Autodesk Targeting PLM Users in SMB with Upchain Acquisition

Industrial software provider Autodesk has announced its intention to purchase Toronto-based cloud product life cycle management (PLM) supplier Upchain. The acquisition price is not publicly available but is expected to close by July 31, 2021.

Competitive pressures to effectively launch and manage new products will fuel spending on PLM software to be worth US$5.8 billion in 2026. Digital transformation necessitates that manufacturers connect their data sources together in order to effectively launch and manage products, and PLM software is a key application for connecting and sharing data among disparate parts of the manufacturing value chain (design, engineering, manufacturing, quality management, marketing, supply chain, etc.).

SMBs are moving away from paper-based solutions and looking to formalize product planning processes but traditional PLM systems can appear too complex. For Autodesk, acquiring a firm that focuses on the small-to-medium business (SMB) segment in Upchain adds to the company’s installed base in this segment of the market. Autodesk is not the only large PLM supplier targeting the SMB segment via acquisition; PTC acquired Arena solutions in December 2020 (IN-6024).

Upchain’s premise is to provide customers with the data required wherever they are via Upchain’s unified cloud platform in order to, for example, simplify how engineers and manufacturing staff collaborate to launch products. Upchain PLM overlays existing solutions that a customer may have (Upchain has plugins for providers of computer-aided design (CAD) software and corporate software applications) and enables them to move product data to wherever it’s needed via built-in application program interface (API) integrations. Upchain looks to help customers to "Connect the Chain”, not only thanks to the cloud architecture but also the user experience and implementation methodology.

The acquisition will help Autodesk to target smaller manufacturers, which typically prefer out of the box software applications that can reduce complexity. The two firms are complimentary from a vertical market perspective with Upchain strong in the consumer-packaged goods and hi-tech sectors, while Autodesk’s PLM strength lies in serving the needs of the automotive, heavy equipment, and electronics sectors. The two companies channel partners differ, and Autodesk will look to promote Upchain’s capabilities in the Asia-Pacific region, a location where Upchain has few clients.

Upchain is Autodesk’s fifteenth acquisition since 2017, with the company looking to add expertise in cloud platforms and individual verticals. Already in 2021, Autodesk announced its first US$1 billion acquisition with the purchase of Innovyze. Based in Portland, Oregon, Innovyze looks to help the water providers to model and manage water supplies.

Both Autodesk and Upchain are profiled in the PLM Software Competitor Ranking (CA-1307) that was published earlier in 2021.

Upchain’s ability to enable customers to move data seamlessly can alleviate the risk of data siloes. Furthermore, Upchain’s open data approach can support customers’ looking to integrate PLM data with other industrial software applications, but more importantly will contribute to Autodesk’s strategy of offering cloud-based end-to-end design and manufacturing platforms. Autodesk customers can expect to see enrichments of integrating Upchain with Fusion 360 during 2021.

More and more companies are looking to PLM software to help them create a digital thread of their operations and the acquisition of Upchain will help Autodesk to support this objective. Autodesk achieved the highest score for data collection in the PLM software competition, ranking with Fusion Lifecycle 360’s ability to integrate with computer-aided manufacturing (CAM), electronic CAD (ECAD), computer-aided engineering (CAE), procurement software, manufacturing execution systems (MES), customer relationship management (CRM), and enterprise resource planning (ERP) applications. Autodesk already looks to provide clients with a centralized hub for managing product data management, conducting generative designs, and supporting new product launches.

Autodesk’s Upchain acquisition, and PTC’s of Arena solutions, is evidence that vendors now want to help smaller manufacturers digitize processes to develop digital threads and create virtual representations of their new product designs. Autodesk will be focusing in helping smaller manufacturers to not only manage data in PDM but manage their product related operations.

Autodesk is looking to be the hub for SMB’s product launch activities with the inclusion of pre-defined templates, connectors to CAD solutions such as NX, Creo, SolidWorks, and also corporate applications like SAP and Oracle. This proposition should appeal to SMBs who often lack the resources to create the integrations themselves.