Culminating a nearly 30-year relationship around CAD and
Product Lifecycle Management (PLM) software, IBM and Dassault Systèmes have
entered into a deal in which Dassault plans to acquire IBM's sales and
consulting operations around PLM for the hefty price tag of $600 million in
cash.
The deal, the largest in Dassault's history, will allow both
companies to concentrate on their core competencies. IBM, which has been
selling components of the Dassault suite, including its CATIA 3D CAD software
and ENOVIA data management software, will now focus exclusively on its
consulting and integration services for the broad spectrum of PLM offerings in
addition to selling its middleware and infrastructure products. For its part,
Dassault, which will gain ownership of its complete PLM application portfolio
as well as existing customer contracts and related assets, will now have direct
control over the sales process and more interaction with its PLM customers.
For existing and future IBM and Dassault customers, the deal
should simplify the engagement process since oftentimes they would have a
software licensing deal with Dassault and a separate consulting and services
contract with IBM. "The acquisition will simplify the engagement process
because sometimes IBM wasn't selling all the Dassault applications at once,"
says Dassault President and CEO Bernard Charlès. "Now with one set of
contracts, we can provide the software and the consulting expertise and focus
on our application knowledge and industry knowledge. We can work as a team for
a total solution delivery without having to share royalties on software, which
was the case in the past."
While the IBM/Dassault partnership was never exclusive, the
proposed sale will give IBM more opportunity to offer consulting and
integration services around other PLM offerings. In June, IBM took some key
steps toward that scenario with the announcement of a
deal with Siemens PLM Software on a set of PLM applications and consulting
offerings based on Siemens' Teamcenter platform and IBM's middleware and
service-oriented architecture (SOA) framework. "This levels the playing field
for Siemens and other players," says Bill Carrelli, vice president of Strategic
Marketing for Siemens PLM Software. "There were certainly some differences in
terms of the relationship (with Dassault) before ... and for clients of IBM, this
opens them up to look at other (PLM) players."
Industry analysts played down the idea of the announcement
signaling a rift between IBM and Dassault, but rather say that the timing is
right to go their separate ways and the move will ultimately benefit customers.
"It gives customers direct contact and direct dialog with the owner of the
software," says Ed Miller, president of CIMdata Inc., a market research firm
specializing in PLM and product development. "This is a big deal. Nearly all
the big CATIA sales have gone through IBM and now (those customers) are getting
direct participation with Dassault. Many of them are very happy about that."
As part of the acquisition announcement, IBM says Dassault
will continue to remain a close development and integration partner via
Dassault's appointment as an IBM Global Alliance Partner. The deal, which is
expected to be complete in the first half of 2010, calls for nearly 700 IBM
employees to become part of the Dassault organization. Managing that
integration seamlessly will be Dassault bigger challenge going forward, Miller
says.
Carrelli, who has experienced firsthand the difficulties in
melding organizations, agrees. Siemens PLM software grew by acquisition over
the last few years and the company has toiled over the years to integrate both
the people and the disparate technologies into a cohesive PLM solution. "While
the technology isn't changing, the people issue is still huge," he says. "You
can't underestimate that."
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