Dassault Buys IBM's PLM Software Distribution Activities

Dassault Systèmes has signed an agreement to acquire IBM's sales and support force for Dassault's PLM (Product Lifecycle Management) software for about US$600 million, the company said on Tuesday.

Seven hundred IBM employees will move to Dassault as a part of the deal. The French company will also inherit the support contracts for 1,000 PLM customers.

Dassault is known mainly for its CATIA (Computer Aided Three-dimensional Interactive Application) product, which is used for computer-aided design, manufacturing and engineering.

The cash transaction is expected to close in the second half of 2010, assuming regulatory bodies approve the deal, according to a statement.

Integrating the companies' PLM operations will benefit customers by giving them a simplified support processes, Dassault said.

For large accounts, IBM wasn't entitled to provide support for Dassault's full PLM portfolio. For users, not knowing which company was responsible for what could create problems, according to Laurent Couillard, Dassault's vice president in charge of PLM Value Selling in Europe, Middle East and Africa. If the deal goes through, customers will get a one-stop shop, which is something they have been asking for, he said.

The integration of the IBM sales force and other business operations will involve the largest investment in Dassault's corporate history.

That Dassault will no longer be backed by the IBM brand in the same way as before doesn't bother Couillard. The company switched from IBM to resellers for indirect sales three years ago, and that has gone well, he said.

The deal will let the companies focus on what they do best, according to a spokeswoman at IBM. For IBM that includes focusing on its hardware, software and services.

However, the two companies will still work together on moving PLM software into the cloud, according to IBM. The plan is also for Dassault to become an IBM Global Alliance Partner.

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