Forgoing the hosted application route taken by many of its competitors, UGS Corp. rolled out a preconfigured and scaled-down version of its Teamcenter software suite along with an expanded partner strategy in an effort to make Product Lifecycle Management (PLM) more palatable to small manufacturers.
As part of the UGS Velocity Series portfolio, the new Teamcenter Express offers pre-configured workflows based on industry best practices culled from the Plano, TX vendor's years of experience deploying PLM to its large enterprise customers. The new offering is designed to help small- and mid-size manufacturers minimize the IT implementation and maintenance costs associated with PLM along with reducing the total cost of ownership of the complex enterprise system over the long haul.
Unlike other PLM vendors attempting to solve this problem by offering hosted or in some cases, pared-down versions of their software, UGS claims to be taking a different approach. "We're not providing a functionally handicapped version of our product, which does a limited amount of work," said Bill Carrelli, UGS' vice president of strategic marketing. "Mid-market companies have the same sophisticated requirements as larger companies, so we want to give them the functionality they need to do the job."
What Teamcenter Express lacks compared to the enterprise version, is the tool kit capabilities that allow a company to create highly customized workflows around their specific business processes. Instead, the new release offers prepackaged workflows around processes like change management or document management, which enable sophisticated operations without requiring complex deployment or customization tactics.
The workflows have been compiled as a result of years of work deploying PLM to large companies in all kinds of vertical markets, including automotive, electronics and high tech, as well as aerospace. Manufacturers simply need to follow the built-in templates, and they can be up and running in short order. Yet, as their businesses grow, the implementation can be scaled to full Teamcenter portfolio, if required, Carrelli noted.
UGS is in good company trying to make PLM more appealing to the SMB market. Other PLM vendors, including Agile Software Corp. (San Jose, CA), PTC (Needham, MA), and Arena Solutions Inc. (Menlo Park, CA), have released mid-market offerings designed to address these same issues, and for good reason. The PLM opportunity among SMBs is significant, according to analysts, because many of these companies face the same global sourcing, product customization, and regulatory requirement challenges of their larger brethren, but lack the IT resources and budgets to bring enterprise-quality PLM software to address them.
The mid-market (companies with between $30 million and $999 million in annual revenues) is the fastest growing segment in PLM, growing 12% annually, compared with the overall market average of 9%, according to AMR Research Inc. (Boston). Based on those figures, AMR estimates the mid-market opportunity for PLM will grow from $3.8 billion in 2004 to $6.4 billion in 2009, and UGS officials maintain the potential is even larger if you factor in revenue from services.
The sweet spot for UGS in all this is with companies that have between 50 to 200 engineers, Carrelli said. UGS' Velocity Series solution is also well suited for companies with complex design environments, which need to deal with a growing amount of 3D data. "One of the differentiators is what kind of PLM do you need," explained Mike Burkett, research director for PLM, at AMR. "If you're looking to manage your design processes where CAD is an important component, UGS brings some things to the table that the others don't."
Teamcenter Express can be used with UGS' Solid Edge 3D application and its Femap computer-aided engineering analysis tool, both part of the Velocity Series, as well as with other leading CAD applications through its "Open by Design" strategy and its support of standard electronic data exchange and visualization formats, the company said.
Along with the software, another key component of UGS' mid-market strategy is a revamped and expanded Global Channel Program. As part of its new push, UGS plans to grow its partner capacity by 50% by the end of 2006, the goal being to provide SMBs with much-needed, local handholding.
That kind of local touch is essential, AMR's Burkett pointed out. "The challenge with smaller companies is that they feel like a small fish dealing with a company like UGS, who deals with large players like Ford," he explained. "They feel like they'll get better service with a local provider, who wants to cater to its customer base, and who might have specific skill sets around certain verticals."