Dassault Systemes and IBM put right the PLM Ecosystem

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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?