Welcome everybody. I'm very delighted and happy to have you all here today at our campus for our Capital Market Day 2022, as well as everybody who joins us via webcast and online today. We have prepared a very comprehensive agenda and program for you today to articulate our ambition and our strategy to really position Dassault Systèmes at the center of the experience economy and highlight our proof points today to give you evidence that our strategy is working. Of course, if I might ask to have the agenda up now? Yes. Thank you. Of course, we will start, as you would expect, with our CEO and Vice Chairman, Bernard Charlès, who will take you through the great shifts of the sustainability and experience economy and will also highlight the evolution of the governance of our company.
We will have Pascal Daloz, our COO, who will comment on our addressable market, our leadership position, and our opportunity to expand and grow. In this context, Pascal will also share with you how we create a multiplier effect using the IFWE Loop. Thereafter, we will have a short break, and then we will turn to our life sciences sector, and I'm very delighted that we have Tarek Sherif, our Sector Board Chairman, as well as Anthony Costello, our CEO for Medidata Patient Cloud, joining us today. They will both share with you how the future of health and precision medicine is creating new opportunities for Dassault Systèmes driving long-term growth.
Joining them, Sastry Chilukuri, our Co-Chief Executive Officer of Medidata, together with our client, Rajesh Malik, Chief Medical Officer of G1 Therapeutics, who will show you how we are using the synthetic control data and technology to change drug development and accelerate hope for patients. We will have Florence Verzelen, Infrastructure and Cities Sector Board Chairwoman, who will explain our strategy to transform this sector to place sustainability at the core. We'll be moving on to the manufacturing industries, and I'm delighted to have Philippe Laufer join us today as our chairman for the manufacturing industries. He will outline the tremendous opportunities and the challenges this sector is facing and our role to solve it. We'll have a quick break, and then we're excited to have our customer, Rivian, joining us today.
Barry Caldwell, Director of Geometric Development and Operations, he will explain how this 3DEXPERIENCE platform is supporting the transition to sustainable mobility experiences. This pre-presentation will be followed by Toshiko Mori, our Independent Director and Lead Director for Sustainability Development. Toshiko will share with you our commitment to ESG. Finally, I will conclude the session with my presentation highlighting our multi-year growth opportunity. Please note that we have four Q&A sessions. We'll take the questions from the room as well as from the webcast, and I would like to ask you to just ask one question, and we'll be as concise and fast as possible to answer. With this, it's my pleasure to welcome Bernard Charlès.
Thank you, Rouven.
Thank you.
So pleased to have you, Rouven, with us. It shows that at Dassault Systèmes, when we do acquisition, we can also do stellar speed promotion, which is your case on, you deserve it. It's a great pleasure for me to share with you a few things. If there was a single message I would like to share with you today, it would be the following. I think, and you know I've been in Dassault Systèmes for now a while, two generation of innovation on innovators. I've never seen our company being in a so strong position to build a long-term, sustainable, significant growth ahead. I would add no matter what.
I think I am very confident for many reasons that I am going to tell to you now that we have something to do to improve the world. You remember, many of you, we published on February 9th, 2012, a statement that says, we believe the product economy is over. It's going to become an experience economy and therefore, how do you create experiences? What is an experience? I think 10 years later, no one debate the fact that automotive industries are not focusing only on cars anymore. They are focusing on creating experience for mobility. I could take collection of examples around the world where this is happening. The question is, we've invented the appropriate platform to imagine, create, produce, and track experiences through the life cycle. That was 10 years ago. The consequences for us has been gigantic, creating a platform, industry solutions.
In 2020, February 6, we said, "Well, we are doing that for physical goods, also for construction and infrastructure. Can we, and should we expand it, for life sciences?" Of course, that was a result of a big move in November 2019 with the Medidata acquisition, the bet that by coming together, we could create something different. Basically, over the last two years, Pascal and I have been communicating with you to reposition the Dassault Systèmes in the economy. We are now creating these virtual twin experiences in three sectors of the economy, serving 12 industries, for things which are produced by humanity, from shampoo bottles to satellites, from therapeutics to medical practices, and more to be discussed about that topic and the potential of it. Also becoming a game changer in infrastructure.
This is. I think you would recognize all center on the human dimension of it. Human as consumers, human as workers, collaborative environment to imagine, and human as patients, new therapeutics, Patient Cloud. Human as citizens living in an environment where we all want to see improved sustainable environment. This is why people are joining this company. This is why we have a vibrant team. Some of you who have been seeing the campus today, you see the ambiance here and the ambiance is the same in India and all the campuses we have around the world. There is something inside which is very profound. We believe that what governs our imagination is science. We have science at the heart of everything we do, which makes the barrier to entry very high for everything we do.
Take the example of geometry. There is no system today that can produce as precise geometry for object as us. That's why it's 100% of the planes. I could go on and give you example like this. We continue to work to have extreme quality in everything we do. That's the point here. The second point is, if you admit that the world of the 21st century economy is an experience economy, I think it's happening in your business too, by the way. There is a second aspect which is converging with it, which is the sustainability of it, the circularity of it, and both going in the same way. For me, experience economy means frugality. Means consciousness about the use of the product or the solutions versus the look at the functionalities.
It drives a frugal or a more frugal economy. Circularity is about designing things, understanding that there is always an end to everything, including life. Which means that every object produced by humanity, they have an end on how at the end stage things can be reused. It trying to change the design world in a profound way. There is no other way to do it. We cannot imagine to proceed with waste without having waste by design. Waste by design is the new thought process to manage the eco-bill through life cycle. It fits very well with our purpose, harmonizing product, nature and life, which is very strong inspiration for all our R&D team and all the alliances we do around the world.
More than that, we have thought, imagined and created a model to make it possible. It's a kind of view of the world using math and data to do it. We call it the IFWE Loop. The way to connect the dots in a way where you can create a spiral of innovation, observe the spiral of usage, connect the two spiral and create a continuity. We call this the IFWE Loop. So it's an abstraction model, but we are putting it as a technicality, as an approach inside all our solutions, including the behavior of our platform. Because as you remember, we believe and you know, you can see the news flow about metaverse, and I've seen top consulting firm talking about it like if we were still doing planes with a drawing.
Those guys have not seen that we have done metaverse for airplanes. I think they are not aware, and believe me, some are big names, and I was shocked to see some of their presentation talking about absolutely, frankly speaking, ridiculous description about where all this is going. The universe, the virtual universe for planes and cars were created the past century between 80 and 2000, and we did it. Nobody can take this away from us. It's an incredible legacy and a strong heritage for the company. Extending the real world with the virtual one, making it additive is what is happening, and I think it's changing all the structural aspect of all industries and the economy itself. Of course, we feel very good because we now are getting equipment, mobility, cloud, computing power to make this happen. It's happening.
The definition of the frontiers we have attacked and modified are really happening thanks to the mobility. Because now you can have the experience platform on the mobile. I was at a table with few of you, and I demonstrated how it works. You can do design on a mobile. You can do life cycle on a mobile. You can look at simulation result on a mobile. You can get access to data, do data science on a mobile. This is an amazing opportunity for us. I remember the time when our software was on mainframe. I remember the time where we got Unix workstation. It was great because we could visualize, we could reveal in front of people the power of their imagination. We went to new kind of capacity to simulate and reveal the behavior of things.
This is the wave we have created over time. We have a gigantic installed base of clients, extremely loyal, with long-lasting, loyal relationship. We are building with them. We love them, unlike some of the players in the industry. We love our clients, and we put their preoccupation at the center of what we do. This is why the Dassault Systèmes story on heritage is maybe unique and different from many other things that you can see. In this new world where we can represent the imagination with the virtualization. I'm not using the word digitalization, because digitalization is a technical aspect. The virtualization is a way to represent the imagination. It's not a small nuance. It's very profound. When you will have quantum computing, you will not have a digit anymore.
By the way, as a side note, if you understand quantum computing, it's not going to be digital. It's not going to be zero and one, and it's going to happen hopefully sooner than later. This is why the shakers of each of the industries we serve are adopting our platform in a big way. We see them now. You are going to see Rivian today. We had an amazing presentation on aviation doing electric aircraft last week. You see Tesla, NIO. Tesla is becoming a standard customer for us. There are newcomers creating new approaches. You see that also in life sciences with Moderna, BioNTech and many others. You will also have a great presentation here at this event. You see a lot of names here.
What makes us different is we are connecting the dots between imagination, science, new possibilities, evaluating how to do it, simulating how to do it. Creating the environment to produce them, connect the suppliers together, and then watch and look about how those products and services are being used through their experience in the real world. We have generalized the idea of real-world evidence that we learn from the med sector to be applied to all industries we serve, because it's a very useful concept. Modeling, simulation, data science all coming together. Established players are also adopting it. Last week, we got an amazing presentation about Skunk Works' work, the most secret things on the planet. The fact that they have adapted in a gigantic way our platform.
You see here the more official things we can present with many, many customers now adopting the 3DEXPERIENCE platform because it's game changer for what they do. You see here we have done JLR, Land Rover, Renault, Rivian and Toyota. We can put the long list, but really the adoption of the platform is game changer for them. The reason why it's taking time is because it's a massive transformation for their organization. New jobs, new role, new processes, new organization, new KPIs for their performance. Why? Because they need any way to create a new portfolio which is not more of the past, but massively different solutions. For me, the manufacturing of tomorrow will produce experiences. Not goods, experiences directly online. That's what is happening when you do a suite for mobility.
You have the object, the vehicle, and you provide the service for mobility. As an example, many others could be taken from that same point. We continue to focus on education, on labs around the world. We have a lot of startups using our 3DEXPERIENCE platform to create things never created before. Every quarter, we review them, we select them, and we decide the one we are going to sponsor. Millions of students are learning our approach to a new way of designing experiences, producing them. Millions, about above 10 million from what Pascal told me the other day, and we continue to expand that every year. Of course, we put certification process because as Einstein said, the ultimate of knowledge is experience. Welcome in the experience economy. Welcome in the experience company, Dassault Systèmes.
To do that and create the next 20 years, we have set up and grown a team I am so proud of. That's a team of the theme of the road show I'm going to do in the next day. I don't do many road shows, as you know. I did them in 1996 when we did the IPO, a few after, and I transferred that responsibility to good competent people to speak about it. I'm going to be back again because, of course, as you know, our chairman is going to turn 85 in. The founder, Dassault Systèmes, Charles Edelstenne, my coach, the one I love very much, and I've learned so much with him. He's going to turn 85 in January, so we have already established the transition since 2016. People don't watch details.
Since 2016, I am the Vice Chairman, which says if the chairman is not there, the vice chairman is the chairman. There is no new news in some way. I've been working with Pascal for 20 years now, or even more. He has taken so many jobs, different jobs and built up an incredible competency. On the team around Pascal is really a very impressive team. New generation of leaders. This is what it also takes. Harmony, not only in what we do, but in how we do it with the team. You have the dates here about the evolution of the governance. Zero surprise. All documented, prepared over the years with new members selected, on growing, on having the same vision about where we want to go.
The heritage and the ambition are coming together. You know how it's represented. With the incredible legacy of what we have done. We have done metaverse before metaverse was even spelled. We are exploiting them at full scale. We are going to expand and create virtual twin experiences for the what, the how, and the who, how companies are working. With that, Pascal, you have the floor because I'm sure you are going to tell us more about how we are going to make all this happen.
Thank you, Bernard.
Congratulations again for what you do.
Thank you very much.
Thank you very much.
Good morning, good afternoon to all of you. It's really a pleasure to be in person. I think for the one who had the chance to have the dinner with us last night, I think it was entertaining, I guess, maybe interesting, but for sure convincing, I hope. Adding some perspectives to Bernard's presentation, I would like to highlight in the next 15 minutes how we will be able to execute these visions Bernard just described at scale and in a sustainable manner. That's the topic of my speech. First, let's start with what's happened since last time we met. Capital Markets Day, November 2020. First of all, I think we deliver a strong performance, and I hope all of you are in agreement with this statement.
Not only because despite the challenging macroeconomic environment, we deliver the numbers, it's because also, I think those challenges reveal the value of what we bring to our customers. Not only in the manufacturing sector, but in the three sectors of the economy we serve. That's the first point. The second one, I think we are strengthening our position on the market. Again, it's not only from a market share standpoint, and I will come back on this, but also from a mind share also with our customers. No one is arguing anymore about the value of the platform. It's a given. The third point is, I think we have successfully integrated Medidata and, you know, you will probably see in person the people who join us and testifying.
Again, if it has been highlighted by the success of the life science platform in the ability, you know, to hasten the vaccine development for sure, but also leveraging the pool of talents. You know, Tarek is leading the Life Science Sector board. Rouven Bergmann is the CFO of Dassault Systèmes, just to name only the two. Finally, Bernard Charlès say a few words, we have set the leadership to deliver the, at least the 2040 vision and execute it at scale. Let's start with the addressable market, right? That's probably the first question. For those who follow us for long times, you know that it's in our DNA to explore new scientific and technology barrier frontiers, in order to help to solve industrial challenges.
The most important thing is at each steps, each stage, we have been able to double the size of the addressable market. I think with the newer reasons, the virtual twin experiences will allow us to triple it, to reach EUR 100 billion. That's the addressable market we are serving right now. Now, this addressable market is split in three different sector of the economy. If you look at all of them, it's a vast growth opportunity they are representing. To make a long story short one, we can easily double the addressable market in manufacturing industry as well as life sciences and healthcare. We only covering a third of the infrastructure and city market, right? That's the reality today. Now, looking the leadership positions, you know, while we are expanding the addressable market, at the same times, we have built a unique position over times.
In the manufacturing sector, we are the clear leader with a significant gap compared to the others. We continue to gain market share, at least winning 0.5 point market share per year. In the life sciences and healthcare sectors, zooming on the drug and medical device development life cycle, which is really the market we serve, right? We are also the leader, and we have expanded by 2 points since the merger with Medidata. In infrastructure and city, we are the game changer, or maybe you will call it challenger, but I would prefer game changer. Why so? Because we are disrupting the landscape, the competitive landscape with the platform approach. We are building right now emblematic references, and you will see some of them, which I think will give you the reasons to believe that this will be at scale.
For the time being, more importantly, it's not the market share for us, it's the share of value, how much value we are creating for this entire industry. Now, how this is translating into growth perspectives. Again, thanks to the well-diversified market and competitive positionings, we are anticipating 10% revenue growth in average between 2021 and 2025, and how it is split between the different sectors. If you look at the manufacturing sectors, representing almost 70% of the total software sales, I think there are drivers like the imperative of sustainable development, the profound change in consumer expectations, which are implying deep transformations. That's the reason why we are convinced we can grow by 9%-10% the revenue we do, outpacing the market's growth.
In life science and healthcare, accounting for 20% of the software revenue, we are targeting a revenue growth between 13% and 15%, thanks to the contribution of Medidata, of course, but also to all the other solutions. You will see in Tarek's presentation that they are becoming a reality in these sectors. Finally, in infrastructures and cities, which represent roughly 10% of our software revenue, the challenge is to develop resilient, safe and affordable infrastructure, and we are targeting a growth between 12%-14% versus 10% for the market. That's for the growth. Now looking our growth strategy, we are also activating the operational lever. You remember at every earnings, I'm synthesizing the growth strategy amongst the two levers.
What we call the value-up, which is how we increase the value to our large install base, and the value-wide is how we expand the footprint to new customers. Let's zoom first on the value-up. There are three components. The first one is how we expand the domain coverage. I put some statistics, but just look at the manufacturing domain, just to pick one of them. It's a huge opportunity for both direct and indirect engagements. Second thing is the platform approach imply a new way to reveal the value to our customers, and we call it value engagement. In 2021, we have delivered 140 large transformation projects, which are really complex, because it's not only an IT problem, it's how you transform the organization at large.
More than 80% of them were on time, which is also extremely important given the level of investment those companies are doing. Alongside, we have doubled our consulting services revenue because more and more, what we do is not only to deliver the solutions, but the best practices attached to it. We need to advise our customers how they could transform themselves and how they should do it. As a result, looking at the deal value, we are doubling the value each time we engage with industry solution approach. That's for the value-up. Looking now value-wide. First of all, cloud is really a way for us to reach new users with new usages, and we are ready to accelerate without jeopardizing the business model. I'm insisting on this, Ruben. We come back to this, but this is extremely important.
