On Time, On Budget, Onshape
Solidworks meets google docs while Onshape provides a platform for users to engage with CAD, engineering, and design support.
Introduction
Onshape is a first-mover in the computer aided design (CAD) space that has leveraged the web browser and mobile device as venues for CAD. Instead of traditional expensive software packages, Onshape’s users interact with CAD much like they would Google Docs or a GIT repository. Onshape is an intensely customer-focused company that leverages their customer promise to effectively motivate their operational and business decisions.
Customer Promise
Onshape’s product is not only useful for companies looking for a software solution to their CAD needs, but also hobbyists who want to design parts for MakerBots to print. Onshape has these users in mind when they list their values as the following:
- We Will Deliver Unsurpassed CAD Excellence
- Your Problems Are Our Problems
- We Won’t Operate in the Fine Print
- Our Customers Should Never Feel Trapped
- We Acknowledge That We’re Human
- Everything We Do is Transparent
- Your Privacy is Paramount
- We Promise Not to Take Ourselves Too Seriously
- We Want to Make CAD Fun Again[i]
Business Model
Onshape offers three pricing schemes: Free, Professional, and Enterprise. They clearly outline their target markets for each category. The free pricing is targeted for students and hobbyists. Professional pricing ($100/user/month) is intended for light-duty professionals. Enterprise is pricing is not publicly available, but it is intended for firms that need heavy-duty server capabilities and strong design control[ii]. This pricing scheme allows Onshape to open its doors to customers who use it at home or school, and then ask for it when they get to the professional or enterprise level. All of their prices are attractive when compared to traditional software packages, which retail around $5,000 and require frequent updates[iii].
In addition, Onshape offers partner agreements to engineering and design firms. It is not clear from publicly available information whether these agreements are monetized, but ultimately Onshape is creating value for both its users and its partners by providing a platform in which to collaborate on designs. If Onshape can monetize some of these agreements while maintaining their customers’ privacy, it is a huge opportunity for the company to increase their revenues beyond the professional and enterprise customers’ monthly fees.
Operating Model
Onshape’s day-to-day operations highly involve data processing and storage. This is all done through Amazon web services[iv]. By leveraging Amazon’s capabilities, Onshape can focus their operations on meeting their customer promise and not divert attention and resources away from their customers.
Onshape’s process for making design decisions on the next feature directly reflect their customer-focus. While a user is working in the web browser, there is a button for the user to give feedback in real time. Additionally, if they need support, they can visit the forums for community members or Onshape staff members to help them. Through the forums and real time feedback, Onshape gets a good sense of what is going wrong for users and how to fix it. By assessing these pain points, they can start to improve the system and add features and designs to meet their users’ needs[v].
Commercially, Onshape focuses much more of their effort on training users than trying to sell their product[vi]. This focus leverages their online presence and will result in significantly less sales and marketing costs than their competitors who need sales representatives all over the globe. In addition, this focus retains users at the point in time when they are most prone to leave the site – as they learn how to use it.
An important aspect of Onshape’s operations that differentiates them from their competitors is that they continually release improvements instead of having an annual release cycle. Most importantly for their users, there is no interruption in services or incompatibility between files made in one release or another[vii].
Conclusion
Onshape’s business and operational models are directly tied to their values and their customers. Their competitors are large and slow to change. Onshape’s customer focus provides a great opportunity to capitalize on the opportunity to apply cloud collaboration to CAD, and become the future of CAD. As Onshape becomes a larger share of the market, they can generate revenues from their users and monetize their partner agreements, fueling their continued customer-focused feature release cycle.
[i]Core values: https://www.Onshape.com/cad-blog/Onshapes-core-values-our-statement-of-principles
[ii]Pricing https://www.Onshape.com/features-and-pricing
[iii] Competitors’ pricing: http://www.forbes.com/sites/bruceupbin/2015/09/24/Onshape-raises-80-million-more-to-go-big-in-cloud-cad-software/
[iv] Amazon web services: https://www.Onshape.com/partners/platform
[v]Feature additions: https://www.Onshape.com/cad-blog/enhancement-requests
[vi]Training instead of selling: https://www.onshape.com/cad-blog/why-onshape-invests-more-in-education-than-sales
[vii]Release cycle: https://www.Onshape.com/cad-blog/how-does-Onshape-update-functionality
