Few start-ups in the PLM industry over the last decade have irritated the established companies—Siemens, Dassault Systèmes and PTC—more than Aras PLM. While Aras’ Innovator PLM platform has yet to become an existential threat to these companies’ search for market share, Aras has taken enough seats in their important customer categories to become a thorn in the side of the big three.

Technologically and commercially, for example, Aras has established the Innovator suite with large users of PLM systems such as Airbus, Microsoft, GM and others. This is why PLM analyst CIMdata has moved Aras up to its top category, "PLM Mindshare Leaders"—an industry stamp that rarely sees newcomers in its ranks.

Aras PLM has also established a PLM suite that technologically can handle most of the challenges of keeping the value chain together in the product development area. Aras’ PLM suite manages everything from requirements specifications, product development and simulation to manufacturing, handling digital twins and threads, IoT and MRO (Maintenance, Repair and Overhaul). This progress all occurred during Peter Schroer's time at the helm.

But the ambitions for this low-code solution do not stop there; Aras wants to continue to grow. At the same time, after more than two decades at the helm, Peter Schroer decided to focus more on the business and technology development side, and handed over the wheel of Aras’ operational matters to Roque Martin.

"You can look at it as a marathon with a runner, but I believe more in the relay principle," says Peter Schroer, founder of Aras, in today's interview. We discussed Aras PLM, the Innovator PLM suite and what the future holds for Schroer and Roque Martin.

A Suitable Background. Roque Martin is Aras PLM’s relatively new CEO—he took the helm 7 months ago. Formerly from PTC, Martin (to the right above) has what looks like an optimal background for the job. He has high-level experience in areas that also happen to be of great importance to where today's PLM solutions, companies and business models are headed, Aras included: subscription Software-as-a-Service (SaaS) capacity in the cloud, and integrated apps with capabilities to seamlessly cover broad areas of PLM, OT (Operational Technology), IoT and AI support in product development, manufacturing automation and maintenance. To the left above, Aras’ founder, Peter Schroer.

No Mission Impossible for Roque Martin

When Roque Martin entered the action in October of last year, taking over the role of CEO, his mission was clear: consolidate the business, add new technologies, integrate and continue the powerful commercial growth.

It is difficult to imagine a more suitable background than Martin's as Aras PLM climbs further upwards on the commercial and technological scale. In his history at PTC, he held the job as general manager of the division that delivers system and engineering software for manufacturers of advanced products, as well as the R&D responsible for everything except for Creo and ThingWorx.

Prior to that, he had a 25-year career at IBM, where he worked with the Software-as-a-Service (SaaS) pieces, integration of acquired businesses—including Rational, TeleLogic and Doors—and development of competitive strategy.

All in all, this makes for a particularly suitable background in areas that are of great importance to where today's PLM solutions, companies and business models are headed: subscription software capacity through SaaS in the cloud, where integrated apps with capabilities to seamlessly cover broad areas of PLM, OT (Operational Technology), IoT and AI support in product development and manufacturing automation come into play, and where platform technology provides the infrastructure and processing capacity needed to take development to the next level.

“The product and the loyalty of our customers is by far the biggest strength. If I look at the product, I highly appreciate its capabilities, its architecture—but even more importantly, its flexibility. What you have with Aras is a solution that is extremely configurable,” says Roque Martin.

The Ethics of Hard Work

“Aras has a great vision in this,” says Martin.

“The way that it played out was that I literally got a call out of the blue from a recruiter. My career was going fine at PTC, but I took the call, and I had the opportunity to come and visit Peter in Andover. I vividly remember that we instantly hit it off for a couple of reasons: One is that we are philosophically very aligned from a personal and business value standpoint, as well as our understanding in our reading of what the market needs and demands are.”

“Looking at what Peter built, it’s about the notion of the American dream,” Martin says. “You have somebody with a fantastic idea and the ability to execute. I had a tremendous amount of admiration for him, his hard work and his determination, which are things that I value. I have done this in a corporate environment, while he has done it in an entrepreneurial manner. The ethics of hard work, caring for your employees, your product and your customers are values that we share. When we began to talk about customers, people that make cars, airplanes, industrial equipment, high-tech solutions, medical devices and others, and the challenges that they are facing and the types of solutions that they need—we were immediately on the same page. So, I said, ‘Okay, I’m all in, how do I work myself into this world?’”

“It’s all About Scale”

Coming from big time players like IBM and PTC, Martin brings a lot of PLM-related experience to Aras. What are the most important lessons he learned?

“I think it comes down to the ability to scale,” he says. “If we look at what our investors presuppose and what our primary role is, it’s all about scale. Peter Schroer referenced that it is a business that has over the last six or seven years consistently reached a growth rate in a 35 percent year-on-year range.”

But it’s not just that Aras is growing; it’s that it is doing so in a risk protected and risk managed way.

