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Dassault Systemes and IBM put right the PLM Ecosystem


I had the chance to talk with … Dassault Systemes and IBM today about Dassault’s announced acquisition of parts of IBM’s PLM business. For many, this is the dissolution of a long-standing marriage that they are comfortable with and makes sense. They may mourn the loss. To me, this is just the final correction to a legacy relationship that has served its time and purpose. Dassault Systemes (DS) and IBM have been great partners – and still will be. But this move will allow IBM and DS to focus on their core competencies and allow DS to continue pursuing their PLM vision.

Dassault Systems Acquires IBM PLM
Dassault Systems Acquires IBM PLM

A Market Correction, a Return to Core Competencies

The relationship has evolved over time. What made sense when the relationship started has changed based on the maturity of the PLM market. DS PLM software is being used by a lot of major companies, and they have their own choices for their systems integrators and consultants. So over time, DS has developed relationships with other leading systems integrators. In the same way, IBM customers may be using DS solutions, or they could be using software from Siemens, PTC, or others. So IBM has developed relationships with these PLM companies. This is just the natural way of things in a multi-vendor market, and it is probably the most beneficial relationship for DS and IBM customers.

To me, this is the natural course of things and it allows each company to focus on their strengths:

  • IBM can now focus on systems integration, business consulting, and infrastructure like middleware/SOA/business intelligence/cloud computing in a multi-vendor world. IBM is not out of the PLM business. In fact, PLM is still very strategic to IBM. But directly selling and servicing PLM software from one vendor no longer makes sense. IBM will transition their sales and support teams, but retain their PLM Centers of Excellence, domain expertise, and consulting resources. IBM will still be in PLM in a big way and can focus on their significant PLM opportunities, but in a way that makes more sense for IBM.
  • Dassault Systemes can now focus on selling software and servicing their customers. This move strengthens the DS team, and gives them more control of their sales and support business because it is now fully a part of DS, and working with their other PLM partners. DS can now focus on being a software vendor without worrying which customers are direct customers and which are IBM customers. DS benefited greatly from the IBM relationship over the years, but has been ready to move on for some time. And they made a bold market move to make it happen.

This move, although significant, is simply a matter of core competencies and focus. The legacy relationship just didn’t continue to make sense at this point, and it has evolved in this direction over the last several years.

Impact on the PLM Market

This is good for the PLM market, and I don’t think it will be a huge surprise that these two PLM leaders have returned to more focused roles. The way that it happened (as an acquisition) accelerated a needed change, so that might be a surprise. I think this is good for everybody. DS partners with lots of consulting firms and IBM partners with lots of software vendors. Now, none of them have to be concerned that IBM and DS are unnaturally tied together. This is a correction of a legacy issue in the PLM ecosystem, in my opinion. Now, all is right with the universe.

This had to happen, and the IBM-DS relationship has been evolving in this direction over the last several years. The real question that was outstanding in my mind was how DS and IBM could take the final step to return to more focused roles. The end result of an acquisition is probably the cleanest way for this to happen, and one that I think should work well for both businesses. I would not have predicted an acquisition, but now that it is done I think it was a great resolution. It is a win-win for both companies.

One last piece to consider is that Dassault works with IBM, but also works with Microsoft and others from an infrastructure point of view. Having IBM and DS play more focused roles in the PLM ecosystem also makes those relationships more straightforward.

Impact on Manufacturers
The net impact on the manufacturing industry? As much as this change means to the market (and to IBM and Dassault) I think that customers will see little difference. The same people that were supporting them before will continue to support them, although they will have a different logo on their business card. IBM is still strongly in the PLM business, so those IBMers that stay in IBM will still be available as well.

So that’s what I hear from DS and IBM, I hope you found it useful. What do you think? What else should I have asked them?


  1. Here are my questions:

    Who had access to the boardroom? IBM or DS?

    For a long time, there was a general sense out there (with no hard data) that IBM gave DS invinciblilty. That it was IBM that protected the CATIA franchise.

    In this new future, the question is who will IBM bring to customer’s boardrooms?

    Next question… what will happen during the lame duck period? I have to assume that Siemens and PTC are both sharpening their knives, looking for the slightest mis-step.

    • It is a mis perception that IBM PLM division opened doors for anyone into the boardroom, Big Blue IBM definitely does have access but not IBM PLM. So from that perspective it really is a non starter in terms of an argument. IBM non PLM guys are least interested in moving PLM into their deals as deal size of PLM is very small as compared to the larger services and consulting deals that are out there. Same was the case with EDS and UGS, same struggle, services company trying to sell software and vice versa.

      • Andy,
        I think we agree on your point about IBM. I didn’t mean to suggest that the IBM PLM organization has access to executives, but the rest of “Big Blue” IBM. For that reason, Dassault did not acquire this access. So the argument would be that they (Dasault) will not be able to sell effectively without it. My point is that they have other partners with this access, including Deloitte, Accenture, and others. Being separate from IBM will help them expand these relationships.
        So now Dassault can be a software company and IBM can be – well IBM. That is why I think this is such a win-win.

  2. Evan,
    You ask some important questions. I will share my thoughts, and welcome your response on them:

    – Who had access to the Boardroom? IBM. But as much as IBM does, I would say that Accenture, CSC, Deloitte, Kalypso, and other management consultants / systems integrators (SIs) do. DS has been expanding their SI relationships much in the same way that Siemens has expanded theirs after being spun out of EDS. In some places, DS got access to boardrooms through IBM. But in other ways, they needed to get access to the boardrooms that didn’t count IBM as their trusted adviser.

    – Who will IBM bring to boardrooms now? It could still be DS, and probably will be in many scenarios. But it may also be Siemens or PTC. Isn’t that the way it should be? Shouldn’t a trusted adviser be independent of the software they are advising on? I don’t think IBM will be less likely to bring DS to the table, they are good at winning deals together. But they now have options (and have been moving in that direction for some time).

    – What will happen in the interim? I think both IBM and DS are motivated to keep selling together. They are long-standing partners, and have had a lot of success together. It will take a while before these two organizations untangle themselves, and in the end there are a lot of strong relationships that will last beyond the acquisition. Siemens and PTC have been wanting to work with IBM, and IBM has wanted to work with them. Hopefully it will not be up to the customers to choose which SI and which Vendor to bring to the table – and those choices an be made independently.

    Maybe it is because I am more of an “enterprise software for manufacturing guy” in the way I view PLM and I don’t bleed triangles like a born-and-bred “CAD guy,” but this move seems to put things back the way that markets work best. SIs and vendors are partners, but not exclusive partners. I think it is best for the SI, best for the vendor – and most importantly best for their mutual customers – the manufacturers.

    Sorry, short questions and long answers. I look forward to peoples’ thoughts on this.

    • Paul,
      Aren’t all of the same people in IBM PLM today going to be in Dassault tomorrow? Don’t they all want their commission checks or bonuses? I am not sure that I understand how this interim period will negatively impact them. Who is not motivated to sell? Or do you think the customers will be reluctant to buy? And deals like this fall through, so everybody should be motivated to keep things going in the interim. Or do you think people will be concerned about their jobs and jump ship? Please help me understand your point of view.
      Thanks for your comments,


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