A blog by Oleg Shilovitsky
Information & Comments about Engineering and Manufacturing Software

Will Aras demature PLM industry?

Will Aras demature PLM industry?
Oleg
Oleg
13 May, 2017 | 4 min for reading

Aras is buzzing PLM industry. Aras PLM gradually took a position to challenge big 3 PLM vendors – Dassault Enovia, Siemens’ Teamcenter and PTC Windchill. Six years ago I posted an article Aras PLM lines up against Windchill, Enovia and Teamcenter. Back in 2011 it wasn’t clear if Aras will take a trajectory to clash with big PLM vendors. But between all possible options, Aras followed the transformation from affordable PLM solution with price started under $50’000o to enterprise PLM platform. It took some time, but we can see that it started to bring benefits to Aras.

Aras is certainly in the focus of engineering media. Here are few recent articles that caught my attention – Aras: breaking new grounds in PLM defining Aras as new-age PLM platform; Making the case for an open PLM platform by Digital Engineering; Can Aras battle their way into the PLM Big Leagues.

The quintessence of recent news about Aras Corp. was the information about a very surprising move: Siemens PLM’s Former CEO Tony Affuso Joins Aras Board of Directors. Tony Affuso described his move in the following passage:

“I was attracted to Aras because of their disruptive technology, open-source customer engagement model, and the fact that their technology has recently been selected over that of their competitors by several of the world’s leading engineering and manufacturing companies,” said Affuso. He also added that he was impressed by Aras’s “customer-first mentality.”

I can see reasons to be attracted because of technology and customer engagement process. But I also can see the value Tony Affuso can bring to Aras Corp helping to figure out how to displace old Metaphase system or flip unhappy Teamcenter Unified customers to Aras Innovator.

Aras is not absolutely unique in what he does. Elements of their technology and business model can be spotted in recent moves of CAD/PLM vendors to subscription models, cloud and services. It made me think about dematurity in PLM industry.

Dematurity is a term that was coined back in 1990s by HBS professors W. Abernathy and K. Clark. The example they came with was related to U.S. auto industry that was undergoing a profound renewal spurred by Japanese automotive corporations. Despite their superiority, Toyota and Honda didn’t fully disrupt Motor City companies. They dematured U.S. automotive companies. Detroit car manufacturers adopted new tools and techniques and an entire industry advanced.

John Sviokla’s article How Old Industries Become Young Again: Five indicators reveal when your sector is about to be transformed by dematurity  is a good read to discover and learn more about dematurity and how to spot it. New customer habits, new business models and new technologies are among indicators and Aras is following them pretty close by providing unique subscription model combined with improved data management technologies. Aras can ignite the change process for existing big PLM vendors. Here is recommendation given by John Sviokla in his article:

One of the few certainties in business today is that dematurity is coming to your industry, and soon. Responding effectively requires that you throw out old assumptions about how value is built and sustained in your markets. You need to ask questions about your industry that others believe have already been fully, inexorably, answered: What makes for efficient scale? Who is the competition? Who are the customers? What do customers want? Who owns what? Where is the risk?

What is my conclusion? PLM industry is entering an interesting moment of change. Aras is competing at the core segment of this industry – large heavy accounts with the historical record of long implementations cycle, M&A activities, customers’ pain, dissatisfaction, financial loses. Aras has a momentum, innovation and newer technology. Existing PLM companies have customers and revenues. Although business model is one of the hardest things to change for existing business, it would be dangerous underestimate the importance of existing assets such as customers and revenues. Aras product will have to offer something very unique and different to existing Teamcenter customers to charge them for new Aras subscriptions. Kind of magic PLM formula of success and Aras can be a winner. Alternatively, PLM vendors will figure out how to change and demtaure to fight back. Just my thoughts…

Best, Oleg

Want to learn more about PLM? Check out my new PLM Book website.

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

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