Daimler Shift to Siemens Reverberates Within Industry

Poaching of Dassault customer could represent 'bellwether change,' according to analyst.

Slowly but surely, Siemens PLM has strengthened its foothold within the automotive industry, as OEMs in recent years have flocked to its software as a primary tool in product development.

But on the eve of Thanksgiving, Siemens PLM stunned the manufacturing world when it announced that German automaker Daimler AG will deploy Siemens' NX CAD software for its worldwide vehicle development.

The move carries significant weight given that Daimler represents the second major automotive OEM to standardize using Siemens' PLM franchise. Just six months ago, Chrysler Group announced a similar shift to NX CAD brand.

Moreover, Siemens' new customer came as a major setback to rival vendor Dassault, Daimler's German neighbor, which had been the CAD provider for the German automaker for years. Chrysler had also been a Dassault customer.

According to Daimler, engineers had been using Siemens' Teamcenter PLM software for product data management in a customized format, but the addition of NX CAD will allow for a more tightly integrated product development process that creates a closed loop from design through production planning down to managing production machines.

In a release, Siemens notes that NX and Teamcenter PLM provide parallel processes in development, design, production planning, and production.

Though shaken, Dassault still maintains significant business within the automotive sector, with OEMs such as BMW, Ford and Toyota, along with software suites that will still be in use at Daimler and its suppliers.

Nevertheless, industry specialists noted that Siemens' latest coup represents a major shift in the software purchasing trends of the automotive industry.

"[It] represents a bellwether change that may have ripple effects across automotive and other industry verticals," said Ken Versprille, a PLM Research Director for Collaborative Product Development Associates, a consultancy group, in the statement.

The reason for this, he said, is that from both inside and outside the manufacturing realm, no one questioned that Dassault held a dominant grip on European automotive OEMs.

"The image leadership of being the PLM vendor of record at one of the 'lighthouse' accounts in automotive or aerospace cannot be overestimated," added Versprille. "Product development companies across all industry verticals take critical note of the PLM vendor chosen by the leaders. It can often tip their own decision in a similar direction."

Siemens has cracked a large hole in that armor. And one thing is for certain: high-profile customer defections will likely to continue, especially with the advent of open standards and cloud computing and as technologies become interchangeable.

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