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Follow UsWhen archrivals like PTC and EDS decide to join hands to sign a technology
exchange agreement, what do you call it? In modern-day business parlance, the
perfect word for such a relationship is ‘co-opetition’. In other words, post
March 18, 2002, business for the two companies would mean both competition and
cooperation. So what happened on that wonderful Monday, rather what did the two
companies do to move away from a dogfight over market share to a more healthy
business environment?
Under the terms of the agreement–the first in the highly competitive
CAD/CAM market–signed by them, both companies have agreed to share toolkit
technology and exchange end-user products with each other. What this means is
that, henceforth both the companies will have the ability to provide
interoperability between their respective product lifecycle management (PLM)
solutions. The agreement also takes PTC a step further in its effort to deliver
interoperability with other enterprise applications to support Product First,
its recently announced comprehensive business strategy for the manufacturing
sector.
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The New Mantra |
| Forget the traditional concept of business as a ‘winner takes all’ or a ‘zero-sum game’, the new mantra of ‘co-opetition’ suggests that your opponent does not have to fail for you to succeed. Instead, it recommends that businesses can succeed by combining cooperative strategies with competitive strategies–cooperate to enlarge the pie and compete to divide it up. While the term was coined in the late 1980s |
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Why the friendship?
Experts suggest that the agreement between the two companies brings together
two market leaders in an initiative aimed at helping manufacturers decrease
interoperability costs and data integrity problems. In particular, this means
that interoperability between PTC and EDS software will significantly improve
situations where a mix of their software currently exists, as is often the case
between OEMs and supply chain communities. Club it with the fact that the
CAD/CAM market has reached a near saturation point and we have the answer for
this deal.
Talking about what triggered this agreement, Chuck Grindstaff, president (PLM
products), EDS PLM Solutions informed that the company has been developing its
products on an ‘open by design’ strategy for many years now. ‘‘This
strategy, combined with the reciprocal licensing arrangement that is part of the
agreement with PTC, will truly benefit our mutual customers by enabling enhanced
connectivity. Our goal is to create the highest possible level of product
definition exchange.’’
According to Kishore Rao, managing director, PTC India, the agreement will
help both companies address two related issues.
‘‘Manufacturers need ways to exchange product data with their entire
supply chain; and as vendors, we need to promote the growth of the PLM industry
in order to help them do that. Only a complete product development process and
interoperability will allow manufacturers to create the product, collaborate
with all participants throughout the value chain, and effectively control the
process,’’ he says.
The business factor
But there’s another reason too and that is more important for both
companies. With the CAD/CAM market moving towards a saturation point, the only
way these companies can expand their market share is by expanding the size of
the market itself. In today’s world, a lot of collaboration is required
between OEMs, their vendors and the customers for product development. However,
there is a limitation to the extent that all partners can collaborate because
most of the design tools do not talk to each other. This limits the spread of
usage and hence the growth for players likes EDS and PTC. According to Rao,
‘‘The agreement is part of PTC’s many strategies to expand the market.’’
SHUBHENDU PARTH in New Delhi