In a well-established upper-range product lifecycle management (PLM) market total platform replacements are a rare occurrence. Brazil-based Embraer, one of the world’s largest aircraft manufacturers, has recently selected PTC’s Windchill PLM technology solutions to “help bring new innovative aircraft to market faster, more efficiently, and with the highest levels of quality.” With the switch from its legacy PLM provider to PTC, Embraer says that it is preparing for an expected increase in demand for new aircraft in the next few years.
Embraer’s objective in the overhaul is to modernize its technology infrastructure and business processes in order to meet accelerated delivery schedules while maintaining the company’s commitment to quality and safety. Embraer’s enterprise resource planning (ERP) platform is SAP, and while the company did attempt in the past to use the SAP PLM suite, it was not up to scratch for Embraer’s needs. Perhaps the latest SAP PLM 7.x series could have stepped up to the plate, but that would have required the ERP platform’s upgrade too, which Embraer reportedly wasn’t ready for at the time.
Dealing in a Multi-Vendor World
Embraer then realized that a “one-stop shop” or “having all one’s eggs in one basket” strategy can come with negative aspects too. Given that the company’s computer aided design (CAD) platform is CATIA V5 and its computer aided manufacturing (CAM)/digital manufacturing platform is DELMIA, both Dasault Systemes brands, the initial instinct was to give ENOVIA PLM a shot. But ENOVIA is not the PLM market share leader, neither overall nor in the aviation segment (especially not ENOVIA V5, with its flavors from various acquisitions such as MatrixOne, SmarTeam, etc.), and Embraer did not want to again get overly dependent on a particular software vendor. There are also indications that Dassault Systemes strongly prefers that most of its users switch to the V6 platform (where both CAD and PLM are on a new object-based architecture). There is not a great migration path from file-based CATIA V5’s architecture to V6, while ENOVIA V6 doesn’t do a very good job of managing CATIA V5 data, which often results in performance issues.
Central to Embraer’s ability to achieve the aforementioned goals is the choice of a new PLM backbone system that offers the broadest set of capabilities. After an exhaustive review of leading PLM technology providers, Embraer chose PTC as its partner of record for its entire global aircraft development program—commercial, executive, and defense. With SAP PLM and ENOVIA out of the picture, this meant that Embraer would likely go with PTC Windchill, Siemens Teamcenter, or Aras Inventor (Oracle’s Agile PLM cannot handle V5 data well either, and is not the major aviation industry player anyway, while Autodesk’s cloud PLM platform is still maturing and is not yet established at large manufacturing companies). Since Aras was never seriously considered (due to its limited market presence and partner network in Brazil), it was down to a shootout between Windchill and Teamcenter. It sounds like PTC won the day, even though the customer seemed to have a bias towards Teamcenter at some stage, and this market is Teamcenter’s sweet spot.
The party line is that Windchill demonstrated wide functionality and flexible parameterization to avoid costly customization, open and easy interfacing allowing integration into a heterogeneous environment, an intuitive user interface (UI), and a flexible licensing and support model with balanced intellectual property protection minimizing the total cost of ownership (TCO). I am pretty sure that Siemens PLM Software will privately take exception to this rationale. While Windchill might give a better appearance of an integrated solution with its configuration capabilities, it is still complex and costly to configure. Teamcenter, ENOVIA, and Windchill are all designed more with a toolset/infrastructure in mind than a native applications-oriented design. The bottom line is that users can do almost anything they want with their upper-range PLM platform, but the TCO and implementation costs will be higher.
What Does This Mean for the PLM Space?
In any case, Embraer’s selection of PTC’s Windchill PLM solution (together with PTC’s recent win at Eurocopter) also validates, and further extends, PTC’s position as a leading PLM technology solution provider for the aerospace and defense (A&D) industry. For PTC, which currently has customers, partners, and facilities in Brazil and Mexico, this deal marks an important expansion of the company’s business across Latin America. While this loss is not pleasant for Dassault Systemes, it somehow probably did not come as a surprise, and the company is still one of the major suppliers for Embraer when it comes to CAD and CAM. The worst Siemens PLM Software might be suffering from is a bruised ego, given PTC’s recent rise and bragging rights in this sector.
But the large CAD/PLM vendors should be wary of a similar scenario playing out all over the world for several years to come. The primary reason companies replace their PLM platform is that their current deployment model has failed. It is usually a combination of an inability to deploy/get adoption, which results from unsuccessful customization efforts, poor performance/scalability, and usability issues. At the end of the day, when users cannot work with their product data management (PDM)/PLM system they ironically work around it in Microsoft Excel or other pedestrian methods until a more useful PDM/PLM system comes their way.
Related TEC material
Siemens Teamcenter Going to the PLM Cloud (Oct 2012)
Has SAP Become a PLM Factor to Be Reckoned With? (June 2011)