Dassault Systèmes to Acquire IBM PLM: Big News, but Not a Big Surprise

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A few months ago while I was listening to Dassault Systèmes (DS) executives explaining the company’s sales and marketing strategies and achievements, I wondered what the next move might be since I found the relationship between DS and IBM was becoming more delicate than before. My concern was that a very sophisticated approach would be required in order to grow DS’s own sales capability, while keeping the strong and long-time DS/IBM partnership in good shape. Here’s the answer to my question: a press release from DS on October 26 tells us that “Dassault Systèmes and IBM Announce Intent to Integrate IBM PLM Sales Operation into DS.”

To people not familiar with the DS/IBM relationship, let me explain a little bit. IBM has always been DS’s strongest business partner in sales and support, starting from the very beginning of the latter’s existence in 1981. In fact, there was a long period of time that IBM was responsible for all of DS’s sales, and the IBM Product Lifecycle Management (PLM) unit focused on DS PLM products only. To me, this acquisition sounds like the company is trying to bring once-outsourced business processes back under its own roof.

DS has been considered a technology enthusiast by the PLM community for a long time. The company usually spends about a quarter of its total revenues on research and development (R&D). Recent years have seen the company putting more effort into sales. To me, it makes perfect sense to do so, since moving closer to customers brings substantial benefits to companies like DS. As PLM advocates usually say that you should include all your product stakeholders in the loop when developing products, DS, as a PLM vendor, is now going to further practice this principle in developing its own products.

Low presence in enterprise applications sometimes shows up in SWOT analysis when there is a need to evaluate different collaborative Product Definition management (cPDm) vendors. Although DS’s acquisition of MatrixOne as well as its new strategy with ENOVIA V6  are helping the company expand its footprint in business process- and transaction-oriented application areas, I believe that DS wants more slices of this pie and that the coming acquisition will help.

As I see it, the biggest keyword of this acquisition is “simplicity.” This can be interpreted in two ways: for PLM users, there will be a single interface dealing with both the software and (at the same time) service provider, and a single pricing package; for DS, my concern as expressed in the beginning is going to disappear, since the two sales forces will be under the same roof.

Generally speaking, there were good reasons for all acquisitions when the deals were made; however, many deals failed to reach the goals as planned. The DS/IBM PLM deal does look more convincing and promising than the average acquisition, but post-acquisition activities will still be somewhat challenging. When two people have gotten along very well for quite a while and finally decide to enter into a marriage, everyone feels this is a happy ending. However, only the two parties involved know that this is just the beginning of a new journey—there are still lots of things to work out.
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