Can Siemens, PTC, and Dassault Systemes compete with Aras PLM?

Can Siemens, PTC, and Dassault Systemes compete with Aras PLM?

Unless you lived under the rock and didn’t look around for PLM news for the last decade, you should know Aras Corp. It was started almost 20 years ago and it made few interesting moves in the past decade developing a very unique model of enterprise open source. I wrote a few articles about Aras, so you can check them out:

Aras: Bad, Good, Ugly and Open Source

What is behind Aras PLM upgrades?

Aras PLM momentum

Aras goal is very ambitions and, after visiting ACE2011, I wrote an article  Aras is lining up to compete with Teamcenter, Windchill and Envoia, which set few very interesting discussions about Aras trajectory in PLM business.

Aras business model is free downloads and subscription service, which included free upgrades that touched a nerve of manufacturing companies working on PLM projects. The product itself (Aras Innovator), which sometimes defined by PLM pundits as a toolbox, is a very interesting piece of technology that became mature enough to win a number of very important and strategic PLM deals competing with top three big PLM vendors.

In my recent article, I shared my thoughts about what are Aras strong sides and gaps in the competition against big PLM players. Check it out here – Aras and Siemens are clashing in search for next “killer PLM”.

Engineering.com article written by Verdi Ogewell is speculating that Siemens’s strategy is to use Mendix and other enhancements in Siemens platform to compete with Aras.

Whether the Xcelerate portfolio and Mendix become an answer sufficient to secure Siemens’ position as a supplier of tools that link the entire value chain has yet to be determined. It is clear, however, that Mendix and the associated portfolio will be a tough opponent for Aras PLM, with Siemens PLM’s Tony Hemmelgarn (pictured) moving their offensive position toward building the digital thread at the cPDm level to match Aras’. The resources Siemens can bring into this will be a formidable competitor to Aras PLM, which has had several successes with its solution.

I don’t have a dog in this fight, but some of these points can actually hold water and might make some large PLM vendors nervous.

1- Aras is not a startup by any criteria, but it is much more nimble and agile comparing with large outfits like Siemens and other PLM vendors.

2- Aras unique business model combined with solid technology is making a dent in Siemens Teamcenter install base. Siemens is a company with the largest cPDM customer base is most probably in defense position against Aras Innovator.

3- Aras technology is mature and flexible. At the same time, it is still a very traditional PLM tech stack coming on top of the relational databases and used as on-premise tool similar to Teamcenter and other cPDM products.

Does Aras have a chance to take over Teamcenter customers? We can only speculate about it. At the same time, I’m sure Teamcenter architects and business people should be concerned about growing competition.

How to protect Teamcenter and other cPDM brands from Aras invasion? Accoring to Engineering.com, Siemens put Mendix and a few other acquired products and technology to defend them from Aras. I don’t know if it is true or not. I want to share some of thoughts about Aras vs big PLM (and specifically Siemens Teamcenter) competition.

1- Aras’ strongest side is also the weakest thing for the future

Aras unique business model (enterprise open source) assumes companies will be downloading Aras and playing with the installation in house. Then, coming to Aras to buy a subscription. While it works well now, I can see a trend for IT of enterprise companies looking at how to get a business system delivered as a set of services from cloud IT infrastructure. While you can get Aras available via the Microsoft Azure platform, it is still not a simple click like it was with free Aras download. Also, you need to pay for Aras subscription and Azure servers to make it work. Aras was never a SaaS player and it might be one of Aras Achilles Heel. Teamcenter should build a platform for the 2020s with the capability to deliver something that Aras doesn’t have. Aras can do it or acquire some technologies, but this is where I’m coming with #2…

2- Aras focus on the top elite of the market, needs to focus and leaves a huge portion of the market not addressed

An elephant in the room – PLM solutions are very sensitive to cost. Engineering teams and manufacturing companies might not even acknowledge it in public. But, it is true. Aras strategy to sell to very large companies is actually very much repeating the sins of all existing large PLM vendors ignoring midsize enterprises. It becomes potentially vulnerable to bottom-up competition. While nobody really did it in the past 20 years, the unique condition of today’s market with large distributed manufacturing networks combined with powerful and reasonably priced cloud infrastructure can create a perfect storm situation for large PLM vendors to address this market. Aras is relatively small and it can be hard for Aras to play a broad strategic game. At the same time, PLM solutions are incredibly sticky. To build a bottom-up defense line can help Siemens and other big PLM players.