Why so? Because today we have more solutions available on the cloud than we have on premise. Basically, the level of investment in terms of research and development is behind us. First of all. Second, we are offering several paths for our customer. There is no one single path to move to the cloud, right? It's not the same pattern for a large corporation than a newcomer, for an industry which is not equipped, for the one which has, as Bernard says, been starting to be equipped a century ago, almost. As a result, you know, and the last point, which is also important, if you look at the uptime performance, we are the highest standards of the industry with 99.98% availability. Clearly, all.
Everything is ready to deliver the target we set up, which is achieve a third of the software revenue on the cloud in 2025. Again, I'm insisting with the same level of profitability. We also continue to displace the competition, and again, with a very high win rate against all of the competitors. In average, it's more than 80%. As a consequence, every year, we are getting more than 20,000 new customers. That's a reality. If you compare with some of our competitors, it's almost, you know, sometimes the number of customers they have for the entire industry. In addition to this, I think something is happening. We have introduced the 3DEXPERIENCE platform in 2012, but at the beginning, we were focusing on the left side of the innovation cycle, right? We were symbolizing by the spiral.
To specifically develop, produce, deliver perfect product and services. It's not enough. As the economy is becoming circular, it's time now to include not only, you know, the supply chain, but the entire value network if you want to deliver the experience, as well as now to start to put into the loop the end users, whatever the end users is a customer, a patient or a citizen. More than a long explanation, I think a live demo is probably the best, and I'm pleased to welcome on stage with me, Florence Hu, who is leading the Research and Development for Dassault Systèmes. Florence, you have the floor.
Thank you, Pascal. Good morning and good afternoon. As Pascal said, in the Age of Experience, global transformation in how we invent, learn, produce, and recycle is happening. I propose today to discover how the 3DEXPERIENCE platform on the cloud is a catalyst and enabler of such transformation, fostering sustainable innovation. Let's start with the sustainability innovation manager. She gets an up-to-date and accurate assessment of the environmental footprint, AI-based synthesis of trusted and scientific knowledge. One click to set consistent objective at the level of each subsystem. The 360 sustainability data science experience is available in the work environments of designers. Design, simulate, and produce with instant sustainability feedback. At any change, the environmental footprint is updated, leveraging real world data. Alternative comparisons helps engineers make data-driven decision.
Let's discover now how the virtual twin experiences enable to invent new sustainable materials, reducing the eco-bill from raw or extraction to recycling. The platform provide the multiscale scientific virtual environment to model, simulate, and compare new materials from macro to nano, from final composite material to the resin chemistry. It ensures that the material deliver on its promise of sustainability while preserving the structural performances. Another way to minimize the environmental footprint is to lighten parts. Our cognitive augmented design technologies optimize the shape to reduce weight, while ensuring structural and sustainability performances, leading to global cost reduction. Let's discover now how to predict in the virtual world the energy consumption of the real world. Simulate, improve the aerodynamic performances, leveraging mod sim technology, and thanks to the Cyber Systems definition, compute the accurate efficiency of the new design.
Moving to production, the virtual twin experiences of global production systems enable to scientifically assess and minimize the eco-bill of equipment, shop floors, supplier sites, and logistics. This allows complying with local sustainability regulations while ensuring agile and resilient production. After several years in operation, the aircraft is dismantled. The parts serve as raw material for new usages, fueling the circular economy. Powered by the platform on the cloud, virtual twin experiences, which combine virtual 3D modeling and simulation with real world evidence, provide science-based consciousness to all stakeholders and help our clients enter into the circular economy. Now, moving from experience creation to experience in operation, let's discover with a few moments of life how the platform empowers everyone in the company, connecting the dots, people, data, and ideas in order to increase collaboration to accelerate innovation.
Let's start with product managers who need to understand market trends, competition, and consumers' expectations. AI-based data science experiences of heterogeneous data such as web, news, social networks, and enterprise data provide any user across the company with science-based and actionable insights. Leveraging semantic analysis and natural language, product managers engage an intuitive conversation with data in order to identify sweet spots and trigger the right innovation project, bring people together in spontaneous conversation, and set up the brainstorming session with 3D whiteboard to boost innovation while building a common memory. Innovation require the skills. Thanks to the platform, hiring managers benefit from an experience tailored for talents identification, combined with the 360 understanding of the skills evolution inside and outside the company. The platform empowers the collaboration all along the talent identification process, including concurrent edition of contract document or any other office document.
Processes are executed in compliance with company policy and optimized to remove bottlenecks. Automation definitely removes frictions and useless tasks all along the way. Talking now about compliance. How to set up the ISO certification related to energy management? With the platform, knowledge and know-how, such as norms and standards, are capitalized and shared to all stakeholders. A predefined project ensures a successful audit. The energy consumption is closely monitored from the individual equipment to the entire site. Finally, energy savings are nurtured and planned in a collaborative pipeline. Once validated, the execution is tracked, and the effective savings are measured. Thanks to the 3DEXPERIENCE platform and the low-code, no-code approach, business users get started right away with ready-to-use business experiences crafted for their functions. They benefit from the data science intelligence they need to take informed decisions.
As said, the platform connects the dots, people, data, IDs, breaking silos inside and outside the company. Now, let's discover how the platform empowered everyone in their private life, such as consumers with HomeByMe. HomeByMe provides to people a set of experiences to create sustainable, comfortable, safe home all along their life. Its vibrant community is creating amazing content that inspire people to imagine how to model and furnish their place. If they like ideas, they can rely on interior designers who will provide them the perfect solution fitting their room and their taste. Otherwise, HomeByMe AI, leveraging the millions of existing project, can imagine within seconds several proposals, once again, fitting their room and their taste. Thanks now to the virtual twin of their home, consumers easily engage with home retailers, whether they are specialized in kitchen, bathroom, storage, or simply selling furniture. You know what?
More than 25 million people have been already experiencing the HomeByMe universe to model and decorate their homes, and this community is a fast-growing one. To conclude, in the age of circular experience economy, the platform, a proven science-based innovation platform on the cloud ensures success and rewards of all stakeholders from enterprise to people while fitting their respective business and sustainability commitments.
Thank you, Florence. I think this demonstration are really convincing, isn't it? They are the proof point that we continue to invest to prepare the future. As you understand, the platform is not only a way for us to be game changer in the current competitive landscape, but it's also a multiplier. It's a multiplier to expand the value proposal, you know, from linear to circular economy. It's being reflected into the experience economy, but more and more into the sustainability as well. It's a multiplier also because it's a way to expand the audience, you know, by connecting people, data, and ideas, starting from the industry professional, the expert, right? The one we are serving since the beginning, moving to all the business community and ultimately, you know, to connect the consumer, the patient, and the citizens. This is.
This will be our next frontier. That's it for us for this session. Back to you, Rouven, I think, for the Q&A session, isn't it?
Right. Thank you, Pascal. Let's start the Q&A session. Bernard, I would like you to come up. We start first with some questions from the audience. If you can get a microphone. Here's the first question.
Good afternoon. Amit Harchandani from Citi, and thanks for allowing me to pose a question. Bernard, you made an interesting comment that you were doing metaverse before metaverse was being spelled. Having said that, it's become a topic of discussion over the past two years, definitely attracting a lot of attention. My question is, how has that changed the conversations you're having with your customers? Has the greater emphasis on metaverse introduced new discussions, new applications, maybe new industries where you are starting to see more doors open for your solutions? Thank you.
I think simply said, I can answer two categories of attitude. One category has been benefiting, understanding, transforming their company already, not with digitalization, but with the representation of what they do. The virtualization of the plane, the car, the object, the shampoo bottle, like what we do with P&G, for example. They said, "Well, it's interesting, but what's new?" That's one category. They understand how they are going to exploit that to create new environment for selling, marketing, when the quality of certain human-centric situation will be easy to reproduce. There is nothing new. Then you have another category, which I will call the ignorant category. They have no clue that the world has been evolving with massive virtualization of design and production.
They don't know it, simply said. They are still PDF on office document-centered companies, and they consider this as a revolution. Yeah, it's a provocative answer, but I think it's the reality of what I see.
Next question here.
Okay. Yeah.
Jay Vleeschhouwer, Griffin. In your prepared remarks, Bernard, and Pascal, you referred to industry solutions, which to me seems one of the more interesting and perhaps differentiable attributes of what you do. The company hasn't really spoken much in detail of the business or operational impact of solutions as compared with, let's say, your historical, let's call it, à la carte approach to selling. It'd be very interesting to hear from you about the business impact of industry solutions in terms of the various industries. We've asked you about the life sciences strategy. Perhaps you could also talk about that approach for other industries and how does it affect your R&D, for example? I mean, you had a brand-oriented approach to R&D. Do industry solutions affect how you engage in R&D?
Thank you for the question. Simply said, the end result of industry solution is that we have newcomer doing airplanes now, doing it with the vanilla solution. They use our industry. They just do the plane, the entire plane without adding anything to it, to the solution we deliver. Same for EVs. This has never happened before. There was always legacy connection with systems. Now it's so simple. If you look at the e-aviation or vertical takeoff company, new companies which are doing that or even EV companies, they are basically using the native cloud parameterize to just run the entire business. That's the difference between before and after industry solutions, and there is no one in the competitive landscape that can do that. Really, the effect is the numbers that Pascal presented.
Jay, I think the way we have articulated the portfolio around role, process and solution, it's a way to give different output. For the role, the goal is really to empower the users. In the end, what we measure is really the productivity gain. They can do more with at least the same level of investment, and sometimes they can do more with less. At the process level is how you do things right the first time. Because in the collaborative environment, you have to orchestrate many different worlds, many different organizations working together. You know, having one single source of truth is becoming extremely valuable for them. At the solution level, we are impacting the economics of the company, really the business model at large.
As you can see in this current environment, many companies declare, you know, they want to have the services part of their product or services attached to their product to become, I don't know, a third of their revenue in the future. To do this, they have to reimagine the entire company. Having the virtual twin of the company is becoming a necessity for them. That's how we are encompassing, if you want, the different set of value. We have, I think, a complete KPIs for all of them. You will see in the following presentations, you know, in life sciences, manufacturing and infrastructure, they will come back and give you concrete example.
Next question. Do we have any question here on the other side of the room or?
Yeah. There seems to be.
Okay. No. Okay.
Just in front of us.
Yes. Yeah, yeah.
Yes. Thank you very much. It's James Goodman from Barclays. Fantastic to see the 2024 targets reiterated this morning, to hear your confidence in the presentation around sustainable growth. I think you said no matter what, Pascal. In value up, you talked about the doubling in 3DEXPERIENCE penetration to 2/3. I think you've talked about that by 2025. Can you tell us what the drivers are of the acceleration of 3DEXPERIENCE penetration now, which parts of the portfolio and how we should think about you achieving that level of penetration by 2025?
I think for the vast majority of the large account, we are already set. Right? We engaged with them almost a decade ago, and I was stating in my introductions, it's not anymore a topic of discussions. The question is much more how we extract the maximum value of the platformization of the industry at large. Not all of them are yet fully deployed because certain industry, like the aerospace, you have to go program by programs. At least for everything new they are launching, it's already a reality. Where we still have work to do is through the partners. I think it took some time for them to understand the value of the platform, so I think it's behind us now. Now they need to convince their own customer about the value of the platform.
It's a different way to engage, it's a different way to articulate the value. It's a different activities also for them. It's much more consulting than the pure IT implementation, especially if it's on the cloud. When you do this and you summarize, I think we are on the right track to deliver the commitment, right, as crafted a long time ago, which is to serve of against what we used to call the PLM market before. When I stated this commitment or this objective, it was before the acquisition of Medidata, right? Now having expanding into a new verticals where Medidata is a platform, right? By and large. I think if you do the sum, we will probably overachieve the target because the new industry, to a certain extent, they are already platform-based. That's from a momentum where we are.
More questions? Here.
Neil?
Yeah.
Thanks. Neil Steer from Redburn Partners. Pascal, you in your presentation, you obviously reiterated your cloud targets, but once again was specific that that will be achieved with no disruption to the margin and the profitability. It's obviously become quite a topical debate in the market with other companies highlighting the impact and the challenges they're seeing. Can you just describe why you're so confident in there being no disruption to the margin target as you see that cloud adoption? Thank you.
Neil, I will just say a few words because you will see in Rouven's presentation, he will address this topic at large. Just one data point for you. We are already doing more than EUR 850 million in the cloud, which is much bigger than any traditional competitors we have. Right? Real cloud. When I say cloud is we are managing the services, the online services on behalf of our customers. It's not us selling a license and our customers implementing with a cloud architecture. Have you seen pressure on the margin? Have you seen a different CapEx? I don't think so. I think we are already at scale, guys.
Why I'm repeating myself on this topic, the investment is done from a research and development standpoint, and the market is moving progressively because there is no way that a large company could shift overnight to the cloud. They have to take care of their legacy system. This is a benefit, again, no doubt. All of them, they have a cloud roadmap between 5-10 years for the longest, and they will move, and we will progressively substitute the traditional, I would say, on-prem revenue with the cloud. That's. You will have more details. You will have basically reasons to believe of what I'm stating with Rouven's presentations.
All right. I think that's a very good transition for us to conclude on this Q&A session. Thank you for your questions. I will just check with my team because we are right at time actually for the next session. I would propose that we skip the break, and we continue with the life sciences sector. Right? We stay on time.
Yeah.
Right. We just started. We don't need a break right now.
You are the master of ceremony, Rouven.
With this, I would like to ask Tarek and Anthony to come up on stage. Yeah. Do we need a slide master? Are you surprised, Tarek? No, right?
Yes. Thank you.
Are you surprised or not?
I love surprises.
Okay.
Nice. Well, it's certainly.
You don't have to wait for him in the break, right?
According to the monitor, my time is up. It's really an honor to be here with all of you today. Had a great chance to speak with many of you yesterday evening and earlier this afternoon, and I know there's a lot of enthusiasm for the life sciences sector. Also a lot of questions, which is why my voice is a little bit hoarse at this point. I hope what you take away from our presentation, you know, Anthony's joining me on stage, I'm really pleased about that, is that one, we're very confident in our multi-year plan that we're gonna achieve the results that we expected and perhaps overachieve them. Two, we are incredibly enthusiastic about the opportunity that is presented before us.
I hope that when you've seen our presentation and you see how excited we get about the things that we're going to be doing and that we are doing today, that you too will come away confident about the plan as well as excited about what life sciences can bring for us. I think it's always important to reiterate our mission because when you think about life sciences and healthcare more broadly, and now I've stepped into the role, as you I think many of you know, I was a Co-founder of Medidata and formerly the CEO, but now I'm the sector board chairman, and we think about healthcare and life sciences much more holistically. You know, what is our presence gonna be not just three or four years from now, but in 10 and 20 years?
That's really exciting because I think it aligns so well with the mission that you've heard from Bernard and Pascal and other members of the senior management team around really wanting to have an impact on society. That was one of the key reasons we came together as organizations, and I will talk about our integration a little bit later because there are a lot of questions about that. That fundamental aspect of our culture has really been very important for us, and we've received a lot of enthusiastic support from Bernard and from Pascal and from everybody on the senior management team, and that has allowed our two organizations to work so closely together and really make this a lot of a success.
I think Bernard yesterday at the dinner declared the integration a success, so we thank him for all the support in making that happen, and we couldn't be happier. Just taking a step back, you know, in the past three years, we have really been humbled by the pandemic. You know, as a society, we all became patients, and I think that was really eye-opening, the importance of health. What it also pointed out to us is the importance of science. Without science, we would not be where we are today. Without the right technological platforms to take that science from conception through to delivery of a commercial product, we wouldn't have been able to deliver 13 billion vaccinations in an 18-month period. It just wouldn't have happened.
I think there are a lot of lessons that we learned because of the pandemic, and I think us coming together when we did was really opportune because Dassault Systèmes Life Sciences played such a key role in making, you know, in effectively helping people around the world in a meaningful way, which is something we always dreamed of doing. We just didn't think we'd be doing it that quickly, and under these circumstances. Thank God, we were able to do that. I think the lessons learned during the pandemic by the life sciences industry are really going to carry forward. It's a question I got a lot, which is, you know, did you see a pandemic bump and is it going to go away? Are some of the trends going to stick?
