IBM Flexes PLM Muscles in SMB Space

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IBM (Quote) believes that it can turn its brand of product
lifecycle management (PLM), sitting atop its Websphere platform, into a
dominant enterprise planning hub in the manufacturing sector.

IBM is attempting to expand
the traditional definition of PLM (define) into a holistic approach
encompassing product design, production, after-sales and end-of-life
information processing. The application vendor is hoping to convince
customers that its new product development information platform (PDIF) can help stimulate innovation
and top-line growth.

Big Blue is pinning its hopes for platform dominance in large part on
mid-tier companies, which it defines as organizations with between 100 and
999 employees. To that end, it has signed a joint marketing agreement with
product data management (PDM) vendor UGS, which has a strong presence in the
small and medium sized business (SMB) market.

The companies have agreed to market UGS applications in six countries: the
United States, Canada, France, Germany, Japan and China.

Also as part of the agreement, UGS has customized Teamcenter Express, its
PDM application, with the SMB sector in mind and with a
particular emphasis on the machinery, automotive, aerospace and defense
industries. Teamcenter Express will come with templates and demos
pre-configured for those industries, and it includes consulting services priced
for mid-tier companies.

Both companies suggested that the templates and consulting services are key
to serving companies with IT staffs of four to six employees.

“It’s about bringing the power of technology we’ve brought to large
companies, but putting that in a package that is consumable and priced in a
manner that is appropriate for a mid-market customer,” said Elaine Case,
director of SMB at IBM.

This agreement also marks a significant strategic departure for IBM in that
it has had an almost exclusive relationship with Dassault Systemes
(Quote) in this arena for more than 20 years. While its
relationship with Dassault will remain important, IBM wants to signal to its
customers that it will support any vendor offering appropriate applications
for their needs.

While the rival PLM vendors have a lot of feature overlap, Dassault is more
widely known for its CATIA CAD software, whereas UGS is focused primarily on
PDM.

“The strategy is really to partner with a variety of PLM application vendors
so we can meet a huge variety of customer requirements,” Case told
internetnews.com.

Both parties stand to gain from this deal: UGS gets the benefit of IBM’s
huge reach, both in terms of global presence and among enterprise customers,
while IBM gets an introduction to mid-market manufacturing companies where
it sees the opportunity to gain a substantial foothold.

Case noted that it was her group, rather than the software group heading up
the PDIF initiative, that led negotiations for this deal.

She said IBM believes the mid-tier market opportunity represents $255
billion in potential revenues, with some industries enjoying 39 percent
revenue growth.

Kerry Grimes, vice president of mid-market and global channel sales at UGS,
told internetnews.com that while the initial focus of the agreement
is in the SMB space, UGS is also eyeing larger accounts it could win thanks
to its relationship with IBM.

Gartner analyst Marc Halpern noted that while IBM can become an important
conduit and provide a platform for PLM vendors, the agreement “also opens
more opportunities for IBM in industries and classes of applications where a
vendor like UGS happens to be stronger.”