On January 15, 2007, Aras Corporation decided to offer its product lifecycle management (PLM) suite Aras Innovator® without asking for license fees. Three years later, the company remains the only enterprise open source player in the PLM arena. During the past year, I was able to know Aras Innovator better through briefings and demonstrations with Aras.
Company and Product Background
Formed in March of 2000 with global headquarters in Andover, Massachusetts (US), Aras provides companies with a suite of enterprise PLM applications. The Aras team is comprised of PLM industry veterans from some well-known PLM vendors.
Aras is a privately held company backed by institutional investors including Oak Investment Partners, Greylock Partners, and Matrix Partners. In 2009, despite global economic turmoil, Aras achieved record growth in global sales for the third year in a row with a 91 percent increase in new customer subscriptions.
Aras Innovator is an enterprise-wide PLM solution using a model-based service-oriented architecture (SOA) framework on the Microsoft platform. The company believes this solution architecture will help achieve more flexibility, capability, and scalability than any other PLM system on the market. The entire Aras Innovator suite of enterprise solutions is comprised of nearly 30 modules that allow different packaging configurations for different business needs such as product engineering, program management, and quality planning. Below is a list of the business process and data management functionality that Aras Innovator offers:
• Product structure management
• Bill of materials (BOM) management
• Product costing
• Item management
• Enterprise file and document management
• Revision and version control
• Life cycle state management
• Configuration management
• Engineering change management
• Graphical online workflows
• Approved vendor list/approved manufacturer list
• Supplier management
• Supplier collaboration
• Supplier qualification
• Program management with milestones and deliverables
• New product project portfolio dashboards
• Secure project collaboration workspaces
• Resource scheduling and tacking
• New product introduction (NPI)
• Advanced product quality planning (APQP)
• Failure mode and effects analysis (FMEA)
• Inspection and test control plans
• Corrective and preventive actions
• Deviations and waivers
• Manufacturing process management
• Mechanical computer-aided design (CAD) integrations: CATIA, NX, Pro/E, SolidWorks, Solid Edge, Inventor, AutoCAD, and others
• Electronic design automation (EDA) integrations: Allegro, Altium, OrCAD, PADS, DxDesigner/DxDatabook, Zuken, and others
Aras markets its solutions to companies in a wide range of industries primarily in the discrete manufacturing sector, including aerospace and defense, automotive, industrial equipment, high tech/electronics, consumer goods, and pharmaceutical/medical devices. The company’s PLM solution is currently used in 124 countries by companies of all sizes. Examples of Aras customers include Motorola, XEROX, Freudenberg, Desma, Hayes-Lemmerz, Lear, Basic Research, Lockheed Martin, L-3 Communications, Rolls-Royce, and the U.S. Army.
Switching to the no-software-license model was a bold move and it took the company a year and a half to fully plan the entire strategy to adapt to this way of operating as a business, commented Marc Lind, Senior Vice President, Global Marketing at Aras. Without the revenue from selling software licenses, Aras now relies on three revenue sources:
Subscription Services: service packages include security updates; certified versions; productivity utilities; upgrade services; and live support (click here for the comparison between subscription and free self-service)
Consulting Services: includes deployment methodology; solution implementation; system integration; data migration, etc.
Training Services: specialized for users; administrators; and developers.
Aras is benchmarking the processes and functionality scope of its solution against well-established enterprise-level PLM solutions. Although the removal of license fee allows Aras Innovator to compete with lower scale (thus lower cost) PLM and product data management (PDM) solutions targeting work groups and small and medium businesses (SMBs), Aras sets its target to compete with major PLM solutions such as Siemens Teamcenter, PTC Windchill, and Dassault Systèmes ENOVIA.
Many of Aras’ product strategies are derived from its enterprise open source business model. This model helps Aras expand its reach quickly in user base, partnership, and geographic coverage. It took the company almost seven years to acquire 30 customers since the business’s inception. After it changed the business model, Aras has been able to reach over 150 paying customers and roughly 1,400 corporate installations in the last three years. Another example of the expansion is partnership—as of writing this, Aras has 45 partners globally, eight times the number as it was three years ago.
Being an open source product also makes it easier for Aras to receive contributions from partners and the user community during product development. As Aras explained, most of its language packages are developed by Aras partners in different countries. Advanced users (i.e., corporate IT departments) are also helping Aras develop more functions and features. The Aras Corporate Community has uploaded dozens of add-on solutions for Aras Innovator including CAD integrations and new business solutions, for example, Lockheed Martin’s contribution of governance, risk and compliance (GRC) protocol, and Motorola’s contribution of earned value management and integration with Microsoft Project.
Another product strategy worth mentioning is Aras’ tight connection with Microsoft. Aras Innovator is a fully Microsoft-based product (the solution is developed on the Microsoft .NET platform and runs on Windows Server and Microsoft SQL Server). Aras also vigorously participates in building a tight relationship with Microsoft through certifications and other collaboration. As a Microsoft Gold Certified Partner with an independent software vendor (ISV) competency, Aras is a strategic provider and active member of the Microsoft partner community. Aras Innovator is the only enterprise PLM software suite to have ever achieved certifications on all of the Microsoft platform products.
In addition, I also see Aras’ efforts in addressing difficulties when implementing, maintaining, and upgrading PLM systems. Realizing that traditional product data management (PDM) systems were often implemented in silos, and that many PLM systems need expensive price tags to keep up with changing business requirements and enterprise information environment, one of Aras’ product development strategies is to increase its solution’s scalability, maintainability, and upgradeability. The latest product release Aras Innovator 9.2 further strengthens these features.