I think you'll hear from us today that we really believe that going forward, the lessons learned about needing agility and in terms of manufacturing, needing logistics, understanding how to compress timelines in clinical development, doing modeling and simulation of molecules, all of those lessons have, I think, really imprinted in the industry, and they are going to be carried forward. We're in a great position as Dassault Systèmes because of the breadth of our capabilities and our solutions, really going to be able to be a strategic partner to industry going forward. Let's take another quick look at the industry overall, because this is another question.
I know with the current macroeconomic environment, people, especially those who are not as familiar with life sciences, get a little bit nervous about, you know, what is the impact of rising interest rates, higher inflation, a slowdown in the economy. Having lived through two decades of, you know, recessions and the like, what I can tell you is that the life science industry kind of moves to its own rhythm. What really drives growth and what drives the way the industry thinks about growth and spending money on new technologies is the innovation cycle. It's much less has to do with the with what's happening from a macroeconomic perspective, because at the end of the day, health is the number one is the most important thing that people think about.
You are going to get your therapy or go to your hospital irrespective of what's happening in the economy. That's why life science companies have been so stable through difficult economic times. As we think about what's happening in the overall innovation cycle for life science companies, that's where we get so excited because a number of years ago, we started to move down an innovation cycle that was very positive with the end goal for most pharmaceutical companies and biotech companies really being on precision medicine. What does that mean? It means focusing a therapy on the specifics of an individual patient or a small group of patients. There's a lot that goes into thinking about that. You have to do a different kind of science. You have to do it. It has to be more powerful. It has to be faster.
You also need a different kind of agility to get from conception of a molecule through to the development of that molecule and the manufacturing and ultimately getting it to the right patient at the right time. Those are pieces of the equation that we are very well suited to be able to provide to our customers in a strategic way. I think it's important to note that in over the last couple of years, 35% of new drug applications and those that were approved by the FDA actually were in the realm of personalized medicine. Personalized medicine is here. It's just not at scale. In order for it to scale, a lot has to change in the landscape for pharma companies. We're gonna be touching on what it is that we think or what we see as the opportunity there.
The other thing that's interesting is that 70% of all trials over the next couple of years are going to have a digital component. Again, it plays to the strength of the solutions that we bring to the market. Just a couple of metrics to give you a sense of where Dassault Systèmes is now in the life sciences, you know, and where we are from in the ecosystem. 9,500 customers, 1,500 new customers over the last two years. That's a tremendous amount of growth. What I think that's telling you is that we're taking market share, right? Our footprint is large, but we continue to take market share. Our competitive position is extremely strong.
Soon, we'll talk about why having 7 million patients and all this connectivity to physicians is important, but we collect a lot of data. We run a lot of clinical trials, and that's extremely important in terms of providing us with a unique opportunity to see what's happening across the globe, across all our life sciences customers. As you'll hear in a couple of minutes, it gives us the unique opportunity to draw insights and knowledge for our customers based on the data that we have. That is a unique asset, and it's something that we're starting to really understand how to talk to our customers about. How to do much better analytics that are creating new opportunities for our customers to do better science, in fact. You'll be hearing from Sastry Chilukuri after our presentation, who'll be talking to one of our customers.
He's the CEO of Medidata these days. He's gonna explain a little bit of how we can really drive value for our customers. I think all in, if you look at the metrics that we have, our market share, the fact that the most difficult and complex clinical trials are run on our platform. You see that 64% of novel drugs. Those are the more complicated to develop. They actually are run on Medidata's platform. That's why we feel so confident about our 13%-15% long-term growth. Now, just a couple more metrics that, you know, I sometimes like seeing charts, especially charts that look like this.
You know, over the last few years since actually the time of the acquisition, we've seen a 50% increase in the total number of clinical trials of studies that we are running. We've seen the total patient number go up by 50%, and that's good because it means more data for us to use to draw more conclusions and create more value for our customers. The active studies have increased dramatically as well. We don't have a competitor operating at this scale, and there's a reason that our customers put their most important IP on our platform because they know it's going to be safe, they know we can deal with complexity, and they know that at the end of the day, Dassault Systèmes is a very strategic partner to them.
In terms of the integration, I think you can see me smiling which is a good thing. You can see Anthony smiling. No, you know, I think the number one takeaway here is yes, the numbers are important, and we are achieving the numbers that we expected to and, obviously. They reflect something more fundamental, which is that this has been a really good coming together of two like-minded organizations. I think both organizations want to learn. Both are open. Both hold themselves to very high standards in terms of integrity and how you deal with customers. We are science-based, and we really love technology and having an impact on society. That's really important. The way it manifests itself, yes, very good results. It's another question that I've been getting consistently, what have your attrition rates looked like?
Because almost any integration, almost any merger, attrition rates go up, and then you throw in a pandemic and the Great Resignation. I am proud to say that our attrition rates have not changed from prior to the acquisition through where we are today, which is, I think, really it's a testament not just to, you know, I can be enthusiastic, but it means that our employees are enthusiastic about being part of this larger family and this larger mission. I think other aspects of the integration are going very well. You know, some of the back office integration has happened as it was supposed to. Again, despite the fact that we had a pandemic. I think it's been a very good journey for us, and we're excited about what the future may bring.
I'm gonna touch on one last aspect of it a little bit after Anthony's presentation, but I want to hand it over so that you get a bit of a sense of some of the products that we have and what we're doing.
Thanks, Tarek. Welcome, everyone, and I too appreciated the conversations last night. I know many of you are newer to the life sciences sector and to maybe some of how clinical research works. We wanted to take a few minutes today during the presentation to touch on how the brands have come together to form the life sciences sector. We're gonna dive a little bit into some of the profound industry changes that we're in the middle of. I think Tarek touched on them. We had hints of these changes in earlier conversations today. We are in a transformational time for the life sciences industry and the clinical trials industry specifically, and very well-positioned to address the new needs of that industry.
First, I think what you're learning, hopefully last night and today, is that the integration of all of these brands and the slices of capability that we can take from the entire brand portfolio at Dassault Systèmes, coupled with the clinical trials expertise that has come since the Medidata acquisition, has really provided this interesting feedback loop and a way of addressing comprehensive needs of customers much more broadly than any of us ever did alone. That synergistic effect is very differentiating for us in a market that is trying to move faster in terms of clinical development pipelines, but they're also trying to move into more longitudinal relationships with patients, with consumers from clinical development all the way through clinical research into commercialization, into manufacturing, into new drug discovery, iterating that loop, if you will, much, much, much faster.
The tools and capabilities that we bring as a synergistic group of brands in the life sciences sector really enable that to happen. We are in a transformational time for the clinical research industry. For those of you that are not as familiar with clinical trials, the way clinical research has traditionally worked is a patient is recruited to a study. They visit a hospital or investigational study site periodically, often every six weeks or eight weeks for the life of that trial. Some of these trials are very quick. Some can last six months, 12 months, even several years in many cases. It's been a challenge for our industry from the beginning to find patients that are geographically close enough to a study center that they can participate in the study.
It's been very difficult to keep those patients engaged throughout the life of a study as they go back and forth and in some cases, traveling long distances to get to a study center. What's happened during COVID, because of quarantines and difficulties with hospitals being able to even entertain patients at all on a clinical trial, is the entire industry has moved to a state of what we call decentralization. Meaning more and more of the data are captured off-site. More and more of the data are coming from patients themselves, holding technologies in their own hands and offering data in real-time as they participate in a study with fewer, and in some cases, zero visits to the actual study center.
The beauty of this technique or this new method of doing clinical research is it not only brings the data or the investigation much closer to real-time. Patients are entering things as they happen to them on a daily basis, rather than in a periodic every six-week site visitation. It also helps us engage patients and stay much better connected to those patients throughout the life of the trial. It also leads into the other synergies that we talked about with the brands where we wanna follow patients for a long time after these studies are completed.
We wanna feed their data back into new studies, and we wanna make sure that all of the different parts of the life sciences sector at Dassault Systèmes can benefit from the larger amount of data, the higher amount of decentralization, and the much bigger kind of complexity that we're seeing in clinical research. Show a video here that we think tells the story a little bit of how we are approaching decentralized trials and expect to be the industry leader in that space. If you could play the video, please.
This is a clinical research site. This is also a clinical research site. This is clinical data. This is also clinical data. Clinical trials don't look the same today as they did yesterday, and they won't look the same tomorrow. As more and more technology is used to decentralize trials, the entire clinical trial experience is transformed for everyone involved. This new reality has also raised new questions. Medidata has been addressing these challenges head-on for over 20 years. Now, with our expanded decentralized clinical trials program, we are delivering the industry's only scalable end-to-end offering for trial decentralization that connects trial experiences for patients, sites, and sponsors. Already used on tens of thousands of studies every year, our trusted and scalable platform now includes access to a national network of DCT sites standardized on Medidata technology. Medidata ran the first decentralized clinical trial and the largest one.
Now we wanna help run the most important decentralized trial, yours.
None of these methods for collecting data in a decentralized fashion even existed in our industry more than six or seven years ago. We have piloted these studies. We've run, as you heard in the video, the very first trial, which was a partnership with Pfizer to begin exploring decentralized trials. Now we've run several very large decentralized trials with hundreds of thousands of virtual visits with patients who previously would have had to visit a study center in order to do those studies. The reason that this works is that we've built a platform of tools and capabilities that you see on the slide.
I won't walk through this whole thing, but what's important to note is that everything above the line is part of the traditional Medidata Clinical Cloud offering that's already used in a majority of the world's clinical studies every day and for two decades now. Site-based users, hospitals, clinical investigators, people that are running these trials are already on the Medidata platform in huge numbers. What we've introduced below the line is a whole new suite of Patient Cloud functionality that allows decentralization to happen because the toolkit used at the sites and the toolkit used at home now live in the same sector, in the same universe as the same set of experiences for everyone involved within the research program.
Customers, our customers who are looking for this because of the acceleration COVID gave this entire method, our customers are looking for opportunities to take studies, decentralize pieces of them, in some cases, decentralize large pieces of them, and that's very complex task to undertake without a toolkit like this. I know, Tarek, we've got a few good reasons to believe that all of this is starting to work, and I'll pass it back to you for that.
Thank you, Anthony. I know we're running a little bit over, so I'm gonna be very quick with this. You know, Anthony and what he's doing with Patient Cloud is another reason to believe. It's the future for Dassault Systèmes' Life Sciences and potentially for healthcare in the future because it brings us to the patient, it brings us to the physician. That's a key part for us. The other is that we are also very excited and have this unique data capability that is also manifesting itself, but you'll hear from Sastry about that in a minute. We have multiple reasons to believe.
I'm not gonna take you through this slide, but what I am going to tell you is, about 18 months ago, we created the Life Sciences engagement model. In terms of thinking about how our integration is supposed to work, it's leveraging the best of Medidata's sales channel and leveraging the strength of Dassault Systèmes in the geos. We brought that together to really focus on better value articulation, not just for the core Medidata products, but for BIOVIA, for CATIA, for DELMIA, for NETVIBES, going to our customers with this very broad solution set and explaining how we can actually transform their businesses. We're starting to see the fruits of that already. 18 months is not a long time, but we're seeing some very good reasons to believe, and some of them up here on the screen.
It gives us a lot of excitement and confidence in what our growth trajectory will look like going forward. With that, I'm gonna ask Sastry Chilukuri, our CEO of Medidata, to talk to you a little bit more about our capabilities from a data perspective, and talk to one of our customers, give you an example of how we're creating value. If we can tie in Sastry, please. He's gonna be joining us virtually. Okay. Thanks.
Great. Thank you so much, Tarek. As Tarek mentioned, we're sitting on this incredible data source of 28,000 clinical trials and nearly 8 million patients, and it continues to grow on a daily basis. What makes us even more excited is this data is contemporaneous, and it captures everything that's happening in the market today. We're taking the first steps towards creating the virtual twin experience for the human, as we recently talked about.
If we bring up our slides, I can talk a little bit about the progress that we've made with synthetic control arms, which is a truly remarkable capability that we've been able to build. What synthetic control arms do is they create virtual patients out of historic clinical trial data and replace the entire control arm of a clinical trial. What that is instead of going out and having to recruit patients into the control arm of a study, you can actually replace them using historic clinical data. Our data is truly differentiated because it's regulatory-grade, and it comes out of historic clinical trials, and it truly represents what's happening in the industry. This has allowed multiple regulators, both in EMEA as well as in the U.S. FDA, to be able to accept this.
You've seen the press releases from Celsion, Medincell, and Plus Therapeutics most recently, talking about how they've used our synthetic control arms to replace patients on their control arms and the speed and cost savings that that's been able to give them. In addition to these customers, we actually field close to 300 requests on an annual basis, and it continues to grow. Our customer base represents the entirety of big pharma, mid-tech, biotech, as well as the government across the globe. We're currently active in over 20 indications and will continue to expand the number of indications and disease areas that we're active in as we continue to scale up this capability. This represents a remarkable step towards the creation of the virtual twin experience for humans, where we are replacing the need for the entire control arm using this virtual experience.
Additionally, beyond using these synthetic control arms and the application of the data, if we go to the next slide, we're seeing the application of this data across the entire life cycle, starting from discovery and research to be able to make better go/no-go decisions, to be able to oversee the ongoing clinical development. This is important because we are operating in an ever-changing, constantly dynamic environment for clinical trials, be it because of the war and the pandemic. You're seeing study sites start to perform or stop performing, shortages in terms of supplies. How do you stay on top of all of these changes happening in the clinical development process is absolutely critical and all the way through commercialization.
If you go to the next slide, one such example of using data to be able to generate new insights into disease is the work that we recently presented at ASCO. Here, we were able to use our historic clinical trial data in CAR-T therapies to be able to identify predictors of patients who are at risk of developing incredibly serious side effects. These are patients that have died and therapies that have been stopped because of the adverse events that they were able to generate. Now, for the first time, we actually have tools and predictive models that allow you to be able to identify which patients are at risk, as well as how do you intervene earlier to be able to save these patients.
The work was so groundbreaking that it was picked up by Fierce Biotech in the middle of ASCO, when all of the companies were sharing their own oncology data across all of their clinical trials. To talk more about the application of synthetic control arms, as well as the broader application of our data across the entire life cycle, I had a chance to interview Dr. Rajesh Malik, Chief Medical Officer of G1 Therapeutics, yesterday. We'd love to share the video that we recorded with him yesterday. Can we play the video? Welcome, Raj. Great to have you on today. For those of you who don't know, Rajesh Malik is the Chief Medical Officer of G1 Therapeutics.
G1 Therapeutics is a commercial-stage company active in small cell lung cancer with an approved product, COSELA, that was approved last year for extensive lung cancer with myeloprotection. They also have an active development pipeline that we are collaborating on that's focused on antitumor efficacy. Thank you, Raj, so much for joining us this morning.
Thank you, Sastry. Very happy to be here.
Great. To get us started, why don't we dive into synthetic control arms? It's an area that we have received extensive coverage on over the last few months in terms of the regulatory approvals. More broadly speaking, where do you see the applicability of synthetic control arms, and what do you see as the value that they create for clients such as yourself?
Yeah, happy to discuss that. This is, I think, a really interesting area. You know, I think synthetic control arms can help in probably a couple of different ways. I think from a patient perspective, one can use data to reduce the number of patients who are potentially exposed to a therapy that may not be as effective, being on the control arm. The second is that it could also help to speed up the development, so you can get the therapy eventually to patients faster. I think from an R&D perspective, it's helpful in early stage of development for generating proof of concept data that could help to make decisions in terms of where one might want to develop the drug.
You know, potentially even in later stage development, as you all have shown, where it could actually be a control to reduce the number of patients for an eventual phase III trial. I think that it's. You know, as more and more,
Patients are exposed to different therapies and the ability to generate diverse external control arms. I think it's an effective and efficient way of incorporating it in the development program.
As we're starting to get into the understanding the applicability of our data and the AI, we're seeing a tremendous amount of potential in the ability to model and simulate trials early so that it improves their overall probability of success. It's an area that we worked on together. Can you comment a little bit about the broader applicability around the modeling and simulation of the trials using this data?
