Window of opportunity: Open-source PLM vendor says economic winds are blowing customers its way

The Aras Innovator software suite is built as a platform for collaborating around product data. Aras turned the suite, which runs on the Microsoft technology stack, into an open-source solution in April 2007. That means anyone can download the solution for free and distribute to an unlimited number of people within a company.
By Manufacturing Business Technology Staff November 25, 2008

Aras Corp ., which offers product life-cycle management (PLM) software under an open-source licensing model, says the current economic downtown appears to be generating greater interest in Aras solutions.
“We have been experiencing roughly 70 percent growth [in the number of software downloads] since the beginning of this year,” Peter Schroer, president of Aras, said in a recent interview with Manufacturing Business Technology. “Companies are discovering this is a very cost-effective model.”
The Aras Innovator software suite is built as a platform for collaborating around product data. Aras turned the suite, which runs on the Microsoft technology stack, into an open-source solution in April 2007. That means anyone can download the solution for free and distribute to an unlimited number of people within a company.
The traditional model for adopting PLM software—and most other business applications—is to purchase a license for each person who will use the system.
Schroer argues that the traditional named user license model prohibits companies from gaining the full benefits of collaboration because economics force them to limit the number of people who have access to PLM systems.
Under the open-source model, which offers an unlimited number of licenses, he says, “Everybody can participate in the process.”
Schroer says the number of people downloading the open-source version of Innovator has been 10 times what he expected. He also says the characteristics of the people downloading the system have changed since the beginning of the year.
“Initially, most of the people downloading the system were from companies that had no PLM system in place,” he says. “Now we’re seeing experienced PLM users as well as people from larger companies.”
Schroer contends economics are driving these trends. “When talking about spending a half-million dollars or more on software licenses before you have even implemented the software and determined if it actually solves your problems, the risk profile is wrong,” he says, “especially in a down economy.”
While the number of people downloading Innovator may be up 70 percent, that doesn’t necessarily mean Aras revenues are increasing at the same rate. While its software is free, Aras makes money by selling implementation, maintenance, and consulting services.
Schroer estimates 25 percent of the people who download Innovator install on a company server, and 50 percent of organizations that are using the software have a service contract with Aras.
If current trends continue, Schoer says, Aras will do just fine.