Arena Runs The PLM Collaboration Race

Arena Solutions is set to add collaboration tools to its on-demand product
lifecycle management (PLM) application. In doing so, it is throwing in with heavyweights IBM , Dassault Systemes  and UGS, which have been focusing on the collaborative aspects of product development and lifecycle management.

They are trying to make the case that PLM should be used as a
tactical tool for driving innovation.

PLM applications allow customers to see the entire bill of materials and
related documents like blueprints, cost and sourcing information and other
metadata associated with making a product.

Arena’s new collaboration layer will allow customers to track
deliverables, such as project dependencies, the status of components expected
from other parts of the supply chain and expected ship dates for a new
product introduction.

Customers can thus tie project plans to the product record by linking task,
milestone and deadline information directly to each individual item included
in a project. These links streamline project planning and execution and
allow manufacturers to plan for and launch marketing plans with a greater
degree of precision than they are currently able to do.

“We’ve created a rich interaction between the project and the individual
components that make up a product,” said Michael Topolovac, Arena CEO.

Topolovac also told that Arena’s on-demand delivery
model allows greater collaboration among all parties, both inside and
outside company walls.

The reason for the interest in this space isn’t difficult to figure: PLM is
a $65 billion market growing at double digits, and is expected to be worth
$90 billion next year.

Dassault Systemes is the leading PLM applications vendor, with about $1.2 billion in revenues in 2005, according to AMR Research. UGS, which recently agreed to be acquired by Siemens for $3.5 billion in cash, is a close second at $1.15 billion.

Dassault Systemes recently demonstrated a plug-in for IBM’s Lotus Sametime
7.5 client that allows manufacturers to pull sub-contractors into a
real-time discussion around a 3-D design drawing by clicking on the
components they’re responsible for delivering.

Philippe Forrestier, president of Dassault Systemes Americas, said PLM is
becoming a more strategic option for customers as a result of new
collaboration tools.

“Purchasing and marketing departments can watch the evolution of the
project, and that extends its use beyond the traditional engineering
community,” which was the early buyer for these tools.

UGS has also added a collaborative product data management (cPDM) component
to its suite of PLM applications.

John Clendening, senior vice president of marketing for UGS, said that “now
that PLM is driven by the Internet, it’s become much more of a C-level
purchase and is being looked at as a category of enterprise software along
with ERP  and CRM.”

Once its deal with Siemens closes, UGS will be integrated with the German
company’s Automation and Drives group.

Clendening explained that “the vision driving this is that Siemens would
become the first hardware and software vendor of product lifecycle stuff.”

He said the combination of the two companies’ expertise will allow
customers to build virtual factories to ensure that the production line will
work smoothly for every given product.

“The ultimate customer benefit is you save time and money because you can
build all of these things digitally before you spend a dime,” he told

Dassault’s Forrestier was, of course, quick to say that Siemens and UGS make
a poor fit. “Siemens is a company with no reputation in this domain,” he said.
Nonetheless, he said the acquisition validates the strategies adopted by
UGS and Dassault.

Analysts praised the deal, but expressed reservations about whether UGS
would be swallowed by the larger company.

AMR Research analyst Michael Burkett wrote that “UGS struggled with focus
and execution when it was part of the $23 billion EDS organization, so this will
remain a concern under Siemens’ ownership.”

Richard Ptak, principal analyst with Ptak, Noel & Associates, said that the
companies complement each other’s strengths. They should be able to “get to market more quickly with focused products they can both benefit from,” he told

On the same day that the Siemens-UGS deal was announced, IBM announced that
it is strengthening its ties to Dassault Systemes by reselling a greater
number of the PLM vendor’s products.

The Arena collaboration features will be available to customers on Feb. 8.

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