Ericsson and Dassault Systèmes have officially confirmed the news that ENGINEERING.com first revealed more than a month ago.
The Swedish telecom giant will invest heavily in Dassault's PLM platform 3D EXPERIENCE as their product data backbone.
40 percent of the world’s mobile traffic runs through networks supplied by Ericsson. This means that the implications of this deal are huge. Ericsson will leave its former IBM mainframe environment PRIM, which uses Dassault's ENOVIA V5/Matrix 10 as its PDM system.
They will be moving over to Dassault's V6 architecture with ENOVIA V6 as a configuration and database engine.
Ericsson’s investment in Dassault is clearly a mega-deal regardless of how one looks at it.
"In terms of the number of users, it will intially be 25,000 at Ericsson's R & D department during the the first implementation phase," said the company's new CIO Johan Torstensson in today's TV-report.
Torstensson added, "Ultimately, in the second and third phases, we are talking about the real Big Bang. We will have many more than the initial 25,000 users in the coming phases as we spread the ability to use the design and configuration data to all areas where it might do some good, such as in sales and support.”
In financial terms, according to speculation, the Ericsson PLM investment could be worth in the tens of millions USD. And that’s only in the first year.
However, Torstensson declined to comment on the amount.
“This order was like winning the gold medal in the PLM olympics,” said Dassault’s sales director for Northern Europe, Mårten Gustafsson, as he described the deal.
Is he right? Of course there are other big accounts to win, but in this case he’s got a point. All the interesting PLM-players were there and the investment at stake was “sizeable”. Everything was filtered through Ericsson’s rigorous evaluation process.
In the end, Dassault’s 3DEXPERIENCE emerged as number one, beating out Siemens PLM’s Teamcenter in the final round. PTC, SAP PLM, Oracle and Aras were all eliminated at some point during the earlier stages.
So, what were Ericsson’s main reasons for choosing 3DEXPERIENCE?
“Well, this is a business change program,” explained Torstensson. He continued, “One of the most important things in light of this is the road map of Dassault. It looks very promising, specifically regarding the digital transformation we will carry through at Ericsson. In addition to that, as we conduct a change program for 25,000 people in the company the GUI, the interface, is crucial. To drive the change, people need to feel that they are coming into a modern kind of system. We need to have one common interface, and that’s what Dassault provides.”
That said, he added that Ericsson was looking for a partner. “We want the software supplier–in this case, Dassault–to be our technology partner. Dassault Systèmes has shown that intention from the top leadership of president and CEO Bernard Charles all the way down to the project leaders and sales people.”
Furthermore, he concluded that Dassault has commited to being part of the transformation journey, which will take three to four years.
Did it matter that Ericsson already had a Dassault solution in place?
“No,” asserted Torstensson, “that didn’t matter at all. Dassault won on the future in combination with what they already have.”
A “Young” Solution in Need of a Poster Child Like Ericsson
For Dassault, the order from Ericsson is one of the most significant to date for its new end-to-end platform 3DEXPERIENCE.
So far, 3D EXPERIENCE has had a slow journey towards becoming a widely established replacement for the more common previous generation ENOVIA V5-based solutions.
As I discussed in a previous article Jaguar Land Rovers’ installation of the 3DEXPERIENCE platform has so far been the poster child–especially in the automotive sector. The Jaguar example is also accompanied by a couple of cases from the aerospace industry.
From this perspective, Ericsson’s bet on this still-young technology is paramount. Being a high tech company in a business where digitalization strikes quickly and forcefully demands a solution that leads to cutting-edge capabilities.
Ericsson’s customers, competitors and players in other industry segments will all be following developments at Ericsson very closely. If everything works according to plan, and if the platform is able to develop the necessary maturity and deliver on its promises, then this will truly become a breakthrough order for Dassault and a proactive move for Ericsson.
A relevant question is whether Ericsson took the “young age” factor into consideration when they decided on 3DEXPERIENCE?
“Yes, we really did do that. We never want to go bleeding edge,” claimed Johan Torstensson. “We’re dealing with a core process of Ericsson. We can’t bet on new technology that doesn’t work. For instance, we looked at many cases where companies are using this platform; references have been essential.” One of the references they have is in fact Jaguar Land Rover, which Ericsson also visited.
Generally, Torstensson says that they are very aware of the pros and the cons. “One of the advantages with Dassault is the transparency. We know some of the challenges we will have, but we also know that this is a proven platform.”
Mårten Gustafsson, Dassault Systèmes’ sales director of Northern Europe: “The order from Ericsson was like winning the gold medal in the PLM olymics.” (Image courtesy of Bosse Johansson.)
Dassault’s Principal Objective: Solutions to Simulate Life
One thing is crystal clear when it comes to Dassault Systèmes: there are few companies with a more vivid vision for the future.
Coming from its charismatic leader Bernard Charles, the company today focuses on an end-to-end platform, or even a solution that “can simulate life,” more than any other player in the PLM market.
The interpretation of this, according to the company's sales director for Northern Europe Mårten Gustafsson, is that the 3DEXPERIENCE platform covers major parts of the reality aspects:
- Product Lifecycle Management and all surrounding processes, making sure the right person internally as well as externally gets the right information at the right time.