“It’s a very large industry market, the PLM segment,” says Martin. “And it’s also a downside protection in that, when customers make an investment in a PLM platform, they are essentially making a very long-term commitment to a technology and to an approach. GI Partners, our main investor, perceived all that effectively. I have viewed this business from the outside perspective, and that’s what it’s all about. Peter was able to grow it to a multi-million-dollar business. My experience at IBM, which was essentially an order of magnitude larger, and the experience from PTC which was two orders of magnitude larger, is relevant in this since I’ve sort of grown up with scale in mind. I’ve grown up with building business processes, building products with that kind of scalability in mind. That is what I’m being tasked to bring to Aras and what I’m uniquely qualified to do.”

Founded With the Cloud in Mind. Aras was founded in 2000 with a traditional sales and licensing model. After seven years of slow growth, Schroer thought it was time for a change. He gathered up his sales team in 2007 and fired them. "We're going to distribute the software over the internet," he said. And he reasoned that with an open source, free-of-charge solution, he didn't need a sales department. The Internet and a global chain of partners, he argued, would generate the revenue stream the software "deserved." The screenshot above illustrates Innovator’s multi-CAD capabilities.

Strengths: Customer Loyalty, Architecture and Upgrades

As of today, Roque Martin has spent around seven months at Aras. During this period, he has learned a lot about the company. What are the strengths, and what are weaker spots he has identified?

“The product and the loyalty of our customers is by far the biggest strength,” Martin says. “If I look at the product, I highly appreciate its capabilities, its architecture—but even more importantly, its flexibility. What you have with Aras is a solution that is extremely configurable. If you contrast that to some of our competitors, where companies have to adjust to the application, in our world it is very easy to configure the application, the solution, to the needs of the business. Moreover, if you layer in some of what Minerva offers—the large Aras reseller that we just bought—which is ready-built industry solutions in medical devices, high tech and electronics, the bottom line is that it further enables us to compress the time to value for our customers. That’s incredibly unique in the marketplace.”

One topic that has been in the center of the argument for Aras Innovator platform is upgrades. This has traditionally been a problem in many organizations, and Aras offered a great way to handle it. Although many of the related problems will be reduced due to the focus of platforms in the industry shifting to the cloud, SaaS-models and infrastructure being provided by PLM developers, there is an advantage for Aras. The thing is, claims Martin, that Aras was out early with its PLM in the cloud environment and thereby provided an extensive experience long before competitors even thought of it. They have been there and done that before.

“Exactly. If you compare to others in the industry, which I most certainly have been able to live through in my earlier environments, big, heavy and rigid applications become even more riddled when you have to develop specific customizations and the like,” Martin says.

“Things then tend to become very difficult and challenging for customers to keep current and to maintain agility, the ability to remain nimble and to evolve and change their business. Aras’ software upgrades as part of the subscription—that’s a game changer, and something that is very valued by our customers. I guess I intellectually knew about it from competing with Aras in my earlier capacities, but it wasn’t until I got here and got the opportunity to talk with customers and industry analysts and the like that I more fully and comprehensibly understood the value and the power it brings to customers.”

“Can interface with virtually any software.” The trend toward smart, connected products changes a lot in the way product compliance, configuration management and design validation is achieved. “What is needed to account for these changing products is a digital thread of synchronized information that remains up-to-date across departments and throughout the product lifecycle. To help create tomorrow’s new products, PLM must adapt to this changing environment to efficiently manage enterprise bill of materials (BOM), supply chain processes, embedded software, quality and more, from the conceptual design phase and out into the field,” says Aras CEO, Roque Martin. He further claims that Aras can interface with virtually any software, providing an overarching platform for promoting efficient, multidisciplinary collaboration.

Roque Martin regards Aras’ third point of competitive advantage to be the architecture of the solution.

“Hats off here to Peter Schroer for the vision,” he says. “Even though it’s a twenty-year-old application, it was built with cloud and the future in mind. This has enabled us to very quickly and easily have a cloud SaaS offering for our customers that offers all the same values, capabilities, interconnectivities and flexibilities that have been the landmark for Aras for a couple of decades, but in this new context now. The feedback we’re getting from the market, from specific customers, is overwhelmingly positive.”

In the next article, we will discuss the Ansys arrangement, Minerva’s hidden potential and “Nice Exit Profits” for Silver Lake and Goldmann Sachs.

Our next Aras article will look at why one of Roque Martins’ first measures was to buy Minerva, Aras’ number one reseller and partner. It turns out that this deal contains significantly more substance than originally thought, leading to both simulation and analysis player Ansys, as well as Minerva's specific competence related to industry-adapted PLM solutions in medical devices, high-tech, electronics and other areas—all industry segments where the new Aras leader sees a huge potential.

Moreover, we will discuss Innovator's low-code profile, its technology, new upcoming Ansys-like deals, and the deeper reasons why Aras’ founder Peter Schroer handed over the executive power to Roque Martin.