Managing Automation - October 2008 - (Page 28)

[ SPECIAL REPORT ] report When Helmuth Ludwig was brought in as president of Siemens PLM Software in summer 2007, he shifted the focus toward the software sell, which has a very different licensing structure and maintenance and service business model than hardware. Part of the exercise was to create account maps to find out how both organizations were addressing customers and where the crosssell opportunity would be. “We would talk about the businesses and which customers were important, and at the end of the meeting the Siemens PLM guy would write down two customers he believed the automation side could help, and the automation guy would write down two customers where Siemens PLM could help,” Ludwig says. In addition to helping existing customers, the new combination appealed to new customers. Volkswagen Group had benchmarked a number of PLM offerings and had identified Teamcenter as fitting with the company’s long-term strategy. UGS’ financial stability, however, was in question at the time, said Oliver Riedel, Volkswagen’s director of process integration and information management, during a presentation at Siemens PLM Software’s industry analyst event last May. The Siemens acquisition sealed the deal. “Siemens had been a strategic partner in manufacturing,” Riedel said. “And it was their acquisition of UGS that swayed us toward making the Teamcenter decision.” While there were mixed reactions from customers when the acquisition was announced, “all of our customers were positive about one aspect for sure, that UGS SIEMENS AND UGS: would not be in a bad position fiA PICTURE OF HEALTH nancially,” Carrelli says. Since Siemens’ acquisition of UGS in May 2007, the The next question became: company has been growing at a healthy clip — from employees, to customers, to revenue. What will this mean in the future? Many customers thought In the most recent 12 months (July 2007 Siemens would slow down the softthrough June 2008): ware business, Ludwig admits. But ● NX license revenue grew 13%. it has actually had the opposite ef● Tecnomatix (Mechanical) license revenue fect. The delivery of the synchrogrew 28%. nous technology is a perfect ex● Teamcenter total revenue grew 15%. ample. “We have put more money ● New versions of NX, Teamcenter, Tecnomatix, into R&D, and that made it possiVelocity product lines were delivered. ble to speed up the release [of the ● Customers grew from 47,000 to 51,000. technology],” Ludwig says. ● Seats grew from 4.3 million to 5.5 million. Indeed, some say Siemens is breathing new life into UGS, and ● Teamcenter achieved another leadership milethey compare the atmosphere stone with delivery of 4 million seats, continuing to make it the most used PDM in the world. with the period when EDS owned UGS prior to spinning it out to priSource: Siemens PLM Software vate equity firms. “We felt when EDS was involved, they were sucking the life out of the Solid Edge product,” says Cory Goulden, CAD administrator at National Steel Car. “When Siemens took over, everyone in the Solid Edge community thought it was a good thing because, historically, Siemens has proven it is the type of company that makes a purchase because of how good the product really is. They bought it because they wanted to own it and make it better, not kill it.” How well Siemens will integrate the product portfolios, however, remains to be seen. “If you challenge them and say, ‘Show me There was “a common vision of integrating the virtual world with the physical world.” — Bill Carrelli, Siemens exactly how all of these products work and where things need to go,’ they have a hard time doing that,” said an end user, who requested anonymity. But the product integration focus will likely sharpen now that the organizational integration is complete. According to Newbury, the last steering committee meeting outlining the post-merger integration happened in August. “We formally transferred lines of function, defined who is responsible, closed out the checklist, and reported back to management,” he says. “We consider the [integration of the companies] complete.” While getting the departments working together was fairly routine, the effort was complicated by the need to enforce new compliance rules resulting from the bribery scandal. “This was particularly difficult as we had a new company to integrate in and now we had all of these additional rules,” Newbury says. In addition, because UGS was considered completely complementary with little overlap in technology, Siemens wanted the UGS team to remain in place. But executives worried that the corporate scandal, which resulted in the departures of Kleinfeld and other top executives, might cause employee upheaval. “Our concern was high because UGS had a strong culture and strong ethics,” Newbury says. “Everyone on [the Siemens] team felt strongly about ethics as well, so we communicated as much as we could about what we would do to investigate the issues. We also held town meetings, [sent out] employee surveys to get feedback, and addressed every verbal comment.” The town meetings turned out to be pivotal. One in particular, at UGS’ Cypress, CA, of- card ma October 28 2008 Photo courtesy: Siemens

Table of Contents Feed for the Digital Edition of Managing Automation - October 2008

Managing Automation - October 2008 Contents Take 1 Systems Integration Market Braces for a Wave of Consolidation Kinaxis Launches Program to Lure i2 Customers Patent May Give Mobility a Needed Shot in the Arm New Group Aims at More Efficient Smart Devices Solar, Life Sciences Will Be the Next Frontier For Robots Notes Cover Story:�2009 Companies to Watch Special Report:�Siemens plus UGS: Is the Merger Working? Transformation:�Driving Energy Efficiency Integration: How Clean is Your Data Industries:�Fed Raises Red Flag on Chemicals Product Scan Advertiser Index Next

Managing Automation - October 2008

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