3- Flexible platform and lack of Out-of-the-Box

There are never-ending debates around out-of-the-box PLM. Check my recent article. As much as flexibility is important, companies are very much annoyed when they need to buy services to implement Aras solution. Such implementation can cost a substantial amount of service, which can be competing with the cost of traditional (non-enterprise open source) PLM software. Aras philosophy of “flexibility” leaves too much space, with huge demand for simple and easy solutions. Focused cloud applications can target some specific niches and scenarios that Aras just cannot do.

4- Mature technology vs modern technological trends

Aras technological roots are going back in the 1990s. Aras technology developed on top of SQL database. It is mature and scalable but also going to be outdated fast. is a potential problem in the way this technology can be developed in the future. Since there is very little doubt that the future of the enterprise system is in the cloud, global tech stacks these days look nothing like SQL-backend 3-tiers technologies. A monolithic database is a potential problem to move into microservice architecture capable to scale horizontally.

What is my conclusion? Aras has a good chance to overplay Siemens and other established PLM vendors. If it will happen, PLM history will have a record of another David vs. Goliath battle where an agile and nimble player won over old established technology and business. At the same time, there is an opportunity that Siemens (and other PLM companies) will skate to where the puck is going, not where it has been. Just my thoughts…

Best, Oleg

Disclaimer: I’m co-founder and CEO of OpenBOM developing cloud-based bill of materials and inventory management tool for manufacturing companies, hardware startups, and supply chain. My opinion can be unintentionally biased.

Image by Barbara A Lane from Pixabay

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  • Sven Müller

    I think there is a huge difference between Aras and its competitors based on its technological approach. For example as a vendor you can buy an application and integrate it into your plattform via interfaces etc… or you can just buy the ip of the application and built it up newly from scratch, so it fits exactly into your software architecture.

    First one is cheaper and faster, second one takes more time but at the end its the only approach to ensure stability and flexibility.

    Simple question, why can Aras provide any support for any type of own customization of an instance or Aras Innovator? And why you can’t get support from other vendors for your own customization?
    In terms of software development there is the principle of “seperation of concerns” which just means keep every single object (method, function, classes up to whole modules) as simple as possible and every object has exactly one job to do. If you do so, you can have an easy life in enhancing the functionalities of your product. This principle works also for complete plattforms.

    So what do i think about the other mentioned competitors? They have nice integration modules, looks fine, looks modern, but under the hood, there is still technology from the 90’s, glued together so they work together on any way, anyhow. But can an architecture be stable with this? I don’t think so. The “big three” are just bying time in my opinion, maybe hoping nobody cares about new technologies and approaches or maybe developing in the background something brand new for what they just need more time. In this case, they can have a come back in competition. At the moment, their greates luck is, that the minds of their customers are developing even slower than their products.

    But as said, this is only my humble opinion. 🙂

  • beyondplm

    Hi Sven, thanks for sharing your insight.

    There is one thing you cannot change when you build a business – market and timing. You either get it right or wrong. The greatest product in the bad market at the wrong time will fail.

    As you said, the greatest luck is that the minds of customers are slower. This is the best reflection of the market Aras is going after. Very large industrial enterprises with a super complex decision making process.

    At the same time, PLM applications are super sticky. Once you invested millions, you won’t change it unless you will be really in crisis. Or expansion is really expensive and complex.

    In my view, these are two main use cases Aras is selling to. Those customers failed with their PLM programs and looking who can bail them out. Aras can do it better than others. Or they need to expand and support business and Aras seems to be a better (free upfront cost) – you can download use it and then pay when you need.

    Aras architecture is defined in the end of 1990s and it was growing nicely under great supervision of Peter Schroer and Aras engineering team. The challenge of this architecture is that it is still single-database foundation. Model driven approach Aras developed is the best the architecture of 1990s can give us. It is like ICE (internal combustion engine) at the peak of its development. It is super advanced and ICE technologies are super efficient. But the future is electric. Therefore car companies and investing in the future.

    In my view, the biggest challenge of Aras model is a scale and
    resources. IT decision makers (especially in enterprise segment Aras is
    going after) are super conservative and don’t like the risk. At the same time, Aras will need to move their platform in the current reality of cloud development (think ICE vs Electric). Aras identified a weak point – upgrades and nicely captured this opportunity. Will it be enough to win?

    Just my thoughts…

    Oleg