Product lifecycle management vendor PTC acquires MKS

OVUM VIEW

Summary

Just as Ovum launches its latest Software Lifecycle Management report that predicts, among other things, that a product lifecycle management (PLM) firm will acquire a software lifecycle management (SLM) firm, that is exactly what happened with PTC’s announcement of its intent to buy MKS.

The acquisition, which was announced 7 April 2011, is worth $304.56m in cash. It has been approved by both company boards, and is expected to close in June following shareholder approval.

The rise in embedded software precipitated the acquisition. The switch in product innovation/intelligence from electro-mechanical components to software has been dramatic in the past few years, with cars today typically containing tens of millions of lines of code or more. With this change there arises the need to manage the development process. SLM is designed to reduce risk and complexity, and ensure that project success is achievable, predictable, and repeatable.

PTC and MKS make excellent bedfellows

There are many reasons for PTC and MKS to get together. Because MKS has completely focused its products and marketing on companies that design software that is embedded into engineered products, it is increasingly running into PTC at many of its accounts. Similarly, PTC is in the early stages of launching an Eclipse tooling strategy aimed at delivering support for tools used by developers at their accounts. Many customers are growing increasingly vocal for a solution that will allow them to rationalize the processes that are performed in the PLM and SLM spaces, and the artifacts that are shared between them. As a modest-sized firm that is dwarfed in size by IBM Rational, a perennial issue for MKS has been its viability to support enterprise-scale implementations with thousands of seats, not to mention having deeper pockets to have more feet on the street to sell to a client base that is potentially huge.

PTC and MKS will therefore make a logical combination, but the acquisition will require PTC to educate and ramp up its sales force to understand the SLM sale.

Turf and culture gaps must be bridged

The issue of who defines the product, and the associated artifacts such as requirements, quality assurance, and change management, has become increasingly fluid in recent years with the growth of software content in engineered products. While traditionally, software enhanced a product, in a growing number of cases it now defines it. How would an iPhone differ from a BlackBerry or Droid without the software?

The result is a growing jurisdictional battle between traditional product engineering that encompasses mechanical, electrical, controls, and systems engineering disciplines, and software engineering. Not surprisingly, where you see different constituencies, you will see different tools and solution stacks targeting them. For traditional product engineering disciplines, there was the design “vault”, a repository of product design specifications, as well as product data management that managed the design elements of a product as an integrated entity, and later, PLM, which also encompassed the processes by which product definitions were created, and designs generated, tested, and versioned. On the software engineering side, there were the tools of SLM. Significantly, PLM and SLM providers overlapped where it came to specifying the system of record for requirements, quality, and change management.

Embedded software bridges the PLM and SLM worlds

Embedded software today forms a substantial part of many products, including those not historically associated with software, from automobiles to washing machines. Cars, for instance, typically contain tens of millions of lines of code, with luxury models estimated to have over 100 million lines. Some estimates put the current growth rate of embedded software at between 10% and 30%. The size of embedded software instructions has increased by three orders of magnitude since the computer era began, to typically around 10^9 instructions. Not only is the range of products using software increasing, but also the extent and way in which software advantages are harnessed is evolving. Many mechanical and hardware fixed elements are found to be replaceable by software, offering greater flexibility and fine-tuning. The size of these components is leading to operating systems (typically Linux) to be embedded within the systems, and this allows the software to be more easily programmed in and updated. A defining characteristic of embedded systems is that the user interacts with a hardware/mechanical object and not directly with the software. However, the trends essentially place a computer in a box with some defining added components that make a mobile phone different from an aircraft navigation system. This phenomenon of greater computational capability in smaller devices is also propelling the embedded software revolution.

With the rise of embedded software use there is a need to manage its greater complexity during development, and SLM becomes essential in this capacity. SLM automates the mundane and tedious activities that by their nature make developers prone to errors. The problem now is that as SLM makes inroads into systems and product spaces, the occurrence of manual steps is transferred to the interface between SLM and PLM. PLM systems are typically used to manage complex systems and engineered products, managing the exchange of artifacts and people between the different groups (software, systems, and product/hardware). As SLM expands beyond enterprise IT and into the systems and product engineering space, the ideal is to have integration between SLM and PLM that can help organizations to streamline their processes and leverage skills and tools. Multiple teams are involved in product development and manufacturing, with mock-ups that rely extensively on software modeling, and software teams need to exchange project artifacts with systems and product engineers, and algorithm experts. Integrating SLM and PLM systems will therefore be increasingly important.

Ovum has just published its Software Lifecycle Management 2011/12 Technology Evaluation and Comparison report and will be hosting its Application Lifecycle and Enterprise Agility Symposium in London, 16 June 2011.

APPENDIX

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