What the latest PLM acquisitions may mean to you: three major PLM vendors were acquired in the past 15 months. Shakeout? Bigger industrial automation powerhouses? It's all potentially good news for automotive

Automotive Design & Production,  August, 2007  by Lawrence S. Gould

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The product lifecycle management (PLM) market is all in a tizzy. Dassault bought MatrixOne. Siemens bought UGS. Oracle bought Agile Software.

"You could argue that now everybody has a few less choices; the market has consolidated to a few major players," says Ken Amann, director of research for CIMdata (Ann Arbor, MI; www.cimdata.com). But then he points out that two of the three PLM vendors were already major players in automotive, and it's not like two of the three acquiring vendors weren't already providing PLM to some extent.

What's become clear over the years, says John Squire, vice president of worldwide marketing, Dassault Systemes' Enovia brand (Charlotte, NC; www.3ds.com), is that "customers want to deal with fewer vendors, not more. PLM technology is becoming less of a factor. PLM depth of coverage, how rich the solution is, is becoming more of a factor."

Therein lies the justification for these recent acquisitions, how the acquiring companies are going to differentiate themselves, and what automakers and suppliers should be looking for in the future.

Dassault buys MatrixOne

Engineering, manufacturing, and PLM software vendor Dassault Systemes' acquired PLM vendor MatrixOne for $408-million just over a year ago. Squire says MatrixOne lets Dassault grant access to detailed product definition to virtually anybody in the extended enterprise, and to standardize business processes that use that information across disparate groups, including non-engineers and other people not necessarily using computer-aided design (CAD), digital mockup, or digital manufacturing tools.

According to Michael Burkett, vice president of product innovation for AMR Research (Boston, MA; www.amrresearch.com), while Dassault was "very good" at PLM for digital design, it would get knocked out of deals requiring enterprise-level PLM. "Often the product bought was MatrixOne." So it made sense when Dassault acquired MatrixOne, thereby complementing Dassault's two other PLM suites, Enovia and Smarteam. The acquisition gives Dassault a better capability to support business process flows across an entire enterprise. MatrixOne is also "better positioned to handle electromechanical systems," continues Burkett. This is important with embedded systems so big in automotive; the industry needs a way to handle configuration management across the mechanical, electrical, and software environments.

Siemens buys UGS

In January, 2007, Siemens Automation and Drives (A & D) Group, a hardware company and manufacturing control powerhouse, acquired UGS for $3.515 billion. "I don't think anybody saw that coming," comments Dave Shirk, vice president, global marketing, for Siemens Automation and Drives, UGS PLM Software (Plano, TX; www.ugs.com). He's right. "I was a little surprised," says Burkett. "This [acquisition] is interesting." Here's why. In the past, Siemens used UGS Tecnomatix when providing services, particularly to design and specifically to simulate large assembly lines. Tecnomatix is not the biggest part of UGS. UGS sells a lot of CAD and a lot of PLM (i.e., its Teamcenter products). The complementary fit is in having UGS on the front end of product development and Siemens at the back end in manufacturing. There's NX for design, Tecnomatix for simulating the manufacturing layout, UGS Teamcenter PLM for managing all the data, and other UGS design and manufacturing engineering software that rolls right into Siemens control logic on the assembly line. In short, this acquisition beefs up the Siemens catch phrases: total integrated automation.

Siemens has bought several companies over the years. This latest acquisition brings the virtual and physical worlds together. Better, says Shirk, "if Siemens can bring production and product lifecycles together, then it can create a platform that gives manufacturers the ability to gain a significant speed advantage in terms of time-to-market, which Siemens believes is the single largest driver to success and profitable growth for a manufacturer. Now Siemens literally has the ability to manage all parts of that lifecycle."

Up to now, explains Shirk, "partners have led us to the 'least common denominator' model, kind of the 'good enough' level of efficiency. But they have not really understood the design intent of a particular machine or tooling environment." Nor have they had the digital manufacturing software tools that stretch from "idea to truck," to quote Shirk.

Virtual commissioning is another area liable to be affected by the Siemens acquisition. Rarely are automobile manufacturers and suppliers building new factories from scratch these days. Instead, manufacturing and assembly plants are pretty much a retrofit. The Siemens/UGS combination broadens the ability to design, reconfigure, and structure a plant or factory in software-to any level of accuracy, right down to PLC, CNC, robot cell, and so on. The accuracy of this virtualness increases significantly with the amount of data collection from the stub-your-toe factory floor and the virtualized design world. The interface, again, is UGS Teamcenter.