Yeah. Here again, I think there are several areas where there could be a benefit. You know, initially in even in the trial design phase, as one is thinking about eligibility criteria, to sort of mine the data to try and kind of understand what types of criteria could potentially hinder trial enrollment based on the experience that you all have with the data. It can help from that perspective. I think it can also help from potentially from even site selection based on sort of the competitive landscape that you all are seeing, obviously all in a blinded way, but in terms of where trials are ongoing. I think the second component is during trial conduct.
Particularly over the last few years, we've all had challenges running trials, first in a pandemic and then in the current geopolitical situation. You always want to see, you know, how are our trials performing relative to our peers. I think being able to get some real-time data analytics can also be helpful during trial conduct. I think it could help in a couple of different ways.
Thank you so much for your time today, Raj. I think that's all the time we have today. Look forward to catching up more extensively in a future interview.
Absolutely. Nice to talk to you, Sastry.
Thank you.
Thank you, Sastry. Thank you, Anthony. Again, just to quickly wrap up, I think you have a little sample of the unique solutions that we're bringing to the marketplace. I think as you think about the future of where life sciences and healthcare is going, we get very excited about the positioning that we have and the strengths that we're bringing to the market and to our customers, and ultimately the impact we're having on patients. Stay tuned, but we're feeling great about what we're doing today and what we see in the future. Thank you.
Very good. Thank you so much, Tarek, and,
Thank you, Rouven.
Anthony and Sastry for this great insight.
Well, Rouven, we're very proud of you being the CEO. That's so. I sometimes joke that, you know, maybe the merger goes both ways. It wasn't just an acquisition.
Okay.
Thank you.
No comment.
Yeah.
Thank you for the endorsement, Tarek. With this, I'd like to welcome Florence Verzelen, our Infrastructure and City Sector Board Chairwoman, for the next section. Thank you.
Thank you, Rouven. Hello, everybody. Pleasure to be with all of you today. I'm very happy to be discussing with you today our infrastructure and cities ambition. Why? Because as Pascal just said, this sector is currently undergoing huge transformation. We have always been very influential in this sector because we were the one who invented the virtual twin of a city with Singapore in 2012. In view of what is happening today in this sector, with already half of the world economy, but who is going to expand a lot because of the big investments that are being put into that sector by the stimulus package of the different countries, and of the challenge of bringing to net zero a sector that represents 70% of the world emissions, well, this sector will have to adapt, and to adapt fast.
This sector will need to leapfrog on productivity where they are today, as per BCG, 20 years behind compared to the car industry. They will need transformative solutions, they will need disruptive approach, and at Dassault Systèmes, we think basically they will need the platform, the 3DEXPERIENCE platform. I like to spend the next 10-13 minutes discussing with you how we see the infrastructure and cities sector and its challenges, what are the transformative solutions that we are now bringing to the market, and what kind of ecosystem are we fostering in order to transform it. How do we see the infrastructure and cities sector? Well, we really see it as three different industries. Infrastructure, energy, and materials first. All the industries, transport infrastructure, solar plant, wind plant, nuclear plant, mining industries that are related to project-driven.
There is everything related to architecture, engineering, and construction, which is everything related to construction and the value chain of construction. Last but not least, cities, public and business services. Basically, all the services and the authorities, public authorities, that are helping our economies to be resilient. As shown by Bernard and Pascal earlier, they have an impressive PAM and TAM, and as well, the higher growth of all sectors. Why so? Well, because they will have to overcome very important challenges in the next few years. I already discussed the level of greenhouse gas emissions they have to bring to zero. Even before 2050, they will have to deal with the power market disruption challenge. We know it because we are all buying electricity and fuel.
The prices are skyrocketing because. Well, we are using three times more electricity than 20 years ago. Basically, we need more power, and we need a way to produce that power, which is sustainable and resilient. Not depend from country that might be difficult on the mid-term, short-term, and long-term basis. Third challenge, license to operate. I discussed $94 trillion of investment in that sector, but a lot of infrastructure projects are stopped because of the lack of communication between citizen and the government or the local authorities. We need to find a way to create that communication skills. First, that communication ability. Fourth challenge, supply chain disruption. We've seen it.
Like in 2021, there has been three times more disruption than in 2019, and it's even worse beginning of 2022, as you know. Last but not least, construction industry productivity. As I told you, they're 20 years behind compared to the car industry. How are they going to manage? This is exactly where we think 3DEXPERIENCE platform is the right solution. Because when you think about that, to overcome each one of these challenge, basically what you need is three things. A platform in order to to link the ecosystem together, to link the value network. Model and simulation capabilities to do the right thing right the first time, and system of system capabilities. We, as a system, are basically the only players that can do that.
In order to do that as soon as possible, together with the infrastructure and cities team of vice presidents that are working on this industry, we have built six plans that are, for us, six ways to address these different challenges in a very consistent way, with a very clear portfolio, and that will help us help the world. What we are going to do is really to address the challenge of sustainable materials and recycling, because we need new materials, sustainable materials to fuel the economy. We have built solution to foster renewables and new energies. We are working on solution for resilient and sustainable cities. We are working on transforming the construction ecosystem to make it a real value network.
We are fostering solutions that will help address this $94 trillion challenge of transportation infrastructure. We are also working on improving the logistics and supply chain visibility in order to help everybody on this planet, including in the manufacturing industry, to have more reliable and resilient supply chains. I don't have enough time to tackle all these six plans today, but I'm going to focus on four of them, beginning by sustainable materials and recycling. As discussed by Pascal, sustainability is indeed super important, and in order to fuel that sustainability, we need sustainable materials. To have sustainable materials, what do we need? Well, you still need metals and minerals, the right ones, but you need to extract them in the right way, the most sustainable way.
We do that with solutions that we have developed and that are working extremely well, as proven by Zijin. Zijin is the biggest copper mining company in China, and they're using our solution to extract copper more sustainably. Then once the metals and minerals have been extracted, you need to improve the performance of the materials, and that's what we are doing with lab excellence and materials excellence. You've seen the demo of Florence earlier on, so you've seen the platform in action on that. Once you have performant materials, you may need as well to produce them, produce some of the other materials in a more sustainable way. For example, steel. Steel, they represent 7% of the world's CO2 emissions.
Well, we have developed solutions that help improve the processes with a system approach in order to decrease the percentage of emissions, but also improve the planning and scheduling, as well as the end asset integrity. We have engagement with huge companies like United States Steel that are proven that it's working, and it's getting more and more traction with all the other steel companies. This is what we are doing on sustainable materials and recycling. It's super interesting because it's also fueling what Florence has shown on lifecycle assessment. Having this impact improved is going to fuel all the product on which we are going to do lifecycle assessment in manufacturing. The second plan was on renewable and new energies.
Indeed, we need to develop very soon more renewables, like but also new source of energy, baseload energy, in order to fuel our territories. To do that, well, we are doing two things. We are, of course, continuing to foster renewable energy. We are already in three out of four wind turbines in Sweden. We were for a long time only on the simulation part, and now we are really expanding to design, manufacturing, as well as insertion of the wind turbine with the simulation of the territory and how the renewable energy, which is an intermittent energy, is going to be inserted in a sustainable way with the right batteries in the territory. We are doing that in project like the ModéliScale project in France.
At the same time, we are also helping the industry developing a new source of energy. Bernard mentioned the NAAREA project earlier today. NAAREA is a very interesting project because what do they want to do at NAAREA? Small nuclear modular reactor. What's the idea? The idea is that when you want to do a big nuclear reactor, it's often a first of a kind. It takes five, 10 years to do, and it doesn't bring a quick solution. If you do a smaller reactor using the 3DEXPERIENCE platform, with a system view, connecting all the value network to work on this reactor and planning a production of this reactor like a manufacturing process, like you would manufacture a car. Well, you basically do a program of small nuclear reactor.
You can manage the small nuclear reactors as a fleet, and you can move them easily, and you can have them quick to market. That's the vision, and that's the vision that is possible for NAAREA that they are currently conducting on the 3DEXPERIENCE platform, in the 3DEXPERIENCE platform with all their value network. Our third program was on resilient and sustainable cities. I'm going to be quick because I'm running out of time. Basically, what we do on this program, which is super important, is to help cities plan for resiliency. Currently, 60% of the city are at risk of a climate disaster anytime this year. Their need is to plan for that climate disaster. What will happen if there is a flood on the city of Keihanna in Japan?
Well, now they know because they did the simulation of the city on the 3DEXPERIENCE platform, and we did it together with our partner, NTT. We are doing the same kind of work and simulation in Saudi Arabia with AlUla project or in China with the Qingdao Innovation Center. The last program I wanted to discuss about was what we are doing on construction. I'm sure all of you have heard about what we are doing on BRiCK, basically using the virtual twin of a building in order to help get the right people at the right time and optimize everything during the construction. What we're doing with BRiCK, we are also replicating to a lot of supplier of BRiCK. For example, Kajima Construction, they are doing facade and using the 3DEXPERIENCE platform and virtual twin of the facade.
They could improve by 30% the efficiency of the design, engineering, and fabrication. These are basically the kind of solution we are bringing to market for the infrastructure and city sector. I think these are really transformative because they bring this platform approach that was missing in this sector in order for the sector to leapfrog on efficiency. In order for us to really win that sector and help it overcome the challenges that are here now, well, we really have a two-approach strategy.
Of course, we always begin by doing first of a kind with a real big reference that prove to the market that our vision is the right one, that the leaders, the most innovative players are adopting it, so that the other players know that it's possible to replicate. We are also, for this sector, trying to build a new ecosystem of players that is also going to help us to evangelize on our vision. This is what we are doing, for example, always with brick, because the vision of brick is not only to have the virtual twin of the building, it's also to, in a second stage, on which they are working now together with us, is to build each of the virtual twin of a building with virtual bricks.
Like 100 type of Legos that they will assemble to do any kind of building. What is interesting is that each virtual brick will be done with a certain number of craftsmen who will be prepared to install the brick, eventually with microfactory close to the construction site, and that will make the construction always more sustainable and always more efficient. What is interesting for us is that it's going to help all the ecosystem of brick to jump on the 3DEXPERIENCE platform experience. That will help them really embark and engage on our transformation. We are doing similar project with all other actors like Orange, Renault, ST, Thales, where we have build a consortium on Software République.
This consortium is about creating use case on the platform for mobility services, energy management, and connected vehicles in the city. Again, in this consortium, it is going to engage on this use case with the 3DEXPERIENCE platform. We have other players on top of that system and our usual ecosystem that is advocating for our solutions. With that, with the solutions that we are developing, with the ecosystems that we are fostering, we think that, well, that should allow us to not only reach our objectives in terms of growth, but also basically to help make the planet sustainable and resilient for citizens, and therefore to harmonize products, nature and life. Thank you.
All right. It is now time to share our ambition for the manufacturing industries. More precisely, we are going to share it through the voice of our clients. Dassault Systèmes has been serving manufacturing industries since successfully and continuously for many years. You know that. As a trusted partner for industry leaders, we provide these industries with all what they need to differentiate since our genesis. Can you imagine a new airplane program, a new satellite, a new machine, or even diapers at Procter & Gamble without our solution? Manufacturing sector, accessible market represents by itself, half of the market Dassault Systèmes wants to serve, which correspond to $50 billion opportunity market. Our footprint in these industries are still growing. We continue to provide additional value to gigantic install base and also their value network with the 3DEXPERIENCE portfolio. A few examples: Renault.
Renault adopting 3DEXPERIENCE on the cloud industry solution as an inclusive platform for all the enterprise, including costing, purchasing, quality. Jaguar Land Rover accelerating electrification through implementation of 3DEXPERIENCE Cyber Systems industry solution and data science. Several high-tech clients deploying the end-to-end collaborative development environment for smart electronic products, result of our partnership with Cadence. At the same time, we are serving with our unique 3DEXPERIENCE cloud industry processes and roles the emergent player that we call the shakers of the industry. They're all taking this out of the box, like Renault, by the way. Canoo, Hopium for hydrogen vehicle, Lightyear for solar powered vehicle, Vertical Aerospace to be an aviation for air mobility. We'll also hear about Rivian in a moment. Let me share with you some observation.
First one, since 2020, we observe a growing number of companies committing to become carbon neutral. It's obvious we take more from the planet than it can provide to us. It's a crisis of balance. The topic is sustainable eco-bill. In this endeavor, manufacturing companies are transforming super fast, extremely fast, to become the solution for a sustainable world and not anymore a problem. 75% of the industry executives declare an imperative to include sustainability in their processes, but only 20% are currently doing it. We witness now that the adoption of the 3DEXPERIENCE platform, science-based eco-bill, and circularity solution will be the catalyst and enabler of this revolution to tackle the challenge. Let's take the example of on-road transport.
To respond to commitment from European and Asian countries to ban the sales of gasoline engine, gasoline vehicles in the coming decades, electric vehicle projects are becoming the new norm. As I speak, 85% of electric vehicles on the market or under development are designed with the 3DEXPERIENCE platform, and namely with CATIA for the engineering. I'd like to share with you an example of a recent 3DEXPERIENCE win on the cloud, out of the box, with Xos Trucks, producing last mile delivery electric trucks, chassis, and complete vehicles, and delivering the services to operate them. They're transforming. They wanted an out-of-the-box solution to support their exceptional growth. 170 users added in the last months. They want to connect real time to their multiple design and supply partners.
Beyond the virtual twin of the vehicle, you see here what they did is they built a virtual twin of their two U.S. production sites to support fast ramp up. That's, I guess, a reason to believe. Now, the same type of transformation is happening in all industries. I'll make it simple, all the segments and requiring similar, science-based approach powered by the 3DEXPERIENCE innovation platform. You see some examples here. Now, I want to share with you a second observation. Adoption of 3DEXPERIENCE is also driven by the transition from product-centric to experience, centric revolution. Consumer experiences, you know them, such as Uber, Amazon, are based on virtualized and data-driven customer relationship. It is not new, but it is accelerating very fast. The experience economy is as profound revolution as was the industrial revolution.
For us, it's beyond digital. You've understood it. It's about virtualization of the world in an holistic way. Now, delivering experiences require sophisticated, sometimes system of systems, at the core of the next generation experiences. More and more frequently, 3DEXPERIENCE is used to model, simulate, and optimize an end-to-end experience with a Cyber Systems approach, as shown in this example by Faurecia. Faurecia was live from the CES, so we'll run the video. I'll comment it because there was a little bit noise behind. What we see here is a collaborative and systemic virtual twin to address the complexity of a car interior engineering, combining the models of many disciplines, mechanical, electronics, software, thermal. Faurecia has applied a unique model-based systems engineering approach provided by the 3DEXPERIENCE platform, resulting in cost-effective engineering, accelerated time to market, and moving from internal silos to a holistic approach.
The live demo that you see here is running on the 3DEXPERIENCE platform on the cloud. Faurecia designed the interior of a new Porsche Cayenne electric vehicle with their own seats, instrument panels, and its human machine interface controlled by software. For this example, the human machine interface is totally replicated between the real and the virtual world to test more alternatives quicker and make sure that the experience will be a desirable one by the end client. You can see all interactions are replicated and directly visible real-time on the virtual twin. You ask me, what is the value? This is very importanfauret for Faurecia for the acceptance of a new HMI by their clients and to create intimacy with them. This was for the first experience.
Now I'd like to share with you a consequence of the previous transformation. The new economy requires new way of working with every stakeholder, and they would like to develop sustainable relationship with their peers. This would not be possible without sustainable collaboration from design to sales, production, engineering, operations, and upcycling. Many ways of working that our clients urgently need. There is an urgent demand together with their ecosystem. It's not a surprise that facing the trade wars, the component shortage and large public funding for local investment, our clients want to develop new production capabilities and new relationship with their value network. Let's look at two real world facts. Mobility in Harmony is a new electric vehicle ecosystem. It gathers 2,000 members in 56 countries, and those EVs are representing that system there.
Also, around hundreds of new battery production gigafactory will open until 2025, representing a new winning market for the near-discrete manufacturing solution as part of industry solution. I'd like to share also another experience. We'll go further now on this topic and run a next video that you will maybe recognize, but on a production system. What if the entire company and its value network using 3DEXPERIENCE could design, manufacture, and deliver consistently considering environmental impact of their joint decision along with performances? This experience here shows you how we can help our client collaborate to achieve excellence and sustainability here for a production system. Step one. Sustainability-driven engineering. By embedding product life cycle assessment in the 3DEXPERIENCE, we can optimize how the machinery is assembled, used, maintained, but also recycled.
