PLM in the Cloud: No Surprise That Arena Acquired Competitor Omnify
Felix Nilsson posted on November 07, 2018 |
What happens when two cloud-based PLM companies fuse their businesses?

What happens when two cloud-based PLM companies fuse their businesses? We might get an answer to that question in the near future, thanks to Arena’s recent acquisition of Omnify PLM. 

The deal itself is unsurprising, since both companies are working in closely related industry segments—high tech, electronics, medical technology, telecom and the like—and both companies use the Cloud as a technology platform.

It should also be noted that Arena, which has offered PLM services since 2000, added investment capital last year from US venture capital firm, JMI Equity. The amount is not public, but it did provide Arena with the capital needed to invest further in market solutions.

Arena acquires competing PLM developer Omnify.
Arena acquires competing PLM developer Omnify.

In 2000, Arena Solutions became the first company to launch PLM in the Cloud. But Omnify wasn’t far behind, introducing its competing solution a couple of years later. Omnify was founded in 2002, and like Arena it offers PLM solutions primarily aimed at electronics manufacturers (EMS) and the high-tech arena in general, though it has customers in several other industries. These customers are often small and medium sized businesses, though this doesn’t preclude OEMs from the list.

Omnify’s software is characterized by ease of use and rapid implementation, combined with attractive pricing, which makes this PLM solution suitable for small and medium-sized product developers and manufacturers who need capable functionalities. However, as emphasized in its press material, the solution is "also is scalable enough to meet the needs of larger companies."

While Arena PLM is only available as a Software-as-a-Service (SaaS) application, Omnify PLM is available in several ways: on-premise, as a SaaS solution or as a hosted cloud solution.

Apart from these differences in how to buy or rent the software, however, overall Omnify has characteristics that could be a blueprint of Arena PLM.

Arena is Strong in BOM and Configuration Management

Notably, neither of these two PLM developers appear in the technology news columns particularly often, yet Arena Solutions is a pioneer in cloud-PLM.

Today, Arena has a broad, integrated all-in-one platform for product development: a solution that combines PLM, ALM for software development, Electronic Design Automation (EDA), a Quality Management System (QMS) and solid features for supply chain collaboration. The special strength of this platform lies in PLM for design and manufacturing in electronics-heavy areas such as high-tech, consumer electronics and medical technology. In addition, the platform offers support for configuration and BOM handling.

Arena doesn’t post any financial revenue figures, but claims to have seen solid growth in recent years, particularly in relation to the increased focus on the manufacturing of Internet of Things (IoT) devices. The fact that Arena recently opened new offices in Austin, Texas and Suzhou, China, might be an indicator of success. The fact that Arena has over a thousand customers in total, including Intuit, Citrix Systems, Nutanix, GoPro, Thermo Fisher Scientific and eBay is another marker of success.

Creates a Significantly Larger Customer Base

That being said, it’s likely that Arena PLM, which is larger than Omnify, aims to consolidate and expand its customer base with the recently announced purchase.  Competing in the same or tangential markets means that customers have so far chosen either one supplier or the other. As a result, there is little overlap on the customer side, and the company will increase in size within the framework of Arena's goals: powerful growth due to the expansion of the development and manufacturing of high-tech electronic products, a market in which they offer support.

The Protocol from TEC's Comparison Between Arena and Omnify

There is an interesting evaluation of each respective company's capabilities made by the site Technology Evaluation Centers (TEC). This study indicates that Omnify's solutions may actually be more effective than Arena PLM’s for some applications. This in turn points to Arena not only gaining access to a larger customer base, but also the potential for a more feature-rich software—provided that the company succeeds in its integration efforts. 

The chart below shows the TEC comparison of Arena’s solution against Omnify PLM.

Compared with Arena PLM, Omnify Empower PLM offers better support for the 1,778 decision criteria that make up the eight sub-modules of the PLM comparison matrix regardless of how these features are offered, whether off the shelf, through an integrated partner solution or through add-ons.

(Chart courtesy of TEC.)
(Chart courtesy of TEC.)

A Resounding Victory for Omnify

The survey examined the following capabilities in each solution:

  1. PLM as core functionality for discrete industries. Discrete industries include those producing cars, mobile phones and medical devices, among other products, as opposed to process-based manufacturing such as oil refining, food and beverage production, and chemical making. The comparison showed that both Omnify Empower PLM and Arena PLM have almost the same coverage of features and functions related to PLM for discrete manufacturing.
  2. PLM as a core functionality for process industries. In this domain, Omnify Empower PLM is clearly more complete than Arena PLM.
  3. Product development and product portfolio management. Omnify Empower PLM scores are significantly higher than Arena PLM’s.
  4. Manufacturing Processing - Manufacturing Process Management (MPM). Omnify Empower PLM gets higher numbers than Arena PLM.
  5. Requirements and “ideation management." Omnify Empower PLM shows dramatically stronger performance than Arena.
  6. Service Data Management. Again, Omnify Empower fares better, "with a surprising lead compared to Arena’s Solution."
  7. Regulatory and compliance. And again: Omnify Empower PLM scores much higher than Arena PLM in the Regulatory and Compliance module.
  8. Application Technology. This round goes to Arena PLM, which scores significantly higher than Omnify in this module.

"A Deal That Strengthens Growth"

The press release pertaining to the deal between Arena and Omnify points specifically to the latter’s major customer base in electronics, medical technology, aerospace and defense and telecommunications markets.

Arena Solutions CEO Craig Livingstone.

Arena Solutions CEO Craig Livingstone.

"Both Arena and Omnify share long success in the PLM market with strong customer orientation and a vision that helps companies achieve their manufacturing goals," said Craig Livingston, CEO of Arena.

From Omnify's perspective, the acquisition by Arena is a welcome change as it creates opportunities for growth. 

"While we have been a highly profitable company for many years, we recognize the need to accelerate our growth and respond to market conditions," said Omnify’s Chuck Cimalore. “We evaluated many options with the goal of finding a partner who appreciates what we have built and shares our vision of the future. With Arena, not only will this goal be achieved, but together we will continue to build an industry leader that can meet the demands of a large number of customers.”

Chuck Cimalore, Omnify.

Chuck Cimalore, Omnify.

Notably, Arena Solutions will maintain support for Omnify’s product range, while exploiting both companies' overall experience for "accelerating the development of future products and creating a way forward for the combined customer base."

An Analyst View

How this will all evolve still needs to play out. Analysis firm CIMdata seems to think that Arena will soon see a whole lot of competition in the midmarket, high-tech “cPDM” space, as more developers push ahead with cloud solutions of their own. A special mention goes to Autodesk’s Fusion Lifecycle and PropelPLM, both of which are gaining traction in the cloud space. However, CIMdata also adds that Arena still has quite a bit of clout and has been adding capabilities at a rapid pace, which will only accelerate with the Omnify acquisition.

It will also be particularly interesting to see feedback about how the integration works between two Cloud players. The purchase also introduces the question of whether Omnify PLM will be combined with Arena PLM, thereby becoming a single product to be marketed—and if so, when will that occur?

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