D product development – history-based systems and dynamic modeling systems. In the past both of these methods fit into the same market. However, the segments are going apart as companies migrate to the solution that best fits their needs.

In the dynamic modeling segment, CoCreate’s product is best suited to companies that need rapid product design turnaround. For example, many technology companies are dealing in products that quickly become obsolete, so time to market becomes key.

“Within our market segment, we’re the world leader,” Black said, adding that the company has not previously disclosed such information.

As the markets become segregated there will likely be explosive growth for the segment. Black predicts that the next 10 to 15 years will be marked by strong growth for dynamic modeling applications.

Local ties

CoCreate’s software plays a part in product development for some very large, well-known companies. But it also has some local ties.

Fort Collins-based startup Spirae Inc. began using CoCreate at the start of the year. Spirae focuses on energy control systems and integration.

“I have a long history with CoCreate,´ said Spirae Chief Operating Officer Dan Zimmerle. He was the principal senior manager at HP for the group that developed the software.

“I’m familiar with the CAD systems because I’ve worked on it,” he said.

Despite this history with CoCreate, the company looked at several systems, including SolidWorks and AutoCAD. In the end it came down to two things: the ease of use with the dynamic modeling system and the price.

“In a startup company, cash is king,” Zimmerle explained.

CoCreate offers its software through a leasing option. A base license for a similar product would have cost Spirae two to three times more.

Cost was a major factor for another Fort Collins-based startup. Livengood Engineering was creating hand-drawn models of its Livengood Platform – a rolling platform for use in hospitals that consolidates monitors, IV bags and other patient devices.

“Basically, we couldn’t afford anything,´ said CEO Joe Livengood, adding that the cheapest products were selling for between $10,000 and $20,000.

In retrospect, Livengood said that being able to procure the software on a lease basis was the difference between being able to launch his product and not. Because of the modeling system, the company was able to bring the product up to the prototype stage without securing outside funding. When it came time to seek funding, having a full virtual model has helpful.

“It let us progress as a company a lot further,” he said. “I’m not sure if we’d have been able to pull it off without it.”