Dassault Closes IBM PLM Acquisition

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The $600 million deal for Dassault Systemes to acquire IBM's PLM sales and client support operations has officially closed, giving Dassault a unified product line and PLM value proposition and giving customers the ability to deal with a single provider.

The pair, which had a relationship around engineering software and PLM for the past 28 years, will still work together under a Global Alliance partnership. Under this agreement, the two players will continue to jointly invest in developing and deploying PLM solutions to customers while strengthening their cooperation in areas such as professional services, cloud computing, middleware, flexible financing, hardware, and sales and distribution.

Al Bunshaft, a 25-year veteran of IBM and former global vice president of IBM PLM, has joined Dassault and will serve as managing director. Seven hundred sales and support people from the IBM PLM group have also come over to Dassault to bolster its field sales and support organization.

Bunshaft says the motivation for the divestiture was that the business model resulting from the 28-year partnership no longer made sense given the two companies' strategies. IBM had been exiting the application software area over the last decade or so and had only sold part of the Dassault software line (ENOVIA and CATIA) to the largest accounts. "From a customer point of view, it's absolutely the right step," Bunshaft says. "It provides them with a single, unified organization in Dassault to support the entire Dassault portfolio whether it's selling, services and support, or professional consulting services. It's the kind of complexity and confusion that customers saw as unnecessary in the prior business model."

While the IBM partnership was never exclusive, Bunshaft says the divestiture now gives Dassault more freedom to pursue partnerships with other companies in complementary areas of software. He downplayed any of the "FUD" (Fear, Uncertainty and Doubt) in the marketplace that this was a breakup or that IBM and Dassault wouldn't continue to work closely together in the future.

"The reality is we've created tens of thousands of mutual customers over the last 28 years and we'd be fools to walk away," he says. "After this long of a partnership, there's too great an upside to turn our backs - it's just a natural evolution of what's taken place over the last 30 years."