Winners and Losers When Industry Giant Bosch Consolidates CAD and PLM

Large PLM contracts are generally hard to get. Is that about to change?

There are already some signs of this, at least in the tough German industry market. This means that for those who have not planned for the Industry 4.0 concept, it may be time to reconsider.

These ideas about a fourth industrial revolution are rattling the market. Demands for holistic software capabilities, integration between product development and manufacturing, in parallel with transparent and broader carriers of information, are sharpening competition.

When it comes to the big three high-end PLM players—Siemens, Dassault Systèmes and PTC—it has already started affecting their businesses, as has the fact that they all chose different approaches to PLM and the related solutions.

All of these factors came to a head when industrial giant Bosch announced that the company's Electrical Drives division decided to standardize main parts of its PLM arsenal in terms of CAx, PDM and tools for collaboration.

Starting in summer 2016, software from Siemens PLM, NX (CAD) and Teamcenter (PLM/PDM) will become standard, thereby phasing out legacy solutions from, above all, Dassault Systèmes.

The company thus becomes the second large German corporation in a short time frame to invest in PLM software from Siemens in favor of a Dassault solution.

Only a year ago the German vehicle manufacturer Daimler Mercedes switched from Dassault's CATIA to Siemens NX, while Teamcenter already was in use.

Bosch will switch to mainly working with Siemens software for CAD and PLM/PDM purposes. This is primarily about Siemens’ high-end CAD-CAE-CAM software NX and the PLM/PDM system Teamcenter. But the decision will have repercussions far beyond the Electrical Drives Division, as the ultimate goal is to standardize the entire extended enterprise on PLM tools from Siemens. 

However, the term “standardize” is relative in large organizations like this – as a matter of fact, PTC still holds a strong position with CREO/Windchill, and will probably continue to do so.

We’re not talking about a small player, either: Bosch Group has about 375, 000 employees worldwide and revenues in 2015 reached more than EU€70 billion (USD$78.8 billion). The group contains 440 subsidiaries in 60 countries, while the company is represented in more than 160 countries through partners.

It goes without saying that an enterprise of these dimensions achieved its success through proactive technology development, combined with cutting edge production and manufacturing capabilities. Proof of this can be found in the fact that the organization posted over 4,500 tech patents last year.

But the pace of change on the global market makes it demanding to create world-class products.

This requires an adjustment to the new technologies and platforms which are changing the reality of industrial companies at an unprecedented pace. The Industry 4.0 concept is one the important drivers in this development. Ultimately, it will change the structures and processes of product realization. Bosch has accepted this challenge.

Until now, the German industry player has had a very diverse set of software solutions. Some solutions entered the group through acquisitions, while some divisions had autonomy to choose their own solutions. The goal now is to improve communication not only within the Electrical Drives division, but also between the different parts of the company by giving everyone the tools needed to work together seamlessly.

This can be achieved, Bosch said, by progressively eliminating this diversity and betting on a base platform of solutions. Siemens PLM's Teamcenter and NX will become the foundation for this platform within this particular division. However, PTC’s CREO (CAD) and Windchill (PLM/PDM) will remain an integral part of Bosch’s two-vendor strategy for its tool set across the enterprise, which seems to be a good idea in order to never become dependent on only one vendor.

Neither Bosch nor Siemens has disclosed how many licenses the deal includes, but when the big German industrial players change systems, numbers usually reach into the thousands.

A good example is Daimler Mercedes, which just recently finished its transition from Dassault Systemes CATIA to Siemens NX (watch PLM TV News TV-report:  “Not a Walk in the Park. The Inside Story Behind Mercedes Big CAD Swap”). In this case, the German automotive giant purchased approximately 6,500 licenses, a deal worth tens of millions. My qualified guess is that the Bosch deal is a matter of sizeable volumes, although it is far from the Daimler volume.

Another Great Siemens Success, but Competition is Fierce

Clearly, Bosch’s decision is a success for Siemens PLM in the Electrical Drives division at Bosch. Similarly, it will have implications for other PLM players who lose out on business when legacy systems are replaced.

In this case, Dassault Systèmes will be affected.

Even though all of these PLM developers, PTC included, are characterized by different “attack angles,” all of them are aiming to establish end-to-end solutions that include modules for collaboration between product development and manufacturing.

For these purposes—among others—PTC initiated a joint venture with GE (Intelligent Platforms).

This is a combination of PTC's PLM solution Windchill and GE's Proficy, which is a specialized software application for discrete manufacturing. The idea behind the unified solution, called "Proficy + PTC Windchill," is to bridge the gap between product design and manufacturing in PTC-centric development environments.

PTC’s CEO Jim Heppelmann could also argue that the company's rock-solid commitment to the Internet of Things has strong links with the vision to cover the entire product lifecycle chain, potentially even further than Siemens PLM. 

However, some parts remains in terms of deeper integration between the acquired IoT companies and solutions, the partnerships related to manufacturing and PTC’s existing portfolio in Windchill.