Step two: thanks to simulation and model-based engineering, we can optimize the product system design to reduce the overall energy consumption during usage. In this example, we see how replacing a subsystem impacts the overall power demand of the machine. Everything is done virtually in few minutes and without needing expensive validation tests, physical tests, which are, and prototype waste. Step three: design for circularity. We do optimize maintenance operation time to dismantle complex parts of the machine without the need to discard the parts. Step four: supplier optimization. Choose the best supplier for sourcing and optimizing the procurement for dynamic situations. In this case, it is optimized to reduce overall CO2 emissions while maintaining high fulfillment rate. The maintenance fleet, as our clients are switching to new business model of product-as-a-service, reducing CO2 emissions related with maintenance fleet operation is becoming a must.
Here we optimize overall mileage, so the cost and the CO2 emissions are optimized. Last topic, modernization. By comparing environmental performance of different machines revision, it is possible to decide if it's worth upgrading the machine or not. As you see, the power of a platform that grant digital continuity, embedding sustainability, fits in multiple application and in multiple industry, hence the growth. Back to clients. New ways of working, an urgency to transform the value network. Let us see how Renault is taking this seriously. Renault Group, as you see here, launched what is called the Renaulution to transform its strategy from volume to value creation, and will be a major player in energy and mobility services, becoming a tech company working with car, a tech company working with cars. The two main challenges are regulation and compliance.
The automotive world is evolving in an increasingly complex regulatory context. Renault needs to master this complexity in order to meet the challenges. Number two, mastering mixed hardware, software systems. The vehicle are more and more sophisticated, electrified, connected. These new vehicles are made of software and systems. Renault need a platform to model, simulate, and manage in configured way this new complexity. You have understood Cyber Systems is everywhere. Renaulution virtual twin program is based on the 3DEXPERIENCE platform out of the box on the cloud. The aim is to have an enterprise platform that integrates all the different trades in the company. It represent 20,000 people. Renault has already deployed 4,000 on the cloud, 4,000 users, and we can observe the values.
Of course, breaking down the information silos that they had and using the 3D virtual twin enriched with all purchasing, costing, quality data from the consumers, the factories, and after sales, they have been identifying important saving opportunity for vehicle material usage. That was the first part of the value network. Second part, which is in my heart also as a brand leader, innovation is everywhere in the value network. Our mission with our mainstream offer, 3DEXPERIENCE Works, cloud on it, is to lower the barrier of access to technology and science. 3DEXPERIENCE Works is for everybody, from companies that want to be agile and resilient to makers. We have sold since the beginning of the year 18,000 makers.
Well, we have launched last year SOLIDWORKS Cloud, the web mobile offer with high traction since the beginning of the year. 3DEXPERIENCE Works assembles the capability of five domains, design, simulation, manufacturing, marketing, and government. 80% of users. You have here some values that were enjoyed by our clients. Again, the voice of our clients. Smartflyer, creating electrical aircraft. Value: how 3DEXPERIENCE Works unites the design team in Czech Republic and their manufacturers in Switzerland. It's all about collaboration. No IT needed. The third one that we'll comment is RockFarm. It's a robotic system that builds rock walls that mineralizes carbon to fight effects of climate change. They valued the web mobile SOLIDWORKS Cloud in order to collaborate from anywhere and streamline the process development. These examples are numerous.
We have several of them every week. Between hundreds and thousands of our users are connecting every week, new users on 3DEXPERIENCE Works on the cloud. Now, as a consequence, we believe all future experiences developed with 3DEXPERIENCE should have the consumer at the center and promote circularity. This is why we adopted the IFWE Loop representation to show our experiences. With virtual twin experiences, value creation, that means on the left side, is now extending to the usage on the right side of the IFWE Loop. Usage data feeds the value creation process in a circular approach, doubling our potential accessible market. To illustrate this, let me introduce Philippe Loeb, our VP in charge of our two most consumer-oriented industry. Philippe, welcome.
Thank you very much, Philippe. Very quickly because time is up, obviously, already. Not my fault. I think we owe you an update first. In this room, 2018, Capital Market Day, IKEA came, Daniela, and she said, "We have an idea. We want to work together to do a next generation kitchen planner." I'm very delighted to not show you a demo because you can do it by yourself. You go online on IKEA.com, and you can see the planner in action. Every year, every day, it is 20,000 new users, consumers, people, the people we care about who are using the solution. That's really bringing a, I would say, a new level of intimacy between us and the consumers.
It is really super important for us because we believe that understanding where consumers are going is a good way also to drive our business. When they tell us about sustainability, of course, we invest in reformulation. You know, natural ingredients, for example. We have a new solution for this on cloud being tested by very large customers. We also expand the scope, as presented by Florence earlier, of eco design to make sure we can cover all categories of products for our consumers. When they ask us about delightful experiences, consumers, we help companies with system of system develop products, connected experiences, I would say, in the right way, which is absolutely critical, but also with centric, developing the right products, commercially speaking, making sure they add the right things into their catalog.
By the way, speaking of centric, investment for us in 2018, you see the curve, the wall of logos. Of course, the last year is just the start of 2022. It's going to pile up very, very fast. It took them 10 years to convince 100 customers. The last 10 months, they did the same. Very strong acceleration on the centric side. A strong acceleration also, as you see on 3DEXPERIENCE, Shiseido, for example, working on the agile manufacturing, and PepsiCo on sustainable packaging. Why?
Because consumers also are asking for inclusiveness and making sure that basically the products can be delivered to all at the right price at the time of inflation and doing things well and with precision, by the way, is exactly the kind of approach we have, and it is an answer to inflation. That's not necessarily a bad thing for us. Of course, consumers, it's about data. You see on the left, this is the most important part of this chart today. What we do is very specific. We connect to data, so we build a digital cloud, a digital twin, just like the others, but then we go into the virtual world.
We take this data, and we build semantic models, which are very precise, which are industry relevant, and then we put this data with industry relevancy in the context of the virtual twin experience of the product, of the supply chain, of the production system, or why not, in the life of consumers. It is working and making a big difference. We just end with a small anecdote. 10 days ago, so it's very, very recent, a company, Eaton, you see the blue logo here, they do power management. They came to us, and they had a very common issue right now, which is a shortage of a chip, small chip, $0.10 a chip, so very, very cheap chip.
Of course, they called their suppliers, and the suppliers told them, "Yes, we can sell that to you, but the cost is EUR 150 per chip." Huge number, of course, not the right kind of answer they were expecting. They came to us and using these semantic capabilities, this knowledge of the industry context, we could understand that, yes, the plant was about to stop in the U.S., but as a matter of fact, in the same very large company conglomerate, somewhere in the Czech Republic, another company of the Eaton Group was using the same chip under a totally different name, totally different part number. Thanks to the semantic search and the similarity, we could solve the problem for them.
Of course, they just had to ship the chips from Europe to the U.S. in order to deliver to the company and ultimately to consumers.
It's time to conclude, takeaways are here. If you can push the button. Two things to remember, in fact, a huge expansion and allowing, in fact, our clients to become not product manufacturers, but deliver sustainable experiences. You've seen some readiness about that in the current situations. The second one, our cloud platform, the cloud offer is ready and is already bringing value to many of our clients. I do not say that, our clients say that. Thank you.
Thank you, Philippe and Philippe. We now have our next Q&A coming up. For this, I would like to invite Tarek and Anthony up here as well as Florence, please. Let's look into the audience. Many arms up. Maybe we start here in the middle.
Hi, thank you for your very interesting presentations. I'm Kathinka De Kuyper from J.P. Morgan. Tarek, my question is for you. On precision medicine, how far along are you, and what capabilities do you still need to develop? Do you plan to do that organically, or do you plan to acquire? Thank you.
Sure. It's more a question in my mind of how far is the industry. There are certain capabilities that we bring to the table today that really allow our life sciences customers to do what they need to do from a precision medicine perspective. You heard a little bit from Sastry about our ability to help find physicians and patients to do effectively a digital twin of a patient to be in a placebo arm.
Those are aspects of precision medicine that I think are important, but the pieces that are yet to be developed or to be utilized, I should say, by our customers is when you're looking for a drug focused in a precision way on a patient. You are effectively running or you're creating a therapy for one person or for a small subgroup of people. That's happening in CAR-T therapies already, but it's not happening at scale. It's happening for a very small number of patients.
When you start to stress the system, if you look at it at a much larger scale, if you think about every patient having a unique therapy, then the way the life sciences industry currently operates starts to break down because there are a lot of silos, and information is. There is a lot of friction in sharing data between research, development, manufacturing, and then actually how you get the therapy to the patient, and that is where the challenge comes in. It is not so much. I think in many respects, we are ready for that challenge because we bring capabilities in logistics, in manufacturing, we have the modeling already in place, but the industry is not quite there yet. The demand for it at scale is not there yet.
I would say over the next five years, we're going to see much more from a precision medicine perspective, and I think as the industry evolves and matures, we're gonna be ready for that. Do we have to do acquisitions? I don't think we have to do anything significant to necessarily facilitate precision medicine, but we have to keep evolving our solutions and our platform to make sure we're keeping up with our customers' demands.
Okay. I see, Jay, you have one question up here.
Also for Tarek. Could you comment on your international expansion since the acquisition prior to-
The acquisition, about 3/4 of your revenue were in the U.S., and the rest was split among various countries. Since the acquisition, you do seem to have been making certain investments outside the U.S., for example, in the U.K. and Japan, but perhaps talk about your international expansion evolution or plans.
Sure. Just to be clear, we had a very international business to start with. Where we were recognizing revenue, where the licensing was happening, was much more. Yes, it was U.S.-centric, but clinical trials is a global business, and we were running clinical trials in upwards of 140 countries in, I don't even know how many different languages. I don't think our international footprint has changed dramatically. What I would say is, now being part of Dassault Systèmes family, our presence, our strength in Europe, which was probably one of the weaker areas for Medidata, has really evolved. I think really our footprint has improved in Europe. As it relates to Asia, you know, China, for instance, or Japan, we had a strong footprint that's continued to grow.
North America, we're. You know, I would say in every geography, we're growing ahead of the market because we've been taking market share or significant amounts of market share since the acquisition.
Okay. Next question.
Hi, good afternoon. My question is, probably for Philippe on the, on the manufacturing side. If I look at your expectations, for growth in the next few years, I think you've raised, your expectations, to 9%-10% now. I think last time, you were targeting 6%-8%. It's higher. If you can share with us what's underpinning this more positive view, despite what's going on in the world, you seem to be, pushing for more growth. If you can share with us a little bit what's driving that. Thank you.
Thanks, Amico.
Well, the acceleration is based on the two factors that I was mentioning to you. You know, the growth based on the needs for sustainability, eco-bill. Again, we have inquiry for that, you know, every second day. The second point is the value network. We have now, I would say, a substantial distribution machine that can address at the same time, I would say, in one shot, the suppliers, the value network, and as well the OEM. Again, this is based on the current observation we have that have made us make this decision.
Yes. Thank you. Question for Florence on infrastructure and cities. It's a hugely fragmented industry. I mean, you articulated the advantage of bringing a platform approach, but I wondered if you could help us with, of the three sub-segments you identified, which is the one which is really gonna drive the growth for Dassault, and how do you ensure that you don't, you know, run the risk of spreading yourself too thin in a hugely fragmented industry? Thank you.
Thank you. Hello. Thank you, Tarek. Thank you very much for this question. It's a very fragmented industry, but it really depends how you look at it. Because if you look at infrastructure, energy, and materials, at the end of the day, there are not so many energy companies. And if you look at the nuclear projects, the SMR that we are helping, well, there is only a few projects on that kind. IEM, I wouldn't say it's so fragmented. What is super fragmented for sure is the AEC, architecture, engineering, and construction, where you have more than 5 million companies, so you can call it fragmented.
That's where we really think that working on these virtual bricks that I explained, on which we are working with Bouygues Construction, meaning creating bricks that Bouygues Construction is going to use to put together to create any of its buildings, is going to force all the craftsmen that will be working on this brick to adopt the platform. We think that if they adopt the platform for the project with Bouygues, who is doing, as you know, a lot of projects in the world, they're also going to keep the platform for their other projects, and we are going to reach a tipping point. That's really where we think the fragmentation is handled with these virtual bricks and virtual twin of the building approach.
When it comes to cities, public services, and business services, well, we are taking the choice to choose the cities we are working with 'cause we're working with cities who have a vision of transformation or really have use case, so we are more selective.
Do we have questions from the webcast? No? Any further questions here? Yes.
Yeah. Johannes Schaller from Deutsche Bank. Tarek , I think you talked a lot about Patient Cloud, and also Anthony did. That seems to be probably the second largest kind of revenue contributor in your portfolio, but growing quite a bit above the Medidata average. Can you help us kind of size the opportunity there when you go out with those $10 billion or $20 billion addressable market figures? How big do you think Patient Cloud is within that compared to the other bits?
Sure. I would say in the context of clinical trials, it can be pretty significant. You know, the way the market is evolving, there will be an element of decentralization over, call it, the next five to ten years, where pretty much every trial will have some aspect of it, where you're collecting data directly from a patient. You saw one of the statistics we had up there that was, you know, there'll be a digital element in 70% of all clinical trials by 2025. Obviously, it's a prognostication, but we see that kind of momentum. The interesting questions in terms of the TAM becomes, if we're successful in expanding beyond the clinical trial realm, with the patients, then, you know, it's a whole another world for us. I don't wanna speculate on it.
I would just say it's a very large opportunity. In the meantime, we expect that Anthony and his team are gonna really help drive the overall Medidata growth. Yes, it will be above the, you know, the average for the core Medidata solution.
Okay. I think with this, we want to conclude the second section. We have now a 10-minute break. I really would like to make sure that you come back in time because we have our customer coming up in 10 minutes from now, and we really want to make sure that when he is up that we will be all ready. Thank you so much.
Thank you.
Okay, we are now back with our final part of our manufacturing industry's deep dive. I would say. We have one amazing customer testimonial from Rivian, which is coming up next. We're waiting for Barry Caldwell, Director of Geometric Development and Operations from Rivian, to join us via Zoom. Barry, can you hear us?
I can. Can you hear me?
Yes. Wonderful. Thank you, Barry.
Fantastic. Thank you. Thank you. So.
Okay. Let's go.
All right. Thank you very much for the introduction. Good afternoon. Good evening, everyone. I am Barry Caldwell. I'm the Director of Geometric Development and Operations, which is a really fancy way of saying CAD. I have responsibility for operational geometric development within the body and interior organization, and then enterprise responsibility for the way that we do geometric development here at Rivian. My passions are obviously geometry development, mathematics, and high-end visualization. Next slide, please, and we'll jump right into what Rivian is and talk a lot about how we use the platform within Rivian. So just very high level, you can see our three products that we are doing right now. Up in the upper left corner, the right-hand corner, excuse me, is the R1T truck, which we've done many customer deliveries of now.
Below it is the R1S SUV, kind of a view of the interior, absolutely elegant. Over to the left is the Amazon delivery van, and we'll talk a little bit more about this later. Next slide, please. The company was founded by R.J. Scaringe, if you're not familiar with that name. Graduated from MIT with a doctorate in mechanical engineering and said, "I wanna start an automotive company," and has far surpassed just starting an automotive company. You can see our quote there. We're very foundationed on making products that are just inspiring, but yet for the planet, but yet again, drive others to think about transportation in different ways. These products do all of that.
Just real quickly, the R1T, again, if you're not familiar with the vehicle, 0-60 in three seconds and ford 3 ft of water going forward or backwards, can climb a 45-degree incline, going backwards or forwards. All of that while you're doing it with an elegant interior with real wood, Alcantara, suede trim, and vegan leather seats. A truly incredible product. Next slide. Just the company, very high level looking at it. We are an electric vehicle manufacturer. As I had mentioned, R.J. started the company back in 2009. We're sitting, I think, right around 12,000 employees now with about 4,300 at our manufacturing center in Normal, Illinois.
Our main development center is in California on the West Coast, primarily software battery stuff up in the Palo Alto area. Our product development core remainder attendees down in the Irvine area. We're a global company. We have offices in Michigan, Vancouver, Europe, China, pretty much everywhere, especially within the COVID pandemic era. We went public back in November. I think it was about $13.5 billion, roughly speaking. We have the three vehicles that I had spoken to, along with charging stations and lots of other things that we're doing out there in a more of a B2B environment. There you can see some of our initial investors. Next slide, please.