Being an enterprise open source product gives cost advantages to Aras Innovator users: no PLM license costs, no large capital expenditure to start, expanding with fixed cost, etc. However, no (or low) cost doesn’t guarantee a successful PLM solution. Hence, I feel it is better to put the open source aspect aside and look at Aras Innovator as a regular PLM solution, and below is what I found:
• Strong core PLM functionality: Based on Aras’ response to TEC's analysis model of PLM systems, I found that Aras Innovator scores very well with respect to the core PLM functionality needed in discrete industries—far above the industry average on many criteria in this sector.
• Broad functionality coverage: Besides core PLM functionality, Aras Innovator also covers a broad range of functionality under the comprehensive PLM umbrella.
• Model-based SOA application framework: As Aras claims, Aras Innovator is the only PLM solution suite powered by an advanced model-based SOA framework. By using this framework, Aras’ goal is to ensure that customers can deploy quickly and iteratively adapt their PLM environment to meet new competitive requirements in a fraction of the time required by conventional enterprise PLM/PDM systems.
• Early-bird in PLM analytics: As I discussed in Product, Project, Process, and People: The Four Ps of PLM Analytics, it is early for PLM users to seek for more insights from existing PLM data. Amongst the few PLM vendors that are actually providing PLM analytics capabilities, Aras is providing this capability through the collaboration with Microsoft on the CodePlex open source project named SharePoint PLM.
Due to the fact that managing CAD data was a high priority of PLM predecessors (e.g. engineering document management [EDM] and PDM), and, more recently, that PLM needs to work with other enterprise systems closely, PLM market shares are mainly held by big either CAD or enterprise resource planning (ERP) vendors. This leaves Aras, a sole PLM vendor without either CAD or ERP offerings, a narrow market space to grow. Although today’s technological advancements in product data visibility, exchange, and integration have made it easier to allow PLM systems to manage CAD data and to connect with ERP systems, the general perception that a competent PLM vendor should come from either the CAD or the ERP world won’t fade out quickly.
Being an exclusively Microsoft-based product may be another factor that keeps some potential customers away from adopting Aras Innovator. I’m sure that Aras has made extensive evaluation to ensure that Microsoft technologies meet the technical requirements of supporting its customers. However, I would argue that the elimination of other operating systems and databases will cost Aras opportunities—some organizations may want to further use the free perspective of open source by using open source operating systems and databases, and some may want to stay with their current non-Microsoft infrastructures.
For Aras, the most challenging aspect probably lies in the intricacy of maintaining the balance between its subscription and self-service offerings. Relying on subscription fees as a major revenue source, Aras has to make sure the differences between the two offerings are clearly stated and communicated. However, even though the self-service version doesn’t generate revenue directly, it is important for Aras to include enough value within this free offering.
Based on the functionality list provided by Aras, I can see clearly that the company intends to support a wide range of stakeholders through the product life cycle. I’d recommend Aras and the Aras community further this expansion to provide prepackaged solutions for more business processes in pre-design phases such as ideation, conception, and requirements management, and post-design phases such as service data management and product information management.
In the recent years there have been increases in requirements for embedding social product development in PLM offerings. I noticed that Aras implemented a strategy where it integrated PLM solutions with Microsoft SharePoint to include its existing Web 2.0 capabilities in a PLM environment. PLM vendors such as PTC and Siemens PLM are examples of adopting this approach. Considering the proximity between Aras and Microsoft, I’m expecting Aras Innovator to be the next solution to quickly incorporate social product development capabilities in its offerings.
In addition, I’d also recommend that Aras build more connections with other players such as database and ERP vendors in the open source community. This will bring Aras more opportunities to grow in the future.
Based on TEC’s software selection methodology, the fit between what a software solution is capable of and what your business requirements are is the first thing that’s measured during software selection. To organizations that are interested in Aras Innovator, I recommend the same principle. Even though the no-license-fee factor may play an important role in your selection process, I recommend you evaluate Aras functionality first because at the end of the day, it is the functionality of the solution that you select that supports your daily business, regardless of how much you paid for it.
If we consider the unique licensing model of Aras Innovator, there are a few scenarios where I see a fit between a business and Aras Innovator:
Enjoy the free meal: If you have a very limited budget but you want to have a PLM system in place, Aras Innovator is the solution that you may want to evaluate. Without paying for the license fee, you can fully deploy your limited financial resources on training or implementation services.
Grow without financial pressure: For organizations that want to roll out to a large number of PLM users, staying with Aras Innovator means you don’t have to worry about paying for PLM licenses for high user scenarios such as global product development, enterprise-wide engineering change, and new product program management. By paying a fixed subscription fee, Aras subscribers can remain current on the latest release without limitations on customizations or adding more users.
Build with more flexibility: User organizations with in-house development forces that are familiar with the Microsoft development environment can enjoy the flexibility of developing more functionality to meet their specific business requirements. In addition, contributing add-ons and enhancements to the user community also gets the advantage of others (including Aras), who may help improve the functionality developed in the first place.
If you are interested in knowing more about the capabilities of Aras Innovator, you can access its functionality report here, or compare Aras Innovator with other PLM solutions through TEC’s PLM Evaluation Center. You can also go to the company’s Web site and download the software to try and evaluate. Many other PLM solutions don't allow you to do this as conveniently.
So Far So Good
This is my overall impression on Aras Innovator since it switched to the enterprise open source model. Perhaps three years are not long enough for an enterprise solution to claim triumph, but at least Aras Innovator provides more diversity to the PLM industry. In my opinion, it is diversity that keeps the PLM ecosystem (vendors, users, and everything in between) growing.