Windchill, in its latest version, has been equipped with the first generation of connections to PTC’s key IoT solution ThingWorx, giving the company a stronger aftermarket flavor than any of the other players.

In the case of Dassault Systèmes, the company has a history of strong product definition and simulation, with tools like the CAD system CATIA and the CAE suit SIMULIA.

They have worked hard for many years to create a product data backbone solution ending at today’s ENOVIA (V6), which is mainly based on the purchase and development of MatrixOne, an American solution it bought many years ago.

Dassault Systemes has always been competitive when it comes to digital manufacturing, with the DELMIA product as the central “gravity” point. To that, DS has added newly acquired manufacturing-related solutions such as Apriso (MOM and MES), which it is working full-steam to integrate more deeply. 

From 2014 forward, all of Dassault’s high end products are based on what CEO Bernard Charles calls the “beyond PLM” platform 3DEXPERIENCE (which in turn is based on DS’ V6 architecture).

3DEXPERIENCE is a serious attempt to realize a complete end-to-end platform, but in spite of growth the uptake of the new platform is still weak. According to the latest “official” break-down numbers, so far approximately 15 percent of DS revenues relates to 3DEXPERIENCE on V6.

In many cases, the slow uptake is related to the product-data-driven structure that is the hallmark of ENOVIA V6. For both Volvo Cars’ choice to remain on CATIA V5, and Mercedes’ decision to swap to NX, the requirement to use ENOVIA V6 was an obstacle that made it for Siemens PLM’s alternative.

This data structure is different from the “normal” file-based structure that characterizes most of the other systems in the PLM world. Recently, DS created V5 (file-based)/V6 bridges to reduce problems related to the V5/V6 discrepancies. Traditionally, Dassault environments are hard to optimize in terms of third-party openness. 

However, I want to make it clear that there are some good examples of clean Dassault V6/3DEXPERIENCE environments – for instance in the aerospace segment – where the new platform works smoothly and covers the product realization chain as intended.

While Dassault’s PLM suite (3DEXPERIENCE) has advantages, the bottom line is that DS so far hasn’t managed to meet the demands of the Industry 4.0 concept to the same extent as Siemens PLM.

Bosch’s Transition to NX and Teamcenter Environments Starts This Summer

According to plans, the transition to NX/Teamcenter and the phasing-out of legacy systems, like Dassault’s CATIA, is set to begin by the summer of 2016 in the Electrical Drives division.

Bosch already has many years of experience using both NX and Teamcenter in other divisions. The decision to expand the use of Siemens software to Electrical Drives which, among other things is a major supplier to the German and global automotive industry, is part of a strategic development plan that also includes changes in the company's methodologies when it comes to matters such as modeling, design and collaboration.

The ultimate goal is to create a modular set of software tools that tie together the entire product development process within the framework of an end-to-end solution. This is also one of the main points of the German Industry 4.0 Initiative.

NX will be used to establish and optimize an integrated product development environment at Bosch. More specifically, NX will be used not only for design and simulation, but also for manufacturing and engineering analysis.

Additionally, Teamcenter will provide a platform for a broad range of development tasks from various actuating drives for window lifts, seat adjusters, sliding roofs, steering column adjustment and lift gate drives to motors for anti-lock braking and electronic stability control systems, fan modules and coolant pumps for motor cooling systems, front and rear wiper systems as well as drive motors for e-scooters and e-bikes.

Through these actions, Bosch will receive a more scalable IT environment, which can more easily be adapted for various purposes and sizes.

“We believe that the increasingly complex products in today’s automotive suppliers often require a systems-driven approach to product development that combines systems engineering with an integrated product definition,” said Urban August, senior vice president and managing director for Siemens PLM Software. 

“To facilitate systems-driven product development (SDPD), we provide product line engineering capabilities, a consistent process-enabled framework for mechatronic engineering, advanced modeling and simulation, an intuitive user experience and an open PLM environment,” August added.

What Are the Benefits for Bosch?

Bosch expects benefits to include increased speed in innovation, accelerated time-to-market and increased support for Industry 4.0.

The latter is key, and will also affect how Bosch collaborates with partners and customers in product realization processes. No doubt there are also advantages to be gained from more effective collaboration between the company's different divisions.

But there are more (possibly unexpected) advantages that may occur.

Obviously, not all software exchanges take place without good reasons. Superficially, even if it is an extensive operation to swap systems and become productive in the new systems, there may be unexpected gains to be realized.

Daimler Mercedes’ former R&D director Alfred Katzenbach said that by, "selecting 250 different CAD-related cases and for each of them developing the methodology required," the company made both time and quality gains. 

“And it was about concrete cases with real components that were in production. Of these, we made videos that were placed in a reference library available to the users. With the cases that followed, we managed to establish new, more effective and widely used ways to produce CAD jobs,” said Katzenbach, adding that this important harmonization of CAD work wouldn’t have come about without a comprehensive system change such as the swap to NX.

It wouldn’t be a surprise if Bosch took this under consideration as one of several potential grounds for the decision to consolidate.