PLM Solutions, Openness and the Aras Business Model

MarcL: Aside from the Aras technology, maybe you can explain a bit more about the Aras business model and the Aras solution suite?

Peter Schroer:

Peter Schroer Aras CEO

Peter Schroer, Aras CEO & Founder

In 2007, Aras took a unique position in the PLM market by adopting an open source business model.   What we’re doing is bringing a Red Hat (NYSE: RHT) business format to the PLM market: get rid of the license costs and just offer enterprise subscriptions. It’s a big advantage for your company for a number of reasons:

Subscription-only gets rid of the big up-front PLM license cost (capex),

It reduces your Total Cost of Ownership (TCO) which means you get a greater ROI and achieve it faster, and

It’s a more balanced relationship where you’re not forced to take on disproportionate risk before you even start implementing.

How we make money

Aras distributes its software without license fees, and earns revenues from optional subscription packages that are similar to the maintenance contracts required by other enterprise software products except with significantly more benefits such as free upgrade services no matter how much you customize – I don’t know any other enterprise software companies that are doing this… it’s a major benefit for customers and commitment on our part.

The Aras subscription gets rid of PLM user and module license fees reducing the risk of acquiring an enterprise PLM system,       and it provides us/Aras with a profitable recurring revenue model.

What we provide OOTB

We have developed a number of solutions ourselves which are included in the initial download of Aras Innovator. These make up our out-of-the-box PLM solution suite.   Our OOTB solutions are similar in scope, scale and depth to the OOTB solutions that come with a Windchill or MatrixOne.  However, our PLM solutions are aligned tightly with industry standards such as ISO, PMI, and CMII. If these standards fit your company’s way of doing business, then the Aras is an “install this morning and start using this afternoon” PLM system.

How we offer more

The corporate community of companies that run Aras, users and partners, what we call the Aras community, has also developed dozens of other solutions on the same Aras Innovator platform framework, and your company is able to take advantage of these solutions for new PLM innovations, best practices and value added enhancements. These are available on the Aras project site if they are open source or from an Aras ISV partner if they are commercial solutions (meaning apps you have to pay for).

Why this all matters to you

The purpose of the Aras project site is to provide an online area where user-driven innovation can occur. We are creating an environment where companies like yours can post ideas, share best practices and take action to transform your business.

We are encouraging secure, self-sufficient collaborative development on PLM solutions because we believe that the next generation of innovation in PLM will come from people like you at the millions of companies around the world that use PLM software every day.

We also believe that your corporate processes are unique and changing constantly thru continuous improvement. And it’s those special practices that make your company competitive. Your company has to be in control of your own destiny and that’s what we are offering.

At the end of the day, what we’re doing is providing your business with a whole series of OOTB PLM solutions on an advanced PLM platform and we use a subscription-only format that’s more cost effective. And we’ve made it highly scalable, flexible and extensible so your company can innovate for new advantages over your competition… we think that just makes sense. In fact, we believe it’s a fundamental necessity and the future of global business.

For more info on this see Open PLM – The Future of Enterprise Product Lifecycle Management (free logon needed) and here’s some more about our commitment to an open business model and how Aras is Different or these videos from my presentation at the Aras ACE International conference.

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