Cloud PLM – to raise the stakes?

Cloud PLM – to raise the stakes?

PLM news of the day – Arena Solutions Receives Strategic Growth Investment from JMI Equity. Founded back in 2000, Arena Solutions was pioneering the idea of “on demand” software today known as “cloud”.  Here is an interesting data point from press release about number of customers Arena has.

Founded in 2000, Arena invented cloud-based PLM and today provides an all-in-one product development platform that unites PLM, ALM, supply chain collaboration, and QMS for the design and manufacture of complex electronics. Its solution creates a collaborative development-to-production workflow tied to the product record that connects electrical, mechanical, and software engineers, allowing them to work seamlessly with product development, quality, and manufacturing teams. Arena’s platform is the system of record for streamlining these processes, delivering value to customers by helping improve product quality, reduce costs, and accelerate time to market. With users in over 125 countries, Arena has approximately 1,000 customers today, including Intuit, Citrix Systems, Nutanix, GoPro, Thermo Fisher Scientific, and eBay.

The amount of investment, valuation and other financial details are not disclosed. Verdi Ogewell’s article in – “PLM in the cloud is revolutionizing” – Equity firm JMI invests in Arena PLM coming with interesting financial assessments of cPDM vendors.

According to the article there are 2 groups of cPDM players – dominant players and smaller players.

The dominant players, such as Siemens PLM (Teamcenter suite), Dassault Systèmes (3DEXPERIENCE/Enovia), PTC (Windchill), SAP (SAP PLM) and Oracle (Agile PLM) where revenues range from Siemen’s PLM’s close to $2 billion to Oracle’s barely 800 million dollars.

The smaller players, such as Autodesk (specifically for the cPDm area and their cloud-PLM platform Fusion Lifecycle), Aras PLM (Innovator) and Arena (Arena PLM), all estimated to be below $100 million per year in revenue.

It seems to be not apples to apples comparison. $2B Siemens PLM’s revenues are including CAD, CAE and other business and not only cPDM. The following slide from CIMdata can bring an additional level of clarity. Even so, an average difference between dominant and small players in the market is 10x.

I’ve been playing with number a bit and here is my simple math. If Arena’s revenue is $80M then 1,000 customers are paying $80K annual subscription to Arena. With average cost of 80$ / user / month according to Arena Solution website can be calculated as 80-100 seats of Arena for every customer with an average $1K/seat annual subscription. In the world of cPDM, it can be considered as a very large business scale. article speaks about Solidworks investment and acquisition as an example. That one is not completely aligned with cPDM segment. The last large cPDM segment exit was Matrix One, which was acquired by Dassault Systemes in 2006 for for $408M.  I’m going to attend Autodesk Accelerate 2017  (known as cloud PLM) event soon in Boston. Hope to get more numbers and data points from there.

What is my conclusion? Cloud and PLM are on the raise. With a growing complexity of product development, companies are looking how to manage it using reasonable priced software. Slightly disappointing factor is that none of smaller players in cPDM segment is publishing financial information. So, most of numbers above are only guesses. Can Arena make a future deal for JMI similar to what MatrixOne / Dassault? Just my thoughts…

Best, Oleg

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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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