The right move: Siemens PLM achieves strong first-year gains

Siemens’ $3.5-billion acquisition of UGS in May 2007 was viewed by some as a potential reordering of the product life-cycle management (PLM) market. At the same time, it raised speculation about how well the newly created Siemens PLM software unit would fair inside a traditional industrial hardware company. One year later, consensus at the recent Siemens PLM media and analyst briefing, held in Boston May 20-21, strongly validated the move.
By Frank O Smith, senior contributing editor June 9, 2008

Siemens ’ $3.5-billion acquisition of UGS in May 2007 was viewed by some as a potential reordering of the product life-cycle management (PLM) market. At the same time, it raised speculation about how well the newly created Siemens PLM software unit would fair inside a traditional industrial hardware company.
One year later, consensus at the recent Siemens PLM media and analyst briefing, held in Boston May 20-21, strongly validated the move.
“There was speculation last year whether the organization can survive within Siemens,” said Anton Huber, CEO of Siemens’ new Industry Automation Division, at the media event. Realignment within Siemens corporate to bring sharper focus to its growing software applications business also was validated by the performance of the division over the last year—reportedly adding 4,000-plus new PLM customers; and by a series of product announcements showcasing what the synergy has wrought.
“We made in one year the money that we paid for UGS,” Huber said, speaking of bottom-line performance.
Huber said synergy could be measured in major new deals during the year, notably citing Volkswagen standardizing globally across all its brands—Volkswagen, Audi, Lamborghini, Bentley, Bugatti, et.al.—on Siemens PLM as “a very key win.” Dr. Oliver Riedel, who spearheaded the initiative at Volkswagen, told attendees that Siemens’ strength and long-term vision in acquiring UGS was what turned the deal to the new PLM unit.
Siemens marked the May briefing with announcements of major enhancements to its NX 6 and Solid Edge CAD suites, particularly spotlighting the impressive power of Synchronous Technology, which combines the speed and flexibility of direct feature-based modeling with the precision of constraint-based parametric design through intelligent inference problem-solving.
The vendor also delivered on the promise of Project Archimedes, which was outlined soon after the acquisition. The project was intent on setting direction for how Siemens would leverage the UGS acquisition through synergy with its PLC/CNC hardware business, moving digital manufacturing—the blending of the virtual with physical—from concept to reality. The benefit to customers, Huber said, “is significant reduction in time-to-market. We think we have all the ingredients to have the fastest in the industry.”

Anton Huber Anton Huber, CEO of Siemens’ new Industry Automation Division, says realignment within Siemens corporate to bring sharper focus to its growing software applications business has been validated by the performance of the division over the last year: reportedly adding 4,000-plus new PLM customers.

High-fidelity machining—one of the leading use cases identified within Project Archimedes—combines error-free CNC programming in the virtual domain coupled with guaranteed collision-free machining in the physical. Index, a German manufacturer of multiple-function CNC machines for complex products, reported an 80-percent to 90-percent reduction in time to program new setups with virtual CAM-CNC integration for optimized performance.
Cory Goulden, CAD administrator for National Steel Car , an Ontario-based rail car manufacturer and Solid Edge user, calls Synchronous Technology revolutionary. “We now have the ability to skip several iterations and move right to production,” says Goulden.
Siemens also gave considerable time at the briefing to highlighting its development road map across its full suite of products, with complete migration to its new unified architecture in Teamcenter, its comprehensive application data backbone, slated for 2009.
Dr. Riedel of Volkswagen affirmed from an end-user perspective the progress he’s seen the company achieve over the last year: “One year later, the decision to go with Siemens PLM is still absolutely the right one.”— Frank O Smith , senior contributing editor (fosmith@thewritinggroup.com)