Okay, I've seen some presentations, kind of listening to these things and I'm encouraged to hear those things around sustainability and that there is focus on that 'cause it's an important thing. If you go next slide, please. Certainly with the growth of transportation products along with other industries that require petroleum or oil-based products to do it, there's a lot of pollution going into the air. Not good for the environment. Certainly the world's gonna get bigger and more people and more transportation devices, so it's time to think about that. Granted, the Earth is big, but that fossil fuel does have a limited lifetime. I'm not the smartest one to pick when it'll run dry, but certainly. It will at some point.
If we look at electrification, there's lots of ways of making electricity very efficient. Yeah, as we push ourselves out 10, 20, 100, 500, 1,000 years, this is the way to go. It's an important thing. Lots of stuff to do, but it's an important thing. There's just some data. I think you've probably seen this already, just to give you some of the why of why we're doing this. Next slide, please. Let's jump in and talk a little bit about our product and I will marry into that how we use the platform in our product development. Everything you're gonna see from this point on, please understand we do this on the 3DX platform.
Yeah, we might use some other applications here and there for very specific things, but the product development that we do is on the platform. Next slide, please. So here's just a little elegant view of our product. For us engineering types, this is just a beautiful picture. It's a super simple and it's a super elegant and a super robust design. As you can see there, it handles a 314-mile range battery pack. We've got drive to each tire, each wheel, each end. We've got independent air suspension out of the vehicle, can go up, can go down, depending on the terrain. We've got a super durable structure on this vehicle, which you'll see in the next slide, to protect that battery and just as importantly, protect the occupants of the vehicle.
We could put monster 34-inch tires on that vehicle, and we really manage our materials and use the platform extensively to get that right mix of strength and lightness versus cost on that, on this vehicle. Carrying around a big battery pack, it's heavy. You wanna really be effective with your use of materials, and that's something the platform's allowed us to do. Next slide, please. This is a simulation that you'll see up on the top slide of our vehicle design. It's an offset barrier simulation. A very difficult one to do and achieve and pass. Then you'll see in the lower left is the actual physical test, and on the right is the simulated test. It's a beautiful picture, again, from an engineer's point of view.
It took that load, it dispersed that load, it absorbed that load, and it kept that load from going into the occupant. Getting to this level requires massive amounts of engineering iteration, in the digital space, right? Without a platform like Dassault has, this would be really difficult to do in the time frames that we need to do it. You don't wanna do that physical test but once, maybe twice, just as a pure validation that what you did in the digital space delivered what needs to be delivered. Incredibly difficult and incredibly hard to achieve and requires a really robust digital solution to get to this level. Next slide, please. We have numerous other examples, just no time for that.
Let's talk a little bit about our manufacturing environment and again, how we use the platform. Next slide, please. It's a big plant now. It's pushing 4 million sq ft. It's in Normal, Illinois. The picture on the left is not day one, but we got lights into place for that picture and had done a little bit of cleanup and poured some cement. On the other side, I believe that was taken last year. You can see it's all done. It's painted up. There's units coming off of there. There's a bunch of folks working on it. Truly an amazing thing. Again, we use the platform extensively to plan what that physical space. Just step back and think about planning your living room times 4,400,000. Massive thing.
You can see some of the statistics there of how much steel and concrete and wiring went into that building. Just awesome. Next slide, please. It'll kind of explain a bit how we use the tool within the 3DX platform to figure this out. Here's just a simulation of the Amazon delivery plant, the marriage of the upper body to the underbody for those in the more traditional thinking of vehicles. We had to do all that simulation. We had to do all of that stuff in a hurry, really fast for a product that we had in development so that we could build out that plant and drop this vehicle into that plant and start making these units.
An incredibly difficult task, and without simulation, without the ability to plan all that in a digital space, we would have never gotten to the physical space and then as fast as we were in getting that in and robust and operational. Next slide, please. A little bit on the platform and why we use the platform and what's the value of it in our business. Next slide, please. There's lots and lots of dimensions of key performance indicators that we worry about in our business and our work that we do in the products that we make and how we go about making those products. But really big ones, and I just wanted to allude to two of them, is certainly time to market.
To be really good in this business, to be really cost-effective in this business, you can't take a lot of time developing a product. You've gotta be fast. We've leveraged the platform even for a new young company to do the R1T and the R1S pretty darn fast, and the RPV really darn fast. We look forward to future doing product development even faster. Time is money, in these things, in this space. That's a really important one for us and one that we leverage the platform to. Just as important, and again, I've only alluded to two that I think are really significant is post-release changes. Geometry is truth.
If you can define it in geometry, if you can simulate it in geometry, if you can validate it in geometry, if you can manage it in geometry along with all the other data that we need to manage, you've got a great chance of being really, really good right out of the gate 'cause you're gonna find all the issues. You're gonna know all the things that need to be repaired. You're gonna validate you repaired them when you launch. You don't wanna have changes after you've released. They're really, really expensive, both in terms of time, money and just energy required to deal with those things. This is a big deal. This is a big reason why we use the platform. We have all that data in one repository.
We can do all those studies without having to really spend significant time sloshing data between different systems, right? We do it all on the platform. We manage all the data in the platform. We mature it, we identify the issues. The list goes on forever. Next slide, please. Just to cement that idea, you can see it here. We've got the platform there, and we do our full life cycle work on this thing, all the way from product definition to verification to our process definition. There'll be more pieces, we'll talk about here in a minute, as we look at expanding the platform's usage. Next slide, please. Just a little bit of the growth of the tools, if you will, just a tools view of it.
Just did a couple of data points. Back in 2015, there were about 15 design seats, primarily CATIA, and we had about 1 TB of data, give or take. 2019, we had a kind of inflection, a pretty big inflection. We went to about 800 users of all the tools, 400 or so in design, and we brought in the full suite of tools for it. If we fast-forward to today-ish, got about 1,200, maybe a few more, design seats along with you can see the other statistics on SIMULIA and DELMIA seats, and we're pushing 60, and I think we're kind of growing exponentially, so it's probably 100-120 TB of data as I talk today. We've scaled.
It's a big scale thing, and it's pretty encouraging to see that we can do that, and we're remaining to be very effective in our design work. Next slide, please. Just to conclude, where do we go from here? The platform, I always make just a little aside. Whenever I interview maybe somebody that's gonna come into the company, say, "Hey, tell me on a scale of one to five in CATIA, where do you fall?" And anybody who says they fall over, they rate themselves higher than a four, I usually say, "Thank you very much. You'll see you later." It's such a broad and deep and sophisticated and extensive tool, and the same thing applies for the platform. Lots of opportunities to leverage this platform more versus big data.
In that R1T that I showed you, just within the platform, and I'm not talking about like miscellaneous documents, we had over 30,000 instance objects on that vehicle program. It's a massive amount of data. When we go and expand that vehicle by vehicle, along with other things we're bringing in, this is what we're gonna leverage the platform do. The reading across the top row, supplier integration. The world is becoming more ubiquitous. We work with companies all over the world, and it's a big project we have underway right now to integrate them into the platform so we don't push data around. Pushing data around always is an opportunity for mistakes. We have to manage that with responsibility.
We have to manage that with security, but we have to do it, so that's a big project on our plate. Then reading down in the lower left-hand corner, enterprise collaboration. We have lots and lots of applications at Rivian. I'm sure many big companies do that. The strategy right now is to consolidate and understand where we should optimize and do those applications. So just a very simple one, for example, issue management, right? Should we be doing issue management in the platform, or should we be doing issue management in some other application? The platform has a lot of opportunities, again, given the integration to the tools that we use to do things like this more effectively. So that's a big project on our plate. Then lastly, information intelligence.
Now that you have all this data, you can start mining it and understanding what to do with it. Hey, how did we do on weight? Hey, how did we do on cost? Hey, how robust are these suppliers? Hey, what kind of reusability do we do, right? What sort of things can we understand better about the data that we have? Then also, how do we interface with the various external customers? Amazon's a huge customer of us. They're a very sophisticated customer, and there's a lot of information that we can exchange and learn from what we would call a B2B model. Primarily a business customer. Then the same for our customers, our buying public customers.
There's lots and lots of data that's being generated and out there that would be very useful for us going forward with the products we develop. These are the kinds of things that we're looking at to do with the platform going forward. I will conclude there 'cause I think we're at about time or a little over, and I'll open it up for questions.
Thank you, Barry. This is an amazing success story. Thank you for sharing this with us, and I'm sure there will be a few questions in the room, and let's get going. Who has a question? I see Jay, you have another question, please. Then we have maybe time for one more. I saw you.
Thank you, Rouven. Jay Vleeschhouwer . Barry, you gave a very similar presentation two months ago at the COExperience conference in New Orleans. There are two things from that and today's presentation perhaps you could clarify. Number one, you referred to simulation as an essential process, but it wasn't clear then or today if SIMULIA was your sole simulation tool or if you also employ other tools for simulation process. Then secondly, two months ago, you said you had a, quote, "massive effort" around DELMIA. Would you expect DELMIA to be the leading edge of your expansion of the use of the platform, or would you expect to expand with other DS tools as well?
Okay. For the first question, we're engineers at heart, so engineers love to have great big toolboxes, right? It's not one hammer for all applications, right? While SIMULIA is gonna be a very important tool to us and something that we're spending a lot of time with, we're certainly gonna keep other tools in our toolbox where we feel are appropriate and integrate them into our solution. Yes, it's a big part of it, but certainly there's other great tools out there that we'll leverage on. Relative to the DELMIA question, I think it's a twofold thing. Certainly, we have lots and lots of work going on in that space. If you look at our MBOM structures, they're just massive, which is really cool.
The platform has a lot of other things to offer, and these become enterprise architecture type decisions. It's a very serious endeavor we're going through right now to understand our application workspace or footprint, now that we've grown up as a company, and identify what applications we think would be best suited to live on the platform.
Okay. I saw another question here. Still here.
Thank you. It's Charles Brennan here from Jefferies. Just two questions from me. Firstly, you spoke about the breadth of the solutions from Dassault. Is it easy for you to understand the range of functionality that Dassault can offer, and is it easy for you to understand the pricing of that functionality or is there just too much complexity with all of the different SKUs within Dassault for you to easily consume? Secondly, in terms of the consumption model, can you just talk about whether you opted for an on-premise deployment or a cloud deployment, and what your thought process was behind that? Thank you.
Sure. As far as the offering, like I said, it's a very deep well, and that's a great thing. Actually part of the Dassault team is here in SoCal this week, going through kind of this exercise with us, to understand what these things are. I don't think it's terribly difficult to go through all of that. The Dassault team does a very good job explaining what the product offerings are and how they are configured. I think once you get into that a little bit, from a technical standpoint, it becomes fairly straightforward. From a pricing standpoint, I'll have to admit, I will have to defer that to one of my colleagues, as I'm the technical guy, not the money guy.
I'm sorry, the second part of the question was on the on-prem or cloud. We have a really good relationship with Amazon. We have a really good relationship with Amazon AWS services, so that's our cloud, if you will. We've got the platform running on AWS Cloud. We are looking at the Dassault, and forgive me for my technical or lack of technical jargon here. We are looking at the Dassault Cloud for a certain set of applications that we feel might be very relevant to have that capability. Hope that answered your question.
Yeah. Okay. I think with this we can conclude. Thank you so much, Barry, for the great insights. Thank you for your partnership and trust.
All right. Thank you. Have a wonderful afternoon.
Thank you. Okay, now with this, it's my pleasure to welcome Toshiko Mori on stage, our lead director for sustainability, to give us insight into our ESG commitment. Thank you.
Thank you very much, Rouven Bergmann.
Thank you.
Thank you. Thank you everybody for attending. Welcome, and it was very nice to meet many of you last night and also during our recess. I'm an independent director of a board, and this is my last year. Within nearly 12 years of service, I have seen so many changes. I have to tell you, never a dull moment of being a board member because Pascal and then Bernard, they always come up with new ideas and new way of approaches, and innovation is in DNA. Then I also have to say I have a pleasure of serving in scientific committee for all these years, which means out-of-box thinking and, oh my God, what are you thinking about? I had thought I signed up for engineering company, but you're thinking of life sciences now.
These are critical moments I experienced over the years, and it's been an inspiring experience. I'm an architect. I have office in New York City. Also, I have been a professor at Harvard University Graduate School of Design for the last 27 years, and then a chair of a Department of Architecture, so I'm familiar with the design. In my school, we teach students CATIA, and then many of the architects, as you know, we design with CATIA. As we pointed out before, the industry is fragmented, so we have to do patchwork quilts of software in order for it to be built. I can explain a very interesting way of handling that crisis. It's an industry crisis, it's not Dassault crisis.
My career has been sustainability driven, and one of the examples I can present today is a cultural center in Senegal in a very remote community, very poor, very underserved communities. It's very famous for. It's been famous for instability in terms of public health, high maternal death and infant death. It's built next to a clinic, which over the 20 years, they have actually made that zero. Within what they do is the real essence of sustainable community, which means one builds sustainable buildings and then but enhances the public health. The multiple drivers that requires in order to make this otherwise unstable community stable.
This is the example of a building which was built with local materials, a local craftsman, but when I was building it, I realized that they are facing a water issue. As opposed to Ethiopia or Bermuda, they have a practice of collecting rainwater from a roof. They did not have that. They had abundant aquifer, but it's been drying up very rapidly because of climate change. If one person is digging a well, the other person's well is drying up. The idea is, with the doctors, we collected data of how much water goats and cows and horses are drinking, and we actually have very interesting data to figure out how much water they need to go through the entire year. We figured out that if they were able to collect rainwater, they can completely survive it through the dry season.
Our center really supplies 30% of village need overall, which is a critical number because girls stop going to school after elementary school to help family to go collect water in farther spaces. In a sense, it is a social problem. After a couple years when we built it, women in the community formed an economic consortium to start raising their own vegetables, high-priced vegetables. This is actually mobility technology to figure out the prices, what's high price. Not the peanuts, not the bananas, no, eggplants and peppers. With this community, women were able to make money, also contributes to the economy. Nutrition and public health stabilize the community and also gender equality. They were earning as much as men.
It really made the community more thriving in terms of this particular thing. What I'm trying to say is that root cause of elements of sustainability has ripple effects. It has multiple benefits to the community that we can't just ignore just looking at the numbers or something. The climate crisis ahead, as you all know, really impacts everyone. That was a small example, but it just is so multiplied by so many layers that, as you know, a rise of temperature 1.5 degrees centigrade will have irreversible effect. If we kept going, it's predicted to take place in 2040. We only have 18 years to help ourselves from extinction. It's really in a very crisis mode, and development doesn't help. Feasible solutions are there, but it needs to be effectively deployed.
There is a still window of opportunity, but it's closing very rapidly. In a way, I think I joined the board is coming from a construction sector, which is a big culprit. We account for nearly 40% of energy-related carbon dioxide. Electricity use in itself accounts for 30%. Out of that majority is lighting. If you really figured it out, what is causing building sector, but we can easily track it back. We can improve operations, maintenance of buildings is a big factor. Energy is not a static element. It keeps getting used. Implementing comprehensive policy and to use effective and carbon, low-carbon technology and better design solution is what we need to go.
As I mentioned before, one of our advantage of Dassault Systèmes solutions or platform is that it helps to unite fragmented industry, as it's mentioned in questions before. Because of, especially United States where I practice, rising insurance rate, high rate of litigation and the cost, everybody is suffering. Supply chain crisis made everybody realize we have to integrate or else we can't survive. It's not as if our software is there, but industry is in a state of catching up with integrated design, delivery process. We really have to work on it because 100 active fuel, fossil fuel producers account for 71% of global industrial GHG emissions. In a way, it's easy to say, "Let's change it to renewable alternatives," as Barry had mentioned before. That's actually really fast action, process we have to deal with.
The rate of acceleration was so great that all of our CO2 emissions since 1751, more than half of it was done in 30 years. We have done this incredible practice of just building, making things, throwing things out without caring about its impact. Again, if we are the ones who are responsible, we know what we did wrong, so we can actually help save that. As Florence mentioned before, it really takes EUR 94 trillion by 2040 to keep pace, profound economic and demographic changes. This is another issue of how much it's going to take. Capital spending on physical assets for energy and land use system will need to rise by EUR 3.5 trillion. Before it was predicted to be close to EUR 6 trillion. Now EUR 9.2 trillion.
