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EDS PLM Solutions: Delivering on its Potential

July 15, 2002

By MARTYN DAY, editor, CAD Server

In its annual address to the press and industry analysts, EDS PLM Solutions gave an update on its organization, its product and marketing strategy, on what's happened over the previous year, and where this year's development focus will be.

Since UGS convinced its corporate giant owner, EDS to stump up $1billion to merge with competitor SDRC and buy back its outstanding stock last May, it’s certainly been a roller-coaster ride for the renamed EDS PLM Solutions division of EDS. Not only did the company have to cope with being swallowed by a massive $21billion corporation, and adopt its ways, but it also had to contend with mapping two totally different technology organizations, each with a plethora of applications and various programming, marketing and sales teams.

To take on that size of task and maintain velocity within the market would seem impossible. EDS PLM Solutions’ competitors thought they’d pick up on the inevitable slow down that the company would undergo as it restructured its global operations and rewired its core technologies.

This year’s EDS analyst briefing was held at EDS’ impressive corporate HQ in Plano Texas. The EDS campus is vast and we were invited to see the nerve center, a huge windowless control room from where EDS manages its global IT network. It's not unlike something out of a James Bond Movie or NASA, with a multitude of huge screens displaying global maps and live telemetric data on network server and bandwidth status. All this reinforced that EDS is big, very big. On campus, in another windowless room, EDS PLM Solutions' CEO, Tony Affuso, together with key EDS PLM Solutions executives, laid out the company’s plan and, I have to say, put on an impressive performance.

The first port of call was to outline EDS. EDS stands for Electronic Data Systems. The company is a corporate giant in the same vein as IBM. Initiated in 1962, the company turned over $21.5 billion last year from its multitude of services-based businesses. Prior to the creation of EDS PLM Solutions division, there were three other divisions:

  • Operations Solutions - Integrates IT outsourcing services with business process outsourcing to help clients align technology and operations with business strategy.
  • Solutions Consulting - Combines electronic business and solutions consulting offerings with applications services to enhance performance in the digital economy.
  • A.T. Kearney - Management consulting, addresses CEO-level concerns through strategy, organization, operations, IT and executive search services.

And now of course EDS has a fourth line of business, EDS PLM Solutions, offering a Product Lifecycle Management (PLM) portfolio including product development, manufacturing planning, product data management and collaborative commerce offerings supported by product-driven services.

The breakdown of market areas (by revenue) that the global EDS company addresses is: 25% manufacturing, 21% government,16% financial,11% commercial. Affuso put forward the argument that the level of coverage, in both depth and width, together with EDS PLM Solutions product and services offer unrivalled levels of synergy. Specifically mentioning EDS' consultancy arm, AT Kearney, Affuso said that they would be delivering offerings, around the "launching products’. Also as some of EDS PLM Solutions' traditional customers clients want to outsource their infrastructure, they will able to bring in EDS and its expertise and global reach.

While the announcement to merge UGS and SDRC was made last May, the company’s first day of business wasn’t until 1st October last year. According to Affuso, the combination of UGS and SDRC has created the industry’s number 1 or number 2 player, "by nearly any measure’. In terms of revenue Affuso predicted that EDS PLM Solutions would realize revenues of up to $1.1 billion this year, representing a 7 to 9 % growth. Like the rest of the industry, the software demand has been "a bit soft." Affuso blamed the aftermath of Sept 11th and the general slow-down in the manufacturing marketplace. The CEO stated that there was "a general feeling by manufacturing companies that they want to wait before they spend." Affuso was quick to state that they had no order "cancels" or erosion from competitors, just delay in users decisions.

EDS PLM Solutions claims 1.8 million seats in operation everyday, in over 24,000 customer organizations. According to Affuso this accounts for at least 35% of the world’s 3D digital product data. The new company has 5,500 employees in 140 offices across the globe, together with 17 R&D centers around the globe, with an impressive yearly development budget of $200 million for research and development alone. While many thought the SDRC/UGS merger was more of a take over from the UGS side, Affuso points out that the leadership of the new company is a 50/50 split between UGS and SDRC executives.

Affuso listed the number of seats EDS PLM Solutions has in specific design areas, and it made for interesting reading:

  • Digital product design - 245,000 seats
  • Digital simulation - 36,000 seats
  • Digital Manufacturing – 31,000 seats
  • Digital collaboration – 830,000 seats
  • PLM Open – Parasolid, PLM integrator and
  • PLM Viz – 683,000 (this figure doesn’t count MCAD products based on top of Parasolid, such as Dassault’s SolidWorks).

In addition to this, Parasolid claims to have nearly another million seats outside of the EDS PLM Solutions product range. All of course creating data for the digital pipeline that the EDS PLM Solutions’ products can easily interoperate with.

