6+3 Portfolio manufacturer of systems engineering tools

Note: Updates at the end on Renesas and Mathworks at the end of the article.

Manufacturers of tools for systems engineering fall into two classes: There are portfolio manufacturers such as IBM and Siemens, which have a whole range of tools. Then there are small companies that only sell one tool, but which can usually be integrated into an existing ecosystem. I call these boutique companies, which include companies such as Jama Software or Sparx Systems.

It remains to be seen whether the argument that tools from one portfolio always work together smoothly is true. But decision-makers should be aware of what the choice of a manufacturer means, because switching is difficult. So here is a list of the 6 most important portfolio manufacturers that produce systems engineering tools. As a bonus at the end, 3 more companies that could soon appear on this list.

Boutique or portfolio?

Even if we are not talking about the manufacturers of boutique tools today, a brief word on the trade-off between the approaches. As is so often the case, the question is how easy it is to integrate the tools.

Integration with portfolio tools:

• Theoretically, the integration of tools from portfolios is easier, as the manufacturer should have already implemented the integration
• If there are problems, there is only one point of contact
• Manufacturers often also offer suitable services

Vendor Lock-In promises simple integration - but does it deliver what it promises?

Integration with boutique tools:

• Manufacturers understand the importance of integration and therefore offer many interfaces, which promises flexibility
• Manufacturers often use partnerships to mitigate the problem of integration. These can be external service providers who take care of the integration or reseller partnerships with manufacturers of integration platforms
• As a rule, the quality of the product is significantly better than that of portfolio manufacturers. In addition, customers can search for the "perfect" solution without being stuck in the corset of a manufacturer's product portfolio.

It is not surprising that portfolio manufacturers regularly buy up small competitors and add them to their portfolio.

The 6 most important portfolio manufacturers

Here is the list of the most important portfolio manufacturers:

1. Siemens - focus on classic development and PLM

Size: With over USD 70 billion, Siemens is the largest of the portfolio manufacturers considered here. However, this is not entirely fair, as the share of tools is only a part of the group, or rather only a part of the Digital Industries Division, which still generates sales of USD 20 billion has made.

Behavior: Gained attention Siemens 2015, when the company Polarion purchased. After that, there was a lot of turbulence as Polarion competed with its own Teamcenter Requirements. Siemens recently surprised the community by announcing that it would be adding IBM's Rhapsody to its portfolio as an MBSE solution instead of continuing to develop its own tool. This decision indicates that Siemens is flexibly adapting its own MBSE strategy to external developments.

Analysis: Through the partnership with IBM, Siemens is signaling that it does not want to take a leading role in the further development of MBSE tools. Instead, the focus is on providing optimum support for existing and future customers in the CAD and PLM segment and strengthening customer loyalty through strategic partnerships. Cooperation with partners is intended to prevent customers from migrating and facilitate integration into existing Siemens software landscapes.

2. IBM - The platform strategy with OSLC as the key

Size: IBM has an annual turnover of around USD 60 billion. In recent years, the company has focused heavily on software, AI and cloud services and has drastically reduced its hardware division. The share of systems engineering tools in total revenue is difficult to determine precisely, but is estimated to be a comparatively small percentage.

Behavior: IBM has always worked closely with partners that the company has tried to bind via open key technologies. This happened about 20 years ago with the development of the Eclipse platform, and later with the development of Open Services for Lifecycle Collaboration (OSLC). OSLC is just beginning to gain a foothold. IBM uses OSLC for the "seamless" connection between its MBSE tools, but also tools from other companies. IBM does not see systems engineering as a core business, but as part of a much broader software and cloud portfolio.

Analysis: IBM pursues a strategy of platform building and integration. No other vendor anchors OSLC as a strategic instrument to master the platform, not just the tools it contains. This strategy is designed to help companies combine their digital twins and AI-driven decision making with MBSE methods.

3 PTC - The browser as an integration platform

Size: PTC is a major player in product lifecycle management (PLM) software with annual sales of around USD 2 billion. The company has regularly reinvented itself, with a major IoT initiative (Thingworx-acquisition) in 2013 and for several years with a relentless focus on cloud technologies and SaaS models, particularly with the acquisition of companies such as Onshape, Codebeamer and Arena Solutions.

Behavior: In recent years, PTC has consolidated its position in MBSE and systems engineering through strategic acquisitions and partnerships. An important step was the integration of Windchill with MBSE methods to enable end-to-end system development. PTC also works closely with external partners to make its solutions compatible with standards such as OSLC and to provide an open platform for systems engineering.

