Cambridge, MA, August 3, 2005 -- China is rapidly becoming the manufacturing center of the world. Chinese manufacturing is not immune to the ever-changing needs of new product development and engineering. Over 70% of the $60.6 billion China received in foreign investment was in the manufacturing sector. Over 40,000 foreign companies have created new manufacturing facilities in China or established manufacturing partnerships with existing Chinese manufacturers. With more and more multi-national manufacturing enterprises moving their factories to China, the manufacturing sector grew 16% in 2004, and is expected to grow 15% annually over the next 5 years.

PLM technologies, including MCAD, CAPP, DMPM, CAE, CAM, PDM, ECAD, and others, have acted as a growth engine of Chinese manufacturing enterprises since 1990.

The Overall PLM Market in China

e-Works and Daratech estimate the Chinese PLM market saw sales of approximately $191 million in 2004, with growth of 30% in 2005 expected to bring the market to almost $250 million. This figure includes channel revenue but does not include associated services. Compared with the more established North American and Western European markets, the Chinese PLM market is still in its early stages but has a far greater growth potential and our forecast for its growth is roughly three times that of the rest of the world.

Why isn't the market bigger today? Overall PLM revenue is largely and negatively affected by the illegal use of CAx software, especially 2D and 3D CAD, with the number of illegal users probably outnumbering legal users by at least 5 to 1. However disconcerting this may seem, this irregularity actually underscores the growth potential in the next five years, as illegal use diminishes. Urging illegal CAD users to switch to legal versions has improved the revenue potential of companies such as Autodesk, SolidWorks and other international CAD suppliers. As the intellectual property protection status of China steadily improves and attitudes change to accept the value of intellectual property rights, even greater potential exists for strong growth going forward. Another important factor in sizing this market is the fact that implementation and maintenance revenue is much lower in China than in the North American and Western European markets. However, this is expected to change in the not too distant future.

PLM: Chinese Markets & Opportunities

A detailed report titled PLM: Chinese Markets & Opportunities is being researched by e-Works and Daratech and will be made available in the fall. Please contact Daratech at www.daratech.com/china for the English version, and e-Works at www.e-Works.net.cn for the report in Chinese.

About Daratech

Daratech, Inc. is a leading provider of information technology market research and technology assessment, advisory and strategic consulting services, and executive-level conferences for manufacturing, engineering, construction and plant operations. Established in 1979, Daratech specializes in PLM, CAD/CAM, digital product simulation (CAE), PDM/EDM, AECO PLM (architecture, engineering, construction, operations, plant lifecycle management), document/enterprise content management, GIS and related areas.

About e-Works

e-Works Manufacturing Information Technology (China) Co., Ltd., is one of the best known IT research, training and consulting companies serving Chinese manufacturing enterprises. Its well regarded www.e-Works.net.cn portal, which records over 100,000 page hits per day and has more than 150,000 subscribers, provides Chinese manufacturing companies information and opinion about CAD/CAM, CAE, PLM, ERP, CRM, SCM and other IT applications of interest to Chinese manufacturing enterprises. e-Works has teamed up with Daratech, the world's leading PLM think tank and market research organization to report on Chinese PLM markets, opportunities, modes of working and partnering.

In May 2005, Daratech, Inc. and e-Works Manufacturing Information Technology Co., Ltd. of China announced a partnership to expand and deepen their world-class market research on global PLM market trends and technologies. Information on this partnership can be found at www.daratech.com/press/releases/2005/050523.html.