The manufacturing software industry is consolidating, and that's not a good thing for consumers, manufacturing, or innovation.
By Kristin McLane, President of CIMx Software
Business grows through innovation, and true innovation comes from building and creating. Growth, innovation, and business feed off each other. CIMx was founded on this belief, and it’s what makes us different. Our business has grown because we offer a product we built and we support. Forever. Long-term stability is critical for our customers.
Wednesday, Dassault announced they intend to buy Apriso systems. This adds another MES system to a portfolio of services that already has one. Two years ago, they bought Intercim for the same reason. Why do they need two execution systems? Is there a compelling reason customers would need a choice?
Articles cite Dassault’s desire to infiltrate the Indian manufacturing market through the acquisition. Other articles discuss how the acquisition will increase the value of Dassault to shareholders and (potentially) to new customers. Neither one of these address the customer base.
All too often, business journals and the financial press celebrate mergers as “good business” or “growth” without looking at how the customers will be affected. And in many cases of acquisition, the customer is the one who really pays for it. A current article reads: “Dassault Systemes announces an intent to purchase Apriso to extend its offering into foreign markets.” If I already bought Apriso, and I currently use Flexnet on my shop floor, what does this acquisition mean for me? That’s the story missing here.
Both the Apriso and Intercim systems use highly customized tools that build a system for the customer. It is not likely a customer of one can migrate to the other, nor would they want to. They require large-scale business process changes to implement, either to an enterprise platform, or a fill-in-the-form type process adjustment. If a customer has gone through that kind of an implementation, what option does the merger offer?
I believe that this is a great growth opportunity offering new markets for both Apriso and Dassault. At the same time, I believe it minimizes opportunity for the customer. It reduces choice in the marketplace. It will drive up costs. And current customers will find they are reduced to a very small fish in an ever-increasing pond.
If you believe what I believe, then you too might be worried about what acquisitions and mergers in the manufacturing software solutions marketplace means for manufacturers. Merged products rarely work well together and require tricky formatting or, quite simply, multiple log-ins. Products should provide a true cash return to the customers that purchase them, not to the shareholders. We need more pure product in the marketplace. Products built by innovation and supported naturally. These are solutions that work and deliver as promised, not modules requiring extended services so they’ll integrate not only with your business, but other modules and acquired services.
We need more companies willing to grow by focusing on innovation that benefits the customer, rather than grow through acquisition with a focus on penetrating a market. Innovation is lost in the transaction, and the customer is lost in the story.
Two is not always better than one.