Today’s announcement is not anti-Catia but pro-Teamcenter.

Today Siemens PLM announces that Daimler AG, best known for their Mercedes automobiles, has decided to standardize on NX from Siemens PLM as its “new platform for worldwide car and truck development.” Until now Daimler has been using primarily Catia, from Dassault Systèmes.

Both Siemens PLM and the cadre of press and analysts who follow the industry are hailing this as major transition point in the PLM market. I beg to differ.

This is not an anti-Dassault Systèmes decision regarding either Catia V6 or Enovia V6; it is a pro-Teamcenter decision. Like the Chrysler decision earlier this year, the deal is more proof manufacturers are making their engineering IT buying decisions based on the data management software as the IT backbone, not the CAD system.

For years Daimler has been using a customized version of Siemens PLM’s Teamcenter software for data management. When it came time to upgrade engineering software, Daimler had real four choices:

Teamcenter + Catia V6: The first choice was to stay with their existing, heavily customized Teamcenter installation and make Catia V6 work with it. This would be possible but expensive, with the extra baggage of constant vendor culture clash under their roof.

PTC Windchill: The second choice was to switch to PTC Windchill for data management. It is a fine system with many happy customers. This would have been an expensive, drastic move, taking them out of the mainstream in automotive IT. And again the vendor culture clash would be an issue.

Dassault V6: The third choice would be to throw out their existing heavily customized version of Teamcenter and standardize on the Dassault V6 platform with Catia and Enovia. This would give them cutting edge technology, but they would pay a high price in both primary and secondary costs. The primary costs would be the software purchases; the secondary costs would be in installation, translation, maintenance, and training. The costs would be unreasonably expensive no matter how much pro-Catia sentiment Daimler’s engineers might have.

Teamcenter + NX: The fourth choice would be to stay with the existing Teamcenter installation and switch CAD tools from Catia to NX. This is the easiest and least expensive transition of the four possibilities.

If Daimler had been using a completely home-grown data management solution, or one of the legacy PLM solutions from Dassault (Enovia VPM, Enovia LCA, or SmarTeam), this might have gone in Dassault’s favor. As far as I’m concerned, the fix was in, so to speak, from the beginning. Once Daimler decided to stick with Teamcenter, the decision became “What CAD and other engineering tools will work best with it?” For CAD, the answer is NX 6, not Catia V6.

No PLM vendor comes close to the number of seats Siemens has with Teamcenter (over 5 million), so anytime a manufacturer decides to modernize engineering IT, the first decision will be “do we keep Teamcenter or not.” Once that decision is made, it sets a domino effect into place regarding CAD, digital markup, and all the other engineering tools.

Bragging rights or growth markets

All the MCAD/PLM vendors want the major automotive manufacturers as their customers, for both the bragging rights and the additional sales to the supply chain. But automotive is not the big story in the next few years for PLM. Recently PTC disclosed to business analysts information on their current competitive campaigns. They listed the number of targeted customers by existing PLM platforms. “In-house or home-grown” was in second place, with Siemens PLM the only vendor with more installations in the PTC cross-hairs.

Real market growth is not coming from a few large vendors who have been using PLM for years, but from the thousands of smaller manufacturers who will leap-frog from a “PLM system” based on AutoCAD, Excel, email, and Windows Explorer to state-of-the-art engineering IT. This larger market is wide-open.

Update: Dassault Systèmes replies

A few hours after the Siemens PLM/Daimler AG press release, Dassault Systèmes issued a short statement. Highlights:

• “This decision came as a surprise to Dassault Systèmes as no Catia V6 evaluation has been performed by Daimler.”
• “We were informed by Daimler AG that, as CAD application portfolio was not their priority, its decision was based upon CAD integration in its home grown PDM system ‘Smaragd’. “

Dassault adds in September 2010 Daimler renewed its Catia contract for five years, and that Daimler is also a user of products in the Delmia, Enovia, Simulia, and 3DVIA brand portfolios. “At this stage, we have no information as to which CATIA specialized applications would be replaced and which ones will have to remain in use.”