That's a lot of money, and it's a real crisis. As I see it, crisis and opportunities, that is two sides of the same coin. For Dassault Systèmes, this is an amazing opportunity. This is a company that can be agile and fast foot it and move right in to try to solve these other issues. Now working at Talk, I always relate to, this is my organic garden in Maine. It took me decades to have a terroir for many different species to grow. Dassault Systèmes platform is a ready-made terroir. It's all delivered to you. Then with many different, plants or the brands that's growing on, and on top of it can harvest, deliver you food. As Philippe Laufer said that it has continuous possibility for innovations, which means continuously harvesting new ideas, new businesses.
You may not have to change your business very much, but there comes all these benefit that comes within this system. With this system, as you know, 17 goals of United Nations Sustainable Development Goals, there are 17, and it's not as if we are attacking one by one. As I mentioned before in the first example, this issue of poverty, the nutrition, the gender equality, all of them are quite related together. Why can't we actually integrate when we're actually doing a sustainable business development, really look at what are the benefits, not just look at the bottom line business opportunities. Because future of a company, it's going to be your legacy. That's how people will look at it. I mean, it's how much money you make, yes. What's the legacy? What's the true legacy you believe in?
That's where ESG, environmental, societal, governance, these metrics are very, very important. I see as a board representative, everybody's working really hard. This is not easy. If this were easy, the data collection and then managing them to make sure to maintain and predict evolution, to make sure it's going the right direction, if it's easy, it's been done. We are not here. We are here, and I see really hard work of everybody daily, weekly, monthly, quarterly. I meet with the committee, with the whole Florence and Thibault report to me, but at the same time, when they are actually doing the work, I see high morale of employees because they like to see their company contribute, to improve the world.
It's really a wonderful idea for them to be doing work in a company that is doing something to help the entire rest of the Earth, rest of our planet. I think this idea of a mission of providing business people with 3DEXPERIENCE universe, imagine sustainable innovation, capable of harmonizing product, nature, and life. I would say, I'm very proud to say as a board member that we are walking the walk and not just talking about this whole situation. The company's sustainable commitment, as I mentioned and mentioned by many people, Bernard and Florence, is carbon neutral by 2040, 2/3 of new licenses on sustainable solutions by 2025, and engage 5,000 stakeholders on sustainability by 2025. Board, we think they are too conservative.
I think they should engage 5 million stakeholders in sustainability because the platform is capable. I think why not go more ambitious, especially in this particular agenda on sustainability. I mentioned before, it has the brands, which is science-based, knowledge and industries with industry know-how in many diverse geo channel territories. In the diagram you see it, but I see it as a really fantastic, beautiful ecosystem which I relate to a large virgin forest in Japan, ancient Japan, where there's understories, overstories, many species of tree grow together because their root system communicate with each other. If I can make a metaphor, it is just like the forest. That it's not only their own species, they are all helping young species to grow. That's how forest managed it thrives for tens of thousands of years.
That's how we need to manage, and that's how I relate the ecosystem with Dassault Systèmes with this ancient forest. As Bernard mentioned before, the virtual worlds extend and improve the real life. It comes back to us. It's not like a metaverse fantasy. I have nothing against it. Students love it. But it's what I think the Dassault Systèmes platform does is it really informs and improves. It's probably one of a very few platforms available which can fight against the speed in which it needs to act. As you can see, I said before, we got 18 years and how many platforms or solutions we have to fight against this time.
As Barry mentioned before, the simulation technology and virtual twin potential mentioned by Florence, that's actually an incredible asset of this particular solution, and it has economic value and 7.5 gigaton carbon dioxide equivalent with, that's actually for 2030, but actually equivalent of a global carbon emission over all the transportation. It's really very big numbers. These are uses which have been discussed by previous speakers before. Lastly, you've seen this diagram before, but from architect's point of view, it's a very interesting diagram. It's just not a linear loop, as Pascal mentioned. It's going to circular economy, and on top of it has multiple strands. It's a woven system.
It's not a static system, it's dynamic system, which means if there's a problem, it can start to identify the problem, repair itself, and then it will actually produce other innovations through everything through the loop. I think with this, I'd just like to end my talk about my belief in Dassault Systèmes and my observations, and I've been very, very happy to be part of a member of the board. Thank you so much.
Thank you, Toshiko, for this very insightful and very well-prepared presentation.
Thank you.
Thank you so much. Now Bernard and I think Florence, Pascal?
Thank you.
We have five minutes for questions. Let's get started. I can't see anything. Do we have questions? Okay, cool.
Hi, Toby Ogg from Credit Suisse. One for Florence, just on the infrastructure and city side on the portfolio. If you think about the existing solutions that you have available for these different groups that you've mapped out, are there any key areas of software functionality you think it could make sense to acquire? What are the kind of characteristics of you know any potential acquisition that you're sort of keeping in mind? Thank you.
Thank you very much for this question. I thought it was a Q&A on sustainability, but nevertheless, indeed, we are working on the six domains that I shown you earlier on. These are really our six domain where we invest a lot in research and development and are looking for partnership. As I said, we also have really an ecosystem strategy. Like, we're trying to bring the ecosystem with us. Rather than M&A, we are looking a lot at partnership and ecosystem building in order to transform the sector.
Okay.
Hi, thank you for your presentation. I would like to ask a question about sustainability. I know that you have a solution that provide the carbon consumption of a product along the life cycle, but do you have a solution in order to calculate the disclosure of emissions for companies, for example?
Thank you very much for the question. In fact, scope three is super interesting because what we are doing when we do the virtual twin of the supply chain is optimizing the supply chain. We are able, depending on the information our customer have on their supply chain, to optimize their CO2 consumption. We did that for a company called Amy's Kitchen. Amy's Kitchen is a company who is basically doing, well, food manufacturing in the United States. They really wanted to be local and reduce by 30% their CO2 emission. They managed to do that via our Quintiq solution. We can do that, but we also are depending on a lot on the information that is available within our customers.
Maybe one question on sustainability as well. We've seen a lot of companies struggling to produce anything meaningful around the taxonomy in Europe. Is there any way for you to help your clients in that journey and a way to monetize it?
Thank you very much for this question as well. With so many companies struggling with EU taxonomy, Dassault Systèmes is not struggling. We are working on our own EU taxonomy, and when Toshiko was mentioning that Bernard and Pascal have committed that by 2025, 2/3 of our revenues will come from sustainable solutions. That will be solutions that have been designated, validated green by the EU taxonomy. We are doing our own homework on that. This is our way as well to validate our sustainable solutions. When it comes to our clients, what we're discussing with them is not so much the green taxonomy, but really how to really help them to be sustainable.
Our clients have taken a lot of commitment regarding SBTi, Science Based Targets initiative, which means getting to a level of emission which is consistent with the Paris Agreement. In order to get to this level of emission consistent with the Paris Agreement, you need to do a lot of model and simulation. What are the first action you need to do? How do you need to redesign your product, or you need to improve your supply chain, and they can do that with the platform. We are really helping them on the SBTi approach.
Florence is very modest, but she's very active to help the organization in Europe to really establish comprehensive parameters. You speak about SBTi, but really, because it's part of the taxonomy conversation on the green passport, it's how is it structured so it can be used by industries. Florence is directly involved with those organizations to help them understand how it could be instrumented. Because if we get the standard on, you know, Europe is very active, more active than most of the other countries in the world, to really define this, not only the taxonomy but the approach. How we measure, how we plan, how we improve. So we are directly involved on those topics.
What we hope to do from there is to basically have the platform ready for the implementation by our customers.
Thanks. Just one more. Clearly, obviously many organizations are committing to their sustainability targets, which is obviously committing themselves to specific investment roadmaps. I guess, just given the sort of more unstable macro, you know, environment, how do you see the impact of these sustainability roadmaps, which I guess are more fixed in nature, on the sort of overall cyclicality of your business?
Frankly, it's difficult to predict at this point in time. We do not have enough. The impact will, you know. Clearly it's a topic which is on everyone's agenda, as you mentioned in your question. It creates attraction. I have a concrete example. Many customers are trying to just track some data in their companies. Just understand. You have seen that many companies are using basic ERP system to track energy that comes in, materials that come in, just looking from purchasing, from the flow of purchasing. But we all know that this is a very small part of the topic, because it will have to be by design. Materials are going to be substitute. We need substitution materials. We need new process. They need new processes.
That dynamic is very diversified depending on the industry. It's clear that there are certain industries where the cycle time to just certify materials usage for safety, for example, like aircraft, will take much more time. There are also areas where we can really go much faster on areas which are having big impact. How all those combined effects are could create, first of all, levers for accelerators in growth and also stability within situation where there is gigantic volatility from the economy standpoint, very difficult to conclude at this point in time, but everyone is confronted with it. You all know also that the portfolio of most of our customers must and will evolve faster than ever in the next 10 years. This is where we are.
The by design, more sustainable environment.
Okay, one last question.
I'm very pleased that you have been SBTi certified. According to my understanding that the certification does not include the Scope 3 of the use of your products to your customers. Can you confirm this element, and do you think at what timeframe as Dassault Systèmes wish to also help your customers? As you just mentioned, these are used. Are you going to reduce the consumption of electricity of your own platform at the customer site, please? Thank you.
That's a very good question, because actually we are working on that. We are working on a project together with Michelin exactly on that, identifying how much energy is used by the platform and what is the platform bringing. We will have a real audited calculation of what we are bringing, like what we're reducing at Michelin and what is the additional cost to Michelin. The study should be released hopefully by September. We will have the numbers, and we have decided with Michelin that we will communicate on it. Of course, you will see that the effect of the platform are massive for Michelin.
What we are doing with Michelin, we are now replicating it with some other customers in the meantime, because this is really a question of our customers, and they really need as well to prove what they are doing to reduce their own emissions. Basically, well, they see that the platform has a massive lever.
Rouven, if you allow me. Thank you. If you allow me to add one comment, first of all, we feel very lucky at Dassault Systèmes to have a great board member as Toshiko Mori with us for 12 years now. You can imagine with her passion that it has been an incredible stimulus for us to really invent, as she said, with humor, at every board and come with new ideas and share these new ideas in the scientific committee at first.
Yes.
As the lead director for sustainability. Thank you very much for all this incredible attention that stimulates our imagination and also your very high empathy for what we do. Really, we think that this is also the philosophy of Dassault Systèmes. Thank you very much.
Oh, thank you.
We appreciate Dassault Systèmes is what it is. Thanks also to your help.
Thank you.
Okay. Thank you. I was just connecting, and turns out we have no break now. We just continue because we want to make sure we will be ready for Q&A and wrap up by about 5:30 P.M. I think that's our goal. Now it's my turn to conclude. Also it's my pleasure to now turn your attention to the financial strategy. You heard throughout the day how much proof points we have gathered, the conviction we have, the position of strength we are in, and that our strategy essentially is working. I think very importantly, we have a plan to execute. This gets me now to the start of my presentation.
Yes, I have four key messages that I want to start off with, and it's kind of the structure of the talk that I will share with you. The number one message is we have consistent execution. We have a track record of delivering consistent financial results. We've been doing this for a long time. Second message is why we have the track record. We also have room to grow. We are always building and investing for the future. Third message is, as you heard throughout the day, we have clearly defined growth levers and a strategy that we have operationalized with the cloud strategy that I will be giving you some more details on how we operationalize it.
Our platform strategy, the diversification that we have achieved as a company, as well as the strong domain knowledge that you have seen throughout the day in the presentation from all the sector leads. This is position us really well. The fourth point, we talk about the multiplier effect that Pascal introduced this concept. It's really for us, and when I look at this through the eyes of the CFOs and the financial perspective, it's really bringing together those strong assets that we have put together with our financial strengths to really create an ability to advance our strategic priorities that we have as a company, now midterm as well as with a long-term perspective. Just a very brief look, and I know this is looking backwards.
You're more interested in looking forward, but give me some time to get you to the forward-looking piece by giving you also the reasons to believe that what we have done in the past is really giving us the confidence as we're looking into the future. You heard this morning, you saw this morning in the announcement we made, as part of our press release, that we are confirming our objective, that we are on track to achieve EUR 1.20 by 2024 in EPS. That's the first message. Why are we confident and why are we able to confirm this? It's because of this consistent execution.
We see a solid revenue growth for a decade with 10% on average, and we are doing this at while at the same time we are working very hard and focused to accelerate our conversion to cash. I know this is very important to us as we are building our position of strength, and you see a number of proof points later on why this metric matters a lot to us. You know, EUR 1.6 billion of cash generation in 2021 converted from EBITDA. Now, you know, we have the proof points, but we also have the room to grow, as I said before, right? Pascal talked about this, our TAM. We have a $45 billion TAM that we operate in, and this compares to today's revenue of just about EUR 6 billion.
You know, we can say we can grow eight times in this TAM, while at the same point in time, the real potential market opportunity is EUR 100 billion, and we are only serving half of that. We could capture an additional EUR 50 billion as we are innovating and driving innovations to our customers and opening up new possibilities to address this potential. Clearly, we are not opportunity constrained. Now with this, let me zoom into your questions around business model and cloud adoption. First message is we are accelerating our recurring revenue growth. You see this here on this chart, that since 2018, we actually doubled the rate of recurring revenue now to 16% in the last four years. Why is that?
Because we have a very strong and resilient business model, which provides approximately 80% of software revenue is recurring. That is, of course, in parts due to the acquisition of Medidata, but not only. Of course, as you see here on this slide, the cloud is a big catalyst of this trend as well. Just to make the point, it was coming up earlier before during Q&A, we have a very sizable and significant cloud business already today with EUR 860 million that we recognized in 2021. You know, we gave you the target of EUR 2 billion by 2025. On the next slide, I will give you some insight in how we are going to do that.
This is a way to structure, right, and to look at the different growth dynamics in our cloud business, and how we are looking at the acceleration that we are targeting for cloud revenue growth. We have multiple levels of growth, as you see here. First, you know and are aware we have made our commitment of 13%-15% revenue growth in the life sciences for the life sciences sector. You saw this a couple of times on the slide today. That's all cloud revenue. Of course, there are a number of different drivers in this 13%-15%, and I start with the first one, which is the largest one, the Medidata Rave data management platform, which is today the industry leader by far in this segment.
I remember years ago when, you know, at Medidata, most of the analysts were questioning us how durable is the growth for Medidata Rave. Is it really sustainable? How long can it go? We are very convinced that we can continue to grow this business by mid- to high-single-digit, right? For the next three to five until 2025 at least. On top of that, we see very strong demand, as you heard from Anthony and from Tarek about Patient Cloud. You know, as we see the decentralization of the clinical trial of the, you know, overall healthcare world, right? The clinical trials, they have to evolve as well to become more decentralized and provide more access for patients to the network.
As well as in a Medidata AI with a great proof point, I think, that Saswi shared on our strategy on how broad we are looking for ways to monetize our data assets in a very unique way. These are very strong growth drivers that give us the reasons to believe and the confidence that the 13%-15% growth for that portfolio is very doable. On top of this, we see the brands like ENOVIA and DELMIA are becoming an important growth driver in this sector because our clients they need to optimize end to end. When drugs are approved, the next question is how do you scale manufacturing? How do you scale commercialization? And how do you optimize time to revenue?
Therefore, you need to really manage your entire value chain. This is where, ENOVIA and DELMIA plays a very critical role, and we see this now more and more emerging. Tarek mentioned the unified go-to-market that we've created. This is really tailored to bring these solutions to market and accelerate growth. Now, this is the life sciences sector, right? On top of this, we anticipate an acceleration of 3DEXPERIENCE Works. HomeByMe, you saw the great presentation by Philippe Loeb earlier today about what we are doing with IKEA and how we are able to, you know, find new audiences that are cloud-based. As well as centric PLM progressively to contribute to the cloud growth in the mainstream market. This very key strategic objective for us and essential, really essential to achieve our EUR 2 billion target.