In the "we are doing really well, honest’, part of his presentation, Affuso said of the $250 million dollars per quarter that the company was billing, there were a number of "over a million" deals. In the last six months, big purchasers have been Isuzu, Fiat, Rolls Royce and Siemens.

Looking at the Global 500, Affuso took pride in the fact that 9 out of the 9 aerospace and defense companies were customers. Similarly, 9/9 in general manufacturing, 24/54 in hi-tech, 5/5 machine and equipment, 10/14 for consumer products and an impressive 28/28 global players in automotive were all using EDS PLM Solutions’ products and services.

Ford Defection Not Likely

On that Automotive note, some not so good news. When UGS was eyeing up the SDRC merger, SDRC’s jewel in the customer-base was automotive giant, Ford, who used I-DEAS and Metaphase. Since the merger a lot of rumors have come out about what Ford is doing with their technology strategy. Indeed, here at MCAD we had picked up through independent suppliers that Ford was looking for CATIA trainers and engineers.

Affuso then dropped the bombshell, “We are in very well at Ford, they have over 50,000 seats of our technology all across the globe and we continue to work with them. The day before we announced the SDRC/UGS merger, we called up Ford CEO Jack Nasser and told him what we were about to do and wanted his support and involvement, and he said 'We like the idea that SDRC will be bought by a friendly face but we are going to go to a multi-CAD environment. We have been using some (different vendor) CAD at Volvo car, Land Rover that was the CATIA brand and what we want in the future is have those interoperate. So what we would like you to do is to work with us to develop interoperability between a few different CAD environments,' and we agreed to do that. So you will hear stories about Ford over time, about what they are doing and how they are doing it, but we are solid in Ford and you will see them use some other environments and we have agreed to interoperate with that.”

Whichever way you look at it, this must be a big disappointment for EDS PLM Solutions. From the onset, the company was obviously working hard to convince Ford that its product strategy or merging Unigraphics and SDRC would benefit their use of CAD, however CATIA is impressive and it’s available now. One wonders just how mixed the CEO of Ford wants his CAD systems to be and if this interoperability requirement is a way to get data out of SDRC and into CATIA? Ford’s reliance on Metaphase, having 50,000 seats plus, is probably worth EDS PLM Solutions’ while. However, you can be assured that Dassault Systemes and IBM PLM division will be working hard on Ford to sell them their spin on PLM, together with the DELMIA and ENOVIA solution suites to leverage CATIA data. Mentioning this EDS PLM Solutions announcement certainly surprised my IBM contacts, which knew of Ford’s decision but were duty bound to make no comment on the "win."

Key Focus

Affuso highlighted EDS PLM Solutions’ direction as investing in the development of tools to enable companies to digitally transform their product lifecycle. This is the ability to take the digital data that’s created in the CAD system and move it through the whole cycle, outside of engineering and use it in other places within the enterprise: bill of materials, product structure etc., and have it interoperate, feed and work with other processes through the product cycle. Affuso stated, “Our focus and investment is PLM. Looking at CRM/SCM/ERP our focus will be interoperability, developing open software in the 3D space, that interoperates well with those other processes.

“We are working to understand our customers product lifecycle, understanding where it is they want to minimize cost early up front and understand where it is that they want to maximize return and profit. We are all about helping them change that curve. We can aid rapid product introduction, enable firms to reach the market before its peak. By simulating the factory upfront, integrating customers, performing feasibility studies, reducing physical prototypes, enabling designers to work in a flexible digital environment for longer before they make a decision to build a physical prototype, allowing configuration analysis, reducing warranty costs and digitizing service and repair - these are areas where we can help our customers be more competitive.”

In Development

To enable this PLM vision, EDS PLM Solutions is developing in four key areas:

  1. Digital authoring tools for the product lifecycle.
  2. Digital backbone.
  3. Adaptability and openness.
  4. Scale of solution.

The respective EDS products that are key in these areas are:

  1. Unigraphics NX (stands for next generation) will be the future authoring tool for the company.
  2. TeamCenter - A new "product’, which is the digital backbone for the business.
  3. PLM XML - is an open standard for adaptability.
  4. PLM integrator - for integrating with enterprise environments.

Affuso described NX, “NX is our new architecture and foundation for enabling unification of the Unigraphics and the IDEAS technologies. You will see these come together and merge into one offering called NX and we are beginning to implement this on both sides, we are putting pieces of NX into Unigraphics and into IDEAS, so in the next 24 months you will see this come together. There will also be a new common user interface.”

While the first release of NX won’t be available till mid-year, there was a product demonstration on the new interface and technology. It was an impressive demonstration, with an extremely well thought-out user interface, together with some exceptional functionality. One new capability, the ability to model without features, looked to be even better than CoCreate’s SolidDesigner – one of the few applications on the market that as this capability. We will look at NX in more depth next issue.

