On January 25, two weeks before the thunderous roar of firecrackers ushered in the Year of the Dog, PTC (www.ptc.com/) and IBM (www.ibm.com/) declared an alliance to go hunting jointly for PLM sales opportunities in the Dragon's domain. A Chinese astrologer might herald this collaboration as a propitious partnership, characterized by the canine mascot's faithfulness, loyalty and devotion. But I'm a pragmatist and a cautious journalist, pathologically skeptical of sound bites (it's an occupational hazard for those who routinely read press releases), so I feel I ought to find out what's behind the initial public relations sizzle.

All Roads Lead to IBM

"In China, even though PTC is reasonably well accepted in the engineering community, it's not necessarily in the engineering community that major purchase decisions are made," said David Weisberg, a consultant and analyst at Cyon Research (www.cyonresearch.com/). "And let's face it—IBM is a much more recognizable name everywhere."

Big Blue arrived in Red China even before the country decided to fully engage the West. By the time Jiang Zemin shook Bill Clinton's hand in front of the White House in 1997, the IBM China Research Laboratory in the northwestern corner of Beijing had been open for two years, and the company's Chinese office, which was established in 1992 ("IBM Unveils Giant Computing Grid in China," October 13, 2003, Reuters), had been in operation for five years. When it comes to enterprise solutions, IBM was entrenched in the field long before China decided to encourage private enterprises. In 1972, when Nixon was on a plane for his historic visit to China, IBM was selling programmable terminals and data communications terminals. If you're part of a company with PLM (product lifecycle management) packages that can plug into enterprise applications, and you're turning your eyes toward the Dragon's backyard, you can't help but notice IBM has established four PLM offices across China: one in the political center of Beijing, one in the industrial region of Guangzhou and two in the commercial centers of Hong Kong and Shanghai. Suddenly, Big Blue looks like a big brother that can help PLM business see green.

"I was a little bit surprised that PTC and IBM struck this deal, mainly because of IBM's close relationship with Dassault Systemes," said Weisberg. "I would not have been surprised by a similar type of agreement between PTC and HP, for instance." In fact, in a previous issue of Engineering Automation Report, Weisberg suggested the idea of an HP–PTC partnership as a possible countermeasure to the IBM–Dassault partnership.

IBM and Dassault Systemes (www.3ds.com/) have a 20-year-long partnership in promoting PLM solutions based on CATIA, ENOVIA, SMARTEAM and DELMIA. Dassault uses IBM's Websphere middleware for its ENOVIA lifecycle applications and pushes IBM's DB2 software as the preferred data-management technology. The question is, will the IBM–PTC partnership's roadmap to China cut across IBM–Dassault partnership's territory?

A Time for Delicate Balance

Brian Shepherd, PTC's senior vice-president of product management and strategic marketing, said, "We've been careful on both sides in structuring this partnership to take into account IBM's history with Dassault and the relationships that IBM already has with other customers. One of the things we're doing is improving PTC's products to better leverage IBM's middleware and the rest of its technology stack. Where it makes sense, we try to tailor or focus our efforts to areas that are not covered well by the IBM–Dassault partnership; for example, in electronics and high techs. IBM is good at this kind of relationship, where it works with multiple software vendors. We certainly have no concern over it."

All the IBM–Dassault announcements that I've seen do not explicitly mention China, or Asia, or the Pacific Rim, for that matter, as their joint focus area. In the AMR Research Alert Highlight issued on January 25 (www.amrresearch.com/), Michael Burkett, AMR's PLM watcher, noted, "The interesting twist is that IBM PLM is the principal sales channel for Dassault Systemes—a relationship that has existed for approximately 20 years. As such, IBM is careful to emphasize the importance of the Dassault relationship, and that the PTC arrangement will focus on markets such as China, where IBM and Dassault do not jointly sell today."

By contrast, the recent IBM–PTC announcement does not mention specific Chinese industries that the partnership targets. (It does, however, reference "a targeted account strategy in . . . electronics, consumer packaged goods and life sciences in Europe and the United States.") PTC's Shepherd clarified, "The principal focus of the IBM–PTC relationship is the PTC Windchill products and PLM products. There's no industry-specific focus on this relationship, but we are in the process of jointly planning our engagement strategy in China. That will include automotive, aerospace, shipbuilding and—where PTC has the home-field advantage—electronics and high tech."

In his commentary on the IBM–PTC announcement ("PTC Inks Deal with IBM," www.cadwire.net/), Cyon's Weisberg noted that, in a teleconference, PTC's CEO Dick Harrison said the intent of the agreement is not to poach current Dassault accounts where IBM is strongly entrenched, although they are fair game for PTC's own sales force.

I'm guessing that means executives from, for example, China's Shaanxi Aircraft Industry Group, which signed up for CATIA and SMARTEAM in 2003, could very well get a call from a PTC sales rep pitching Pro/ENGINEER and Windchill.

Nicole Rowe, director of PTC's corporate communications, said, "Initially, the IBM–PTC partnership will be targeting very large enterprises, but we have a separate relationship with IBM to offer on-demand products to SMBs [small and midsize businesses] in China." As it happens, IBM and Dassault also have a strategic partnership to promote PLM in SMBs, though not specifically in China. On July 27, 2005, they announced, "While IBM will continue to provide end-to-end, global PLM solutions, Dassault Systemes will be responsible for operation of the sales channel of IBM PLM Business Partners in the SMB market in selected European countries and in the United States."

"What I don't know," said Cyon's Weisberg, "is how IBM is splitting the focus between its Dassault-related activities and PTC-related activities. If a single business unit is responsible for both, then it ends up being almost a personal choice for the people on the ground to decide which product they want to promote. If there are two separate groups—one responsible for Windchill, another for ENOVIA—then there could be internal competition at IBM."

What Would Sun-tzu Say?

In The Art of War, Sun-tzu says one can predict victory or defeat beforehand by observing the terrain, the formations and the forces in the field. Lacking the ancient strategist's wisdom, I'm unable to come to a definitive conclusion as to whether PTC or Dassault has the upper hand in aligning with IBM. But if you're an executive surveying the PLM options available, the vendor rivalry is in your favor. Whether you pick PTC's Windchill or Dassault's ENOVIA, it'll be backed by IBM's formidable IT force. To the consumer belongs the spoils!