How Aras PLM will replace Windchill, TeamCenter and Enovia… Or it will not?

Time ago, I published an article saying Aras PLM lines up against Windchill, Enovia and Teamcenter. Here is the conclusion from the blog published in 2011:

Aras is definitely moving towards crossing paths with PLM like Windchill, Enovia, TeamCenter. Is it possible to displace large PLM system with Aras today? My answer – it depends. The PLM implementation scope is varied, and every implementation can be different. Therefore, I specially liked the community oriented approach of development. This is something that can make a difference. On the side of platforms and integrations – time will show if Aras will find a balance between throwing resources and effective delivery.

Check pictures and predictions from the article. I found it very consistent with current development of Aras PLM. Aras stayed with their principles of data management, flexibility, integration technologies and open source community development. On the side of multi-platform support, Aras was able to expand to multiple browsers and get rid of ActiveX tech and dependencies on Internet Explorer. However, on the backend side, Aras is remained Microsoft stack. I never heard about Aras running in product on Oracle, so I assume multi-platform back end goals are in research and development stage for the best. Ara is improving their web APIs, but REST API seems to be just introduced for the first time a week ago.

Aras can be for sure called PLM darling these days. It was recognized as a PLM mindshare leader by CIMdata and reported about line of very successful customer implementation supporting leading manufacturing companies in the world. Check Engineering.com article – “On Par with the cPDm Leaders” – Why Aras is Recognized as a New Member of the PLM Elite. Aras PLM announced $40M investment made Silver Lake Kraftwerk with participation from GE Ventures. In my analyzes – What is Aras great fanfare means for PLM, I outlined my summary of Aras success formula. Here it is:

ARAS SUCCESS = MATURE PLM FUNCTIONS + STABLE ARCHITECTURE – HIGH LICENSE COST + ALL INCLUSIVE UPGRADE SERVICES.

Moving forward, I was discussing how future Aras dominance can be build in PLM. Will Aras replace existing PLM vendors, compliment, co-exists? The market for large PLM implementation has no white spaces. Each large OEM has one or even more PLM systems in place. According to Aras, Rip and Replace is not possible and it will come to some sort of co-existence. Check my article – Aras PLM Overlay Strategy Explained.

At the same time, Aras competitors are questioning Aras ability to run for replacement of mature PLM implementations. Navigate to PTC’s (PTC) CEO Jim Heppelmann on Q2 2018 Results – Earnings Call Transcript (page 13) published by Seeking Alfa. Read the following passage:

Q: And on the PLM, I want to just understand some more on the competitive dynamics, especially how customers are thinking about open source PLM solution with this software solution bought from you and your European peers because it seems like Aras is finding some success in terms of selling seeds into the heavy industry market….

Here is the answer provided by Andy Miller – PTC, Chief Financial Office.

Yes. I think Aras is having some success at the edges. A lot of their wins are sort of strange projects in the core of the company a little bit like how HoloDesk can claim that every major manufacturing enterprise has tons of 2D seeds of auto-CAD. But it’s not their CAD system. So I think Aras is starting to win a lot of deals like that sort of not the mainstream system but maybe a test management system over in one department or something like that.

So I think they’re probably doing okay but I don’t think that there’s that much to the open source story. I think they dangle that out there, but I don’t think it’s actually core to their value proposition and I don’t actually think if it were that it would help them because I think in this industry, PLM is very complex and there’s not a vibrant open source community in the PLM universe. And customers don’t want to take on development responsibility for the core technology stack.

So I think that that may be talking about open source is a good way — good conversation starter, but I think at the end of the day they’re selling PLM fairly traditional looking PLM into pockets around the edges of the major systems that companies have deployed. So putting it another way, they’re not a major competitor to us at this point. They may occasionally show up in accounts where we’re trying to show up. Aras announced a win at BMW some quarters before we did. But when we competed for really big business at BMW, they weren’t even in the list of competitors. And they wouldn’t have been because BMW would never bet that important mission critical system on an open source strategy when there is no ecosystem of developers around that open source community.

So I’m saying that’s a great conversation starter, but I don’t think it’s a serious business strategy. But I am saying they’re having some success in pockets like pockets at BMW, pockets elsewhere, but I don’t think they’re yet displacing any mainstream systems.

Both sides in this conversation about Aras vs Mature PLM discussion have some valid points. Aras is clearly making progress and getting into some very serious businesses. It is a confirmation of Aras differentiation strategy they started back in 2007 by moving from PLM SMB strategy to enterprise Open Source. At the same time, Aras probably not yet replaced PTC Windchill in one of their flagman accounts (if you know about one, please let me know).

So, what will happen next? Aras will keep hurting major PLM vendors and these vendors will push back. For how long? What can make a breakthrough for Aras to change the dynamic of large OEMs? Aras went shopping and started a process to acquire complementary businesses. Here is an example of Aras MRO acquisition. More to come… Aras platform, which is one of the strongest elements in Aras competition strategy can create a competitive set of functionalities to balance top 3 PLM vendors from selling more to their accounts. PLM vendors will use their dominant position within customer business and CAD functions will be hard to replace because these functions are essential for large OEMs and Aras doesn’t seem to plan any CAD acquisition yet based on comments from Aras’ Marc Lind.

What is my conclusion? The ability of Aras to knock out existing PLM from large OEM account can be a turning point in the continues process of competition between Aras and TeamCenter, Windchill and ENOVIA. But this process can be long and the standoff might be in interests of large PLM vendors with more capital and resources. Overlay can be an efficient way to expand Aras presence and lock large PLMs into their traditional PDM space. At the same time, Aras can be acquired by one of large PLM vendors if Aras investors will find a right deal. 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.