Strategy: PTC is pursuing a hybrid strategy of organic growth and acquisitions to expand its portfolio of systems engineering tools. By closely integrating MBSE with PLM and IoT solutions, PTC is positioning itself as a provider of an end-to-end digital thread strategy. The company also focuses on tight integration of its tools into existing cloud environments to facilitate digital transformation for customers and create long-term dependencies.

4 Dassault Systèmes - Customer loyalty through end-to-end digital development

Size: Dassault Systèmes has an annual turnover of around USD 5.7 billion. The company is primarily known for its 3DEXPERIENCEplatform, which offers end-to-end integration of CAD, PLM and MBSE tools. With strong market positions in the automotive, aerospace and medical industries, Dassault Systèmes has a broad customer base and a diversified product portfolio.

Behavior: Dassault Systèmes pursues a strongly integration-oriented strategy and relies on a close link between its MBSE tools and its own CAD and PLM products. The continuous expansion of the platform through acquisitions such as No Magic (MagicDraw, Cameo Systems Modeler) shows that the company is systematically expanding its expertise in systems engineering. Dassault is positioning itself as a provider of a fully networked, model-based development environment - a classic portfolio company.

Strategy: Dassault Systèmes' strategy is to offer an end-to-end solution for digital product development and MBSE. With the acquisition of MagicDraw in particular, it has attracted attention in the MBSE sector - which it is exploiting mercilessly. Through the deep integration of its tools, Dassault creates long-term customer loyalty and makes it difficult to switch to competing providers - even if open standards such as OSLC are of course supported.

5th Ansys simulation specialist with growing system modeling ambitions

Size: Ansys has an annual turnover of around USD 2.1 billion. The company grew up with physical simulation tools used in industries such as automotive, aerospace, electronics and healthcare. Tools for MBSE and software came later.

Behavior: Ansys is also continuously expanding its portfolio through acquisitions, albeit often with a focus on Simulation. However, MBSE models can also be simulated, which makes sense for the expansion in this direction, which began in 2012 with the acquisition of Esterel Technologies.

Strategy: Ansys is a mixture of portfolio and boutique company. It systematically builds a portfolio in the area of simulation, but embeds this in any development environment. Through partnerships with PLM and MBSE providers, including Siemens and Dassault Systèmes, Ansys ensures that its simulation solutions are integrated into the entire development process. Ansys is trying to make itself indispensable in systems engineering through system simulation.

6 Altair Engineering - Simulation and AI as drivers of system development

Size: Altair Engineering has an annual turnover of around USD 532 million with a focus on simulation and, for a while now, AI.

Behavior: Like Ansys, Altair has a strong focus on simulation and optimization. The company has developed and acquired numerous specialized software solutions for computer-aided engineering (CAE). Well-known tools in Altair's portfolio are Altair HyperWorks, Altair Inspire and Altair SimSolid, which facilitate simulation-based development and structural analysis.

Strategy: Altair Engineering's strategy focuses on integrating simulation, data analytics and AI into the product development process. Altair is also investing in expanding its MBSE offering, supported by tools such as Altair Activate and Altair Compose, by integrating model-based development methods into its simulation and optimization tools. However, these tools do not support SysML.

Maybe soon

There are some portfolio manufacturers that do not currently have dedicated systems engineering tools in their portfolio but have the potential to penetrate this market. These companies already have related technologies or market access that could facilitate expansion into systems engineering. These include:

• Bentley SystemsFocuses on infrastructure engineering and digital twins. The existing expertise in Building Information Modeling (BIM) and digital simulations could be used as a basis for an expansion into the area of Model-Based Systems Engineering (MBSE).
• Autodesk Inc.Autodesk is known for its CAD and PLM solutions. By integrating systems engineering methods into existing design and simulation software, Autodesk could create a comprehensive digital development environment that meets the requirements of complex system developments.
• RenesasOriginally with a focus on semiconductors and embedded systems, the company fell through the (indirect) Acquisition of Valispace on. It is thus opening up in the direction of requirements management and system modeling. In the medium term, Renesas could develop into a provider of a holistic development platform.

Conclusion

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Updates

This article received a lot of feedback. Here I collect the feedback I received:

• The SE capabilities of Ex-Valispace now run as "Systems and Requirements Portal" under the brand Altium365. There will also be links to Renesas software products; but Altium (not Renesas) will be the brand under which the engineering software will run. (Thank you Marco Witzmann)
• Mathworks is another interesting company that is currently on the borderline between boutique and portfolio manufacturer (thanks Daniel Siegl)

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