- 3D capabilities, meaning that you can define, create and collaborate around not only product models and the manufacturing process, but also surrounding nature, houses, cities etc. to get a complete virtual copy in 3D. This includes life sciences solutions for the creation and simulation of nature, natural resources, and even human organs.
- Simulation capabilities where almost anything can be simulated, from smart cities and infrastructure to products, production lines, traffic jams, antenna signals and more.
- Tools for the analysis of Big Data, structured or unstructured, in the context of IoT, Cloud technology, constant connectivity and social media.
This is the principal description of the platform that Ericsson will use to develop its innovative products for the future.
I asked Gustafsson what this project will mean to Dassault as a poster child project.
“A lot,” he replied. “But not only to us and to Ericsson, but also to other customers that have already chosen and deployed the 3DEXPERIENCE platform. Another very important and exciting factor is that this has really been like the PLM olympics, based on the fact that all the major players in the PLM market have had an application up and running at Ericsson. And they have all been keen to win this opprtunity.”
Furthermore, he points toward the fact that Ericsson has delved very deep into the technical evaluations surrounding applications in this “contest.”
They have looked at the products from all angles and examined the companies behind the solutions. He concluded, “Last, but not least, this was not only about a replacement of the heart of Ericsson’s IT landscape, but in fact it was the search for an enabler of Ericsson’s business transformation.
According to Ericsson’s Joakim Cerwall, sponsor of PLM Transformation, the process of looking and planning for a new, capable system has been going on for some time.
“It’s great that we finally have a ‘go’ on the new IT platform after many attempts in the past,” he said.
Cerwall continued, “We have performed thorough investigation and testing to find the best PLM solution for Ericsson to connect IT and the business units. This transformation is crucial to ensure the efficient digital handling of product data throughout the company, making Ericsson a competitive ICT player.”
From Hardware to Software Dominance
This major investment confirms that Ericsson is in a profound process of change.
During the World Mobile Congress in Barcelona earlier this year, CEO and president of Ericsson, Hans Vestberg, stated that the company's business had changed radically in just a few years. From once being a purely hardware-oriented company, the Ericsson of today is focused mainly on content, software and services.
“Together with the players in our industry and our customers, we have embarked on a journey of change,” said Vestberg. “Today, 66 percent of our business is related to software and services. Just a few years ago it did not look that way, when only hardware mattered.”
Vestberg also indicated that the company’s main competitors today were ITC players, rather than telecommunications operators.
“Our portfolio is constantly evolving to maintain a pace that can meet customer needs. We see how not only individual industries but whole communities have revolutionized through mobility, broadband and cloud, and in the same way it also accelerates our own transformation.
Speeding Up Development and Tying Together Departments
Judging from these statements, it’s a good bet that the PLM system's potential role as a catalyst for change will be given a lot of attention at Ericsson.
“The new platform will ensure that we can automate and speed up the development flow, and at the same time make relevant product information available to user groups such as sales, integrators and support,” said Torstensson.
“It is also crucial to enable faster time to market, and to ensure that our customers are able to purchase Ericsson products through digital channels. The benefit of this project, compared with previous attempts to introduce a new IT platform, is that it is business driven,” continued Torstensson.
The Swedish telecom giant’s efforts are aimed at developing and applying new product development processes. These are intended to better meet the demands of a range of disruptive technologies and technology platforms such as the Cloud, software-driven products, Internet of Things (IoT) and 5G (the next generation of radio-based, "cordless" communications).
26 Billion Connected Digital Devices
It’s not surprising that Ericsson sees the need to make this transformation when we consider the numbers. Ericsson expects that by 2020 there will be 26 billion digital devices connected to what the company calls "The Networked Society."
This will be enhanced by the interaction of mobile, broadband and cloud technologies that make communication technologies faster, cheaper and more accessible. This in turn is expected to inspire new areas to further develop innovative changes.
Ericsson is also quite clear that integration between IT, telecommunications and hardware will be necessary to sustain the provision of smart, connected software and service-driven experiences.
With Dassault's end-to-end platform 3DEXPERIENCE, Ericsson believes that it has gained a crucial tool for this journey of change.
A Rare Opportunity to Meet a Big Company CIO
What will happen to the PRIM solution when it is phased out after a year?
SAP obviously lost this PLM battle, but what about their role as Ericsson’s long time ERP system? One of the keys to law and order in the product descriptions area (CBST, or Corporate Basic Standard) is closely connected to PRIM; what will come to replace it?
How long will it take before Ericsson can enjoy the fruits of its labour? And who will lead the implementation process: Dassault, IBM or TCS?
Find out the answers to these and many other questions by watching this TV-report.
You will meet:
- Hans Vestberg, president and CEO of Ericsson
- Johan Torstensson, Ericsson’s new CIO
- Joakim Cerwall, head of PLCM Operations and PLM sponsor
- Mårten Gustafsson, sales director Northern Europe at Dassault Systèmes,
- Stan Przybylinski, CIMdata analyst and vice president