Siemens' UGS Purchase Shows Promise For Manufacturers

Feb. 7, 2007

The purchase will create a strong manufacturing offering.

A "bold move" is how some analysts are describing the move by German conglomerate Siemens AG to acquire UGS Corp., a provider of PLM (product lifecycle management) solutions, for $3.5 billion.

The deal brings together UGS' strength in product design and management solutions with Siemens' strength in production automation solutions. That combination, according to analyst firm CIMdata Inc., Ann Arbor, Mich., could lead to the possible creation of an "all-inclusive environment for both design and manufacturing engineers -- enabling manufacturing information and features to be incorporated into the design process seamlessly and earlier into the overall product development process."

Siemens CEO and President Klaus Kleinfeld says Siemens' purchase of UGS will result in a "unique combination."Indeed, for manufacturers the acquisition offers an opportunity for a tighter integration between product design and manufacturing execution, says Michael Burkett, a vice president at AMR Research Inc., Boston. According to an AMR report, "Those using Siemens as their strategic automation and controls supplier will now have a single point of access to a world-class, design-to-manufacturing capability."

As with all acquisition deals, the potential benefits rely on a successful integration process.

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