Of course, on top of that, the 3DEXPERIENCE platform, which you saw today, is the platform for innovation, engineering, as well as for business. Many of our customers who are, you know, Dassault Systèmes customers for a long time and have a large installed base, which you can call legacy, but, you know, they are very valuable assets that they have built on-premise. They need to find a way to transition to the cloud, and that's where they need to adopt the 3DEXPERIENCE platform. That's a key driver of growth. You saw a number of examples today. As well, we see a lot of growth contribution from the newcomers or the shakers that are starting in the cloud, essentially from scratch. They can scale very fast, as you saw in the Rivian example.
Now to put this all together, yeah, overall, we are confident to achieve our EUR 2 billion revenue target by 2025, which implies a growth rate on average of 23%-24%. Now let me switch from here to the platform and the platform adoption. Why do I do this here? Because the platform is really the underpinning of our growth strategy, and it's really essential to understand that for our cloud growth. You know, you saw this today, our platform is user and data centric. That's why we address different audiences. Right? With 3DEXPERIENCE, it's the platform for enterprises, for professional users, but also more and more for B2B4C as you connect to the consumers and customers of our customers. That's the core and the core piece for us to expand and drive value and change.
Of course, we have the Medidata platform for the patient and the practitioner, and we have the HomeByMe platform for the consumers. If you look holistically, and this platform approach, these three platforms today generate 45% of our software revenue already today. We have good reasons to believe that, now with this strategy, we are on track to achieve the 2/3 by 2025. You have the great examples here to the right. We walk the talk in implementing the platform and driving value with our customers. I guess most of you are familiar with the Toyota example, but this is really around expanding from the traditional design space into collaboration and integrating the supply chain, which is a massive potential for us and for Toyota.
Moderna is probably one of the greatest examples to see how we can scale a company that used to be this very small biotech firm today into the leader in mRNA technology and the ability for them to reach to develop new cures for patients that haven't been solved today. I think Moderna will make a big difference in that, and we are part of this. The IKEA example you heard today. For the cloud, I talked about this. We have three things that I want to really emphasize here. The first one is the cloud is about new usages, and the cloud is about business model expansion for us as a company as well as for our customers.
We have a clear set of target that we have developed that I also spoke about, which is the EUR 2 billion. We have the reasons to believe and the value proposition in the cloud. I think that's very well articulated. If you go through those one, two, three, four, five customer examples. I want to highlight this. You saw it earlier today. For Rivian, it's really about providing scale for a company where you heard it's all about the time to market and the speed, right? We have to look at how they can scale the operation. That's where 3DEXPERIENCE in the cloud makes a difference. For Renault, it's for them a way to break the silos, reinvent the companies, and connect all the stakeholders. That's where 3DEXPERIENCE makes all the difference. For CLAAS, it's about efficiency, productivity, cost management.
It's where the 3DEXPERIENCE in the cloud makes a difference. For Bloom, it's a partnership. But for us, it's a way to bring social data, behavioral data, in a very targeted way to our clients and to the use cases that makes a difference and really enriches the power of 3DEXPERIENCE in the cloud. Think about 3DEXPERIENCE and Bloom, right? The data is cloud-based, it's on devices anywhere, so you have to be by definition in the cloud if you want to experience and bring social data into your decision-making process. We talked about ENOVIA earlier today, but I want to highlight with ENOVIA the point around compliance, right?
They are in a business that is highly regulated, and one of the key things that you have to do in a business that's highly regulated, you have to have end-to-end traceability and auditability. That's what the 3DEXPERIENCE platform brings to Noria and helps them to really scale their business and be successful. This is with this. I actually want to switch to another important point, which is our decade of delivering profitable growth. The reason why I do this now, you know, after cloud and all the innovation that we are driving is really to make the point that we are reinventing and we are investing into the future. We are building new business model in terms of our cloud approach and all the investments we make.
At the same point in time, we are able to show that we can improve our margin over the last 10 years very consistently. We are not compromising our profitability as we are expanding in the cloud. We have, as I said before, we already have a very sizable business that is cloud-based, that is reflected and included in these numbers. We have been able to increase our profit margins by 40 basis points while we are doing this shift in a very disciplined way. On top of this, of course, you know us, we are acquisitive. We look at a way to drive growth organic as well as inorganic and through partnerships. When we do that, we are always confronted with the situation that we have to offset dilution from acquisitions.
That is something, and I want to show this here just as a framework on the other side of this slide, is every year we generate a certain percent of operating leverage that we are able to reinvest into R&D as well as into sales and marketing to really expand and get closer to our customers and expand our reach, as well as to really progressively offset dilution from acquisitions over time, right? It's not our goal to do this within one year. We have a plan in which we do that, but we have the means and the tools, you know, depending on where we are in this process, organic versus inorganic, to really take these levers up or down the way it makes sense. That's really our model.
All the investments, all innovation, business model innovation, but at the same point in time, very disciplined on the margin and the operating framework. This leads me to our investment strategy in talent, domain, and global reach. Because that's at the heart of our strategy to ensure to deliver long-term growth we talked about earlier today. We are a company that operates at the intersection of technology and science. For that reason, we are focused on education and learning. We're focused on partnerships with university and finding the best talent in the market everywhere in the world. You see that on the right side of this slide, our presence in terms of where we have labs in the world.
That's really one of our strength that we can tap into all these talent markets, and build and further, grow Dassault Systèmes in all those markets with all the domains and industries that we serve. Maybe the last point here is you see the pie charts. 29% of our population, of our people are in the Americas, 39% in Europe, and 32% in Asia. I think that's a really strong statement in terms of the diversification we have and how we are able to capture the world. Also the proximity to customers is really critical in this. Investing to fulfill our purpose. What's behind this? We have a growth-oriented capital allocation strategy, and that's really based on three pillars. Number one, we have a very strong liquidity position.
That's a core foundation. As I said before, cash generation is something we are very focused on, and that's also reflected in the recent upgrade we received from S&P, where we are now listed as a single A-rated company, which is a proof point of this, that this strategy is acknowledged and that we have been able to do this while we have been in a pandemic as well, right? We have delivered while we are really working against all these forces. Number three is we have a consistent framework to pay back to our shareholders via dividends as well as stock repurchases. Secondly, while we are focused in making strategic investments into the future, organic, inorganically, and partnerships, as I said before.
The bottom line really is we have the financial flexibility to advance our strategic priorities through organic and inorganic acquisitions. That's really what's behind the multiplier that we talked before. You really bring the position of strength that we have created for us, right? With all the investments we have made for many, many years, plus our strong financial position helps us really to advance and accelerate our ambition. I want to close in the way I have started, the key messages are also the key takeaways. We have the track record. We've built our ability to continue to grow and expand our markets. We have the levers clearly defined and operationalized. The multiplier effect, that's our opportunity to accelerate our growth.
We are very confident in our long-term opportunity. I think we have a very clear strategy. You also saw we have the subscription model already in place that will enable us to scale also our cloud business. With that, I would like to ask Bernard and Pascal to join me on stage and take your questions for the next 15 minutes. Thank you. I'm sure there are questions. Yes.
Yes. Good afternoon. It's Laurent Daure from Kepler Cheuvreux. I just have two questions. You explained well the growth you're gonna have in cloud, but could you elaborate a little bit further on the profitability of your cloud business? I'm thinking about gross margin, and especially, the difference you may have between the private and the public cloud offering and how it will trend going forward given that the mix of your cloud will also shift. My second question is, on your M&A, but more on the discussion you may have on valuation given that the stock market is collapsing right now. Do you start to see, the seller being a little less aggressive in what they want in prices? Or do you think it's gonna take a bit more time given that PEs still have a lot of money to invest?
Thank you.
Yes, sure. Thank you. Thanks for the question and the great follow-up. On the margin, for the gross margin, yes, there are different level of maturity that are always reflected in the gross margin, but you can think about it categorically. It's between 85%-90% gross margin. So we are very profitable in the cloud. We also offer various ways. We have the public cloud, but we also have the private cloud offering, as you said. You know, while the private cloud is more, I would say, tailored for the specific needs of an industry or a client, but it also creates an incremental value, right?
The way we position that is that we are actually able to monetize that incremental value. When we are creating private environments and dedicated environments, it's really important for us to make sure that this value is reflected in our pricing, and it's not comparable to a public cloud offering. That's why we're able to protect our margins.
Yeah, maybe I can add a few things about this. First of all, what do we define as cloud? Which is also a good way to start. We put in the cloud category when we are managing the cloud operations on behalf of our customers, which basically means when we are selling a license, and this license is used on the cloud by our customers, and they are operating the cloud with their IT department, we are not counting them at the cloud. Why so? Because we charge for the operations guys. It's not free. Unlike many of our competitors, they have to pay the cloud infrastructure to AWS, Azure or Google, whoever, and at the same time, they are not charging additional services or operation on top of. That's not what we do.
This is the reason why, again, if you look at the profitability between the cloud solutions and the on-prem, it's equivalent for us.
The M&A question, maybe very brief. You know, I think we'll see, I would say, right? We're going right now through a time where the multiples are significantly coming down. So in the public market it's obvious, yeah. Private markets, it's all about expectations. We are always active in terms of screening and exploring M&A opportunities, and it really comes down to multiple factors. Valuation, of course, is one, and it was difficult in the last two years, because prices were extremely high and expectations were very high. I think now we're coming to more towards a moment of clarity and real valuation that gives us much more opportunities.
Yeah. Yeah, that's a factor. There is another factor which is quite important that you need to understand. The profiling of the company has changed a lot in the last three years. In a big way. That was our job to do that, make sure it would be understood, and I think you understood it, you know, with the positioning. There are massive consequences. It's not only in positioning. We have the proof points of our position with those customers. There is a second effect. The current taxonomy of the industry is evolving massively. All supply chain in the world is not going to be the same. The way the value are going to be split between players is changing at a speed never seen before.
The consequence for the strategy that we have expressed, I think with, hopefully, clarity, the targets have changed a lot. On the scoping of what we were doing three years ago, on the scoping we are doing today are very, very different. This does not help you because you want to know a secret that we don't plan to deliver today. At least, you will see a policy going on which is extremely consistent with what we have done around the last, 30 years, 20 years, 40 years, which is it is aligned with the strategy. However, it's not an expansion necessary of the old way of thinking. It's going to be adapted to the way the sector of the economies are evolving. It's a good thing. I love this perturbation on the market.
I think some of the investors were crazy, frankly speaking, not to pick up investment in us, but on betting on even companies that I have seen doing DCT with nothing.
Mm-hmm.
Now we crunch them. Thank you, Anthony. Keep going. In many other sectors where valuation was absolutely unreasonable and they are going to pay the price because I don't think they will ever get the return on investment, and we need to use that situation. For me, I love when there is a tough environment like this. Now I know it's rocky and people are concerned, but frankly speaking, we know where we want to play and how the framework of this dynamic will evolve.
Yeah. If it's this person. Stefan?
Great. Thank you, and thank you for all the presentations, today and the dinner last night, of course. Two questions. Thank you for the information on the cloud business. Just wanted to dig in on the licensing side, 'cause obviously the guidance of maybe 10% compound annual revenue growth also assumes the licenses side of the business continues to grow. Just wondering what kind of visibility you have on that. Is that mainly with existing customers and programs that are underway, and therefore that's actually a high degree of visibility on the growth of the licenses side over the next couple of years?
The second question is just on the CapEx to sales ratio. Do we expect that to increase as the cloud grows as a percent of revenues? Thank you.
I take the first one, and you take the second one, Rouven?
Sure.
It's still a mystery for me why all of you want to kill the license model. Because there are certain industries, there is no other way to do this. For example, the defense. Could you believe the guy that will accept that we will follow what they do with the license, with the technology? I'm not so sure. At the end, you have to sell an equivalent of license, even if they will use it by themselves on the cloud. That's, for example, one of the reasons. There are certain country where there are political situation where right now, if you are, for example, a Chinese company, maybe not sure you will want to have yearly subscriptions. Because if something is happening, it could turn off rapidly.
This is again another reasons to have this model to continue. I could name many of them. Just keep in mind that it's not in contradiction to have both.
Mm-hmm.
At the end, it's a question of how to price the right way the two things. Maybe in the future, it's probably your point, we should price more for the license than the subscriptions. That's maybe a good idea.
Yes, and to build on Pascal on this before I get to the second question, I think also is when you look at many of our customers, right? They're extremely capital-intensive. They've built their operations for a long time, and they need to continue to capitalize on their previous investments. I think it would be strategically for us not right, if we were to introduce a disruptive change to the strategy. There will be parts of their, our customers' business that will continue to consume licenses while other parts are more progressively already in the cloud. These mixed environments. In the industrial sector, I just visited the big industrial fair in Germany, the Hannover Messe.
One of the key takeaways that I took from there is that many of our end customers are still very early in the cloud adoption, right? They still are relying on a lot of licenses to deploy locally on desktop. This opportunity is still very relevant, and we're serving our customers, right? We are also working with them on their cloud strategy. That's something that coexists. On the CapEx, of course, we do the CapEx sizing based on the cloud demand very frequently. It's actually not something we do annually. We do this almost weekly, right? When we measure the traffic in our cloud and the sizing and capacity that is required, it's a very dynamic process. I don't think that the ratio of sales to CapEx is going to change.
You remember we are using also, we have our own infrastructure, but we have the ability to use hyperscaler.
Yeah.
What we have in common is the operations, the cloud operations. We have, for example, more than a third of the capacity which are coming from AWS right now. In the country where we do not have a critical mass or in a domain or in the region of the world where it is too costly, you know, to set up our own data center, we are using this flexibility. Do not translate automatically that 100% will be supported by our own infrastructure.
Right. Yeah. Okay, one final question.
Yes. Thank you. One final question with two quick parts to it. I'd like to come back firstly to something that was mentioned earlier in terms of the increased expectation of both industry growth in manufacturing and Dassault growth in manufacturing. I think you've articulated well the reasons for that. My question is, you previously expected 10% growth, and now with a higher rate of growth for the industry and yourselves in manufacturing, you still expect 10% growth. Wondering if you can comment on that and whether any aspect of that is related to the expectation of bolt-on contribution to the growth. The second part to the question is, how are you reacting to the current pricing inflationary environment given what some other enterprise software vendors are doing currently? Thank you.
Okay. I can start with the first questions. Again, the value up and the value wide strategy is the answer. I did some computations a few months ago, and I will make a bold statement. I think we could deliver the 10% growth only focusing on the current install base we have. It's probably not good to fulfill and to nurture the future growth because we are far from having penetrated the large install base we have with everything we do. That's the reason why we are confident. There are many, many, you know, drivers happening. This is where the no matter what is coming from. Just to translate my word from the beginning.
This is also why we also have certain confidence despite the macro environment. It's because this transformation is really happening. We have a number of large customers who have engaged these transitions and these transformations, and they will not stop, right? It continues. Yeah. On the inflation side, you know, I think there's no update compared to what we said in Q1 call, right? I think from an expense standpoint, we have adjusted our compensation schemes to inflation levels, but we continue to monitor this of course. We are hiring very successfully, so we are able to attract talent in the market despite inflation, yeah. We are on the top line, on the revenue, there is always some time lag, right, until you are able to get your pricing to your...
Your updated pricing, certainly in the indirect channel, until that is updated. We have done our homework, at the end of last year to make sure that we have price rate increases reflected, for 2022. In the direct business, of course, we have the ability, you know, as we are in negotiations, we always are focused on pricing for value, right? When we come with 3DEXPERIENCE, we have multiple ways to increase and price for value, so we can always reset that baseline. Of course, we are protected in our support and maintenance contract with CPI, protection clauses as a standard. Maybe at this point in time, do we want to wrap up?
We should.
Yeah. Bernard, Pascal, please.
Well, first of all, thank you very much. Thank you for joining us at the dinner yesterday. For those who flew to Paris, I think it was good to be together physically finally after this long period of the pandemic. It was also good to have all our people connected. I hope you have a new update about the fact that we are confident for both the midterm and long term. We will be ready at the right time to share with you the ambition for the next five years cycle. But it's a little bit, you will admit, it's a little bit too early to speak about that now, even if we are very confident for 2024.
We are very confident that before the end of the current cycle, we will be ready to give you the visibility that we have always done for this five-year cycle dynamic. Have a safe trip back. Enjoy your evening, hopefully for have a good time. Spend your money in Paris. We need that for the country. Enjoy your time. We are always there for you. As you know, we are super committed to continue to serve this industry for a more sustainable world. Thank you very much.