On October 26, 2009 IBM and Dassault Systemes signed an agreement under which Dassault Systemes (DS) intends to acquire IBM sales and client support operations encompassing DS's Product Lifecycle Management (PLM) software application portfolio, as well as customer contracts and related assets, for approximately $600 million in cash.
DS and IBM have also defined the next steps in their long-standing relationship, and plan to establish DS as an IBM Global Alliance Partner and expand their services partnership.
The transaction is expected to be completed in the first half of 2010, subject to the execution of local agreements and completion of regulatory processes and applicable labor relations requirements in various countries.
While the transaction is being completed, both companies expect their existing operations, including customer service and product availability, to continue as usual. After completion of the transaction and integration of the two companies’ PLM operations, DS PLM customers will benefit from simplified engagement and support processes for DS's market-leading PLM product portfolio.
“The adoption and integration of PLM and 3D collaboration by a growing number of enterprises require deep industry knowledge," said Bernard Charlès, president and CEO of Dassault Systèmes. "The planned integration of the IBM sales force and related business operations represents the largest investment in our corporate history. We are putting our customers and partners first, creating a globally efficient sales organization to bring the value of V6 PLM applications to every enterprise in every industry.”
"We are reaching a new level of customer engagement built on commitment, multi-industry knowledge and high-value solutions for sustainable innovation," added Charlès. "Looking forward, the wide adoption of 3D lifelike experience and PLM will require the combination of direct sales, our network of partners and online communities."
Pursuant to the planned global alliance agreement, IBM and DS expect to continue to jointly invest in developing, deploying and supporting client PLM environments, delivering integrated PLM solutions to their clients worldwide.
The enhanced services agreement is expected to bring significant potential to the global marketplace with extended IBM resources and expertise to help transform client PLM environments, leveraging the DS V6 portfolio. Both companies are dedicated to strengthening and extending their cooperation in the areas of professional services, cloud computing, middleware, flexible financing, hardware, and sales and distribution.
"With this announcement, IBM is evolving its partnership with DS to better align our mutual strengths and better address our clients' PLM needs," said Tom Hawk, general manager, IBM Global Industrial Sector. "This transaction also helps fuel IBM's focus on PLM integration through middleware, business transformation and application services, and dynamic infrastructure."
Steve Mills, senior vice president and group executive, IBM Software Group, added: "Today's agreement positions both our companies for growth in the PLM space, allowing us to focus on our core competencies and better serve our clients. The extensive use of IBM Software platforms in the DS application portfolio will continue to make our partnership unique and valuable to our customers."
Commentary By Jeffrey Rowe, Editor
And with the signing of an agreement, the MCAD world continues to consolidate, but that’s not necessarily a bad thing.
Significant? Yes. Surprising? No. As the PLM market evolves, so must the vendors that supply and support it. Also, this deal would not have been made if both parties were not in synch, but they were — one was ready to sell and one ready to buy.
The relationship that IBM and DS have had over the years (almost 30) may have been tenuous at times, but in the CAD world it has certainly been a lasting one through good and bad times with quite a legacy. With the current state of the economy, it’s not really surprising at all that this agreement transpired. These are trying times for virtually all business sectors, and high-end engineering software and services have been hit harder than a lot of other sectors. I talk to a number of customers of so-called mid-range and high-end technical and engineering software, and the overriding sentiment I hear is that the current releases of software that the have will suffice and “be good enough” until things turn around. When exactly that will be is anybody’s guess, but suffice it to say this is not going to be a banner year for engineering software sales at most if not all levels.
However, DS and IBM parting ways is testimony that sometimes even good relationships must come to an end. It’s time to move on to the next episode. If anything, this may be looked upon as an opportunity for both IBM and DS to focus on their core competencies and what they each do best. This ability to focus will also likely benefit customers of both companies. IBM can focus more on systems integration and consulting; DS can focus more on software and related services. In fact, with the agreement, most, if not virtually all of the affected IBM employees will be absorbed by DS.
Keep in mind, too, that with this agreement IBM is not abandoning the PLM market. Far from it. It just may go a different direction, because it has IBM Global Alliance partnerships with companies such as Siemens and PTC. Overall, the agreement is probably a good thing for the PLM market. With the agreement, it will be interesting to see if, based on annual revenue, DS can overtake Autodesk (who has experienced recent revenue declines) as the top dog in CAD.
So, does this agreement with IBM make DS more of a true design company than it was before? Well maybe slightly in terms of technology, but certainly in terms of increased presence, especially because it got an undisclosed number of “customer contracts and related assets.” To me, that translates into an ongoing revenue stream, at least for the foreseeable future. So, maybe the ~$600 million price tag for the contracts and related assets is a good investment in terms of regenerative income. Time will certainly tell.
The Week’s Top 5
At MCADCafé we track many things, including the stories that have attracted the most interest from our subscribers. Below are the five news items that were the most viewed during last week.
Autodesk Announces Support for Windows 7
Autodesk has announced support for Windows 7. For the 2010 product line, Autodesk will support nine products on Windows 7. These products are Autodesk Inventor 2010, Autodesk Inventor LT 2010, AutoCAD 2010, AutoCAD LT 2010, AutoCAD Architecture 2010, AutoCAD Electrical 2010, AutoCAD Mechanical 2010, AutoCAD MEP 2010, and Autodesk Algor Simulation 2010 software. Autodesk will support Windows 7 for most of its other products as updated versions are released. Windows 7 offers new features and functionality that will benefit Autodesk customers, including full support for 64-bit computing, Windows search and improved performance. Multi-touch support has also become a core capability of Windows 7, and Autodesk is developing new software to take advantage of this technology. At the Windows 7 launch event, Autodesk demonstrated Project Cooper, a preview of new technology for simple drawing and drafting that has been engineered to take advantage of the multi-touch capabilities of Windows 7.
Z Corporation Introduces First Automated, Monochrome 3D Printer
Z Corporation today unveiled the world's first automated, monochrome 3D printer and the company's most affordable automated 3D printer to date, making advanced rapid prototyping technology more accessible to mainstream engineers and architects. Like other Z Corporation 3D printers, the ZPrinter 350 converts 3D data into physical models much as desktop printers convert word-processing files into physical documents. The ZPrinter 350 is available for $25,900 USD (U.S. MSRP). The ZPrinter 350 delivers functionality that includes:
- automatic material loading
- snap-in binder cartridges
- integrated recycling of unused build material
- self-monitoring operation
- control from both the desktop and printer
- 0.8 in/hour (20 mm/hour) vertical build speed
- 8 x 10 x 8 in (203 x 254 x 203 mm) build size
- 300 x 450 dpi resolution
- office-safe build materials, aggressive dust-control, and zero liquid waste