TeamCenter may be a small word to say but its meaning and relevance to EDS PLM Solutions runs deep. These PLM vendors have had a tough time rationalizing their PLM product portfolios as they are typically made up of many, many components. TeamCenter is EDS’ term for the collective products that make up its PLM offering. The concept here is that there will be a common set of system services, a set of internal and shared services, working seamlessly with technology like knowledge fusion, visualization and collaboration utilities etc. On top of that Unigraphics, I-DEAS and NX applications work creating PLM models, which all work through a new common User Interface.

Most of the functionality of TeamCenter comes from previously branded products. As a rough guide here is a translation table: TeamCenter has 8 modules to it :

  • TeamCenter Enterprise – (was Metaphase)
  • TeamCenter Engineering- (was IMAN)
  • TeamCenter Project – (was Enovi)
  • TeamCenter Requirements – (was Slate)
  • TeamCenter Visualization – (was Viz)
  • TeamCenter Manufacturing – (was IMAN)
  • TeamCenter Integrator
  • TeamCenter Community – (was e-Viz)

According to Affuso, TeamCenter, despite being in existence only a matter of months, is the largest installed system in the market with over 830,000 seats being used in production to date. This of course is the total of seats sold while the applications were under their former guises. Still, I have to agree that this is an impressive number, even if derived by combination.

PLMopen is the opening up of EDS’ PLM technology so others can build on it. EDS PLM Solutions claims the high-ground in openness, citing the opening up of Parasolid to competitors, customers and partners. Affuso stated that “We have a ‘level playing field’ licensing policy where we shared releases with everyone at the same time and we now carry that forward with PLMopen. We have also introduced PLMviz which opens up the JT file format, so anyone can build an application on it and we also utilize PLMXML.” In an industry where much lip service is paid to Interoperability, it is obvious that some moves have been made by the key players to improve the problems of data portability, although there’s still a mountain to climb. With competition heating up for the big clients, one wonders how fairly EDS PLM Solutions and Dassault Systemes will play. EDS has recently announced technology-openness deals with PTC and Autodesk but little between its European competitor.

PLM integrator is how EDS PLM Solutions gets everything outside of its product range to talk to its TeamCenter line (which EDS representatives commonly refer to as a stack) and having services integrate with SAP, Oracle, Peoplesoft, together with adapters for internal legacy systems, Webservers and other vendor’s backbones.

It ain’t easy

Summing up PLM and taking the PLM pill, Affuso sounded not unlike a pharmaceutical leaflet accompanying a remedy:

“It isn’t easy – PLM is not for the faint of heart. Making all that work doesn’t happen by magic, it takes a lot of work, there’s skill requirements, investment, incentive, resources, planning and vision to complete. If you miss any one of these there’s a problem and can lead to confusion, anxiety, frustration, false start. “ Perhaps, one should add, if symptoms persist, seek medical advice!

Affuso summed up the EDS PLM Solutions offering: “So as we get into these projects and work with our clientele, we are very focused on the end state. By coming together with EDS, the ability to bring in specialists such as AT Kearney, our software, the expertise of solutions consulting at EDS, we can reduce the risk to the customer and provides a one source PLM.”

Conclusion

The core theme for this year’s event was, despite all the complications and business backdrop, the "merger is on track" and EDS PLM Solutions is moving forward. There has been a lot of product shuffling and re-branding but this will hopefully ease understanding of the company’s offerings once we become more familiar with the new titles.

While it’s obvious that the core platform is UG with added SDRC know-how, EDS PLM Solutions hasn’t canned I-DEAS and continues to develop its functionality as well as create NX, which promises to be an exciting hybrid of UG and I-DEAS. All this work is under the control of the industry respected CTO, and head of PLM at EDS PLM Solutions, Chuck Grindstaff. From what I saw, EDS PLM Solutions" authoring tools are in safe hands and NX will be a worthy contender to Dassault’s exceptional CATIA V5, as well as offering some unique capabilities.

As for the PLM part of the equation, lumping everything else under the TeamCenter banner, unfortunately makes it no easier to understand what’s under the hood, just easier to form shorter marketing sentences – something I am sure I will hear a lot more about in the coming months. The new user interface of NX that’s shared within the TeamCenter products may ease integration issues by giving the PLM applications a highly necessary seamless fit.

I will leave the last word to Tony Affuso, “We have brought our companies together, announced, the merger last May, completed it in October. We got the team re-organized, the product line is re-situations, our new marketing program is together and we are in the market very aggressively, we see the pipeline increase and we expect continued growth in our business in 2002, 2003 and beyond.”

www.eds.com/plm.

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