Ford Motor Co. has picked IBM Corp. and Dassault Systemes SA to supply and install product lifecycle management (PLM) and design software, IBM and Dassault said Thursday.
The software will allow the world's second largest automaker to shorten development cycles, increase flexibility and bring new products to market faster, according to IBM and Dassault in a joint statement.
IBM of Armonk, New York, and its partner Dassault, of Suresnes, France, will install several PLM applications, including their joint Catia and Enovia applications, at Ford's design and manufacturing locations worldwide, the companies said. Financial details of the deal were not disclosed.
The announcement could be a blow to Electronic Data Systems Corp. (EDS), a long time supplier of PLM software to Ford. EDS has more than 200 employees dedicated to supporting Ford at a special technology center in Dearborn, Michigan, according to its Web site.
However, EDS is also a major supplier to Ford rival General Motors Corp., with business from GM and its affiliates contributing US$585 million in the third quarter of last year on total revenue for that quarter of US$5.41 billion.
"It could be the start of Ford moving away" from EDS, even though automakers typically "aren't too worried about using the same CAD (Computer Aided Design) applications as their rivals," said Simon Bragg, European research director in the Cambridge, England, office of research company Arc Advisory Group Inc.
Ford in a statement sent via e-mail said its deal with IBM and Dassault is part of its multi-CAD strategy and that "both EDS and IBM/Dassault are key partners." Reports that Ford is making a shift in its strategic direction in PLM software technologies and services are "grossly distorted," the company said.
"In addition to Ford making a commitment to IBM/Dassault, Ford has expanded its commitment to EDS' PLM software technologies and services as corporate standards for various aspects of its digital product development and manufacturing," the company said.
EDS also hurried to say that Ford is not distancing itself.
"For many years, Ford has used IBM as well as EDS products in their strategy to provide a CAD neutral development environment. This (IBM/Dassault) announcement does not change that," said Bill Carrelli, president business strategy and marketing for EDS' PLM unit in Milford, Ohio.
"We just announced an expanded contract to provide Ford with product data management, visualization and digital manufacturing software," Carrelli said. EDS won't give financial details on its relationship with Ford, but claims it is "significantly greater" than IBM and Dassault's.
Still, Arc's Bragg said Dassault and IBM have the better offering on the market.
"Dassault and IBM have the more complete PLM offering. It is not so much about CAD and 3D models; it is about integrating those models with fine analysis to be able to design the production line. The key is one model that can be passed to multiple departments in parallel and tells them whether the design works," Bragg said.