Will Aras buy a CAD vendor? (future of CAD-less PLM)

Will Aras buy a CAD vendor? (future of CAD-less PLM)

For the last few years, Aras made a story in PLM world. Aras was founded in 2000 and had a turbulent story until coming with the business model of enterprise open source- a mix of free license combined with community building and subscription model. Last week I learned that Aras made it to the top list of Forrester research. See my blog few days ago for more details – What I learned about PLM leaders from Forrester research. Among all companies there, Aras is the only small vendors in billion dollars company club (Autodesk, SAP, Oracle, Siemens, Dassault Systemes and PTC). Regardless on $100 millions entry point published by Forrester, there is a big difference between Aras and all others.

As I expected, the discuss in this post was mostly about Aras. My hunch, not many companies are really interested how many inches up or down are ranked Dassault, Siemens or PTC. The position of Oracle and SAP is clear as well. But Aras is clearly a darling of PLM world made a story. And what is next for Aras is one of the most important question to ask in my view.

Aras is so called “pure PLM” player. For the last few years, this position is almost disappeared from PLM industry landscape. With the exception of very few firms, all pure PLM vendors such as MatrixOne and Agile PLM were acquired by CAD and ERP vendors. So, what will be the trajectory of Aras in the next few years? Will Aras embrace the future using their unique business model, will be acquired by CAD vendor or actually expand into PLM world by acquiring CAD vendor? I’ve got some perspective on this from Joe Barkai commenting online to my blog:

This is a fundamental question: should ARAS add a CAD tool to its portfolio to be more like the “big guys”, or focus on remaining a “pure play” open standards-based PLM? The hopes of CAD companies to force a de-facto standard in a given organization are not any closer to materialize, and heterogeneous CAD (and simulation) environments are here to stay. In my opinion, ARAS is better off investing in supporting new and potentially differentiating engineering and design methods and tools such as MBSE, complex large-scale mechatronic systems, advanced simulation, etc.

A thought: Instead of existing disciplines, e.g. CAD, EDA, which tend to be, and perhaps should be, multi-vendors anyway, I would consider investing in one of the emerging uber-categories: MBSE, IoT, perhaps next-gen requirements management and configuration management, whatever they shape up to be.

A very impressive success of Aras brings the question about future of CAD-less PLM vendors. It was hard to imaging large and successful PDM / PLM player without accomplishing by CAD vendor for the last decade. Is it going change? In my view, this is one of the most fundamental question for CAD / PLM industry. I’m not sure there is no answer on this question, but Aras is clearly a sign of changes in PLM industry and vendors’ landscape.

What is my conclusion? Aras success was build on a combination of free software and subscriptions. At the same time, many other PLM business were acquired and shutdown. Regardless on future trajectory of Aras, it is a confirmation that PLM industry requires rethinking and alternative business models to compete with traditional well-established players.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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