May 29, 2013 a.m. The official announcement/conference call with Dassault and Apriso on their merger was an interesting discussion about the deal. Beyond the tedious financial analysts who are drilling into the significance of the merger on Dassault’s earnings, this deal has important and exciting implications for the manufacturing and design (Product Lifecycle Management — PLM) functions in the enterprise.
CEO Bernard Charlès of Dassault stated, “We are entering a new area of global manufacturing operations management,” which may be a $1B market opportunity for the combined company. Acquiring Apriso’s world-class manufacturing MES capabilities expands their footprint from design to the plant floor and across the enterprise, since manufacturing applications touch so many other functions such as compliance and logistics.
Key reasons for the deal:
1. Apriso is a world-class MES system and there aren’t many of those around anymore. The manufacturing-equipment players often sell software along with their services and equipment. And SAP, Epicor, and others have made purchases over the years that have reduced the pure plays in the market.
My feeling is although Apriso was good at getting big deals, being an even bigger company is a good thing for the largest international companies. It gives them access to more companies and more resources to compete in long-term global sales cycles. However, Dassault has not left the midmarket behind, so their market potential is now larger globally and in terms of company size.
2. Apriso has an impressive customer base of mega-manufacturers. And they have done a good job competing against the equipment players. I would expect that to continue, since this is still a ‘software company’ versus being wedded to equipment infrastructure. Many end-users like the equipment and software independence because it gives them more flexibility in implementation as well as in ripping things out, if needed. Also, many large firms have different equipment in their plants.
3. Clearly the design-to-manufacturing process can use some help — integrating from design and suppliers into manufacturing activities for a better product launch, product traceability, for example.
And there is more potential beyond straight PLM.
PLM Market
Contrast this deal with deal that PTC (also in the design/PLM space) did with Servigistics last year for Service Lifecycle Management, also a critical linkage to design. The combined capabilities support needed processes and data integration for the Total Product Lifecycle Management view (TPLM).
Dassault and PTC also have some supplier management and sourcing solutions, which makes sense, to provide the technical capability for their customers to acquire suppliers, manage partners and then collaborate on the actual design work. So this also makes one wonder what additional acquisitions or product enhancements will be coming from these mega-players in a TPLM market.
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