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28 September 2005

UGS Expands its Product Lifecycle Management (PLM) Leadership in the Mid-Market; First Company to Bring Enterprise-Level PLM to Mid-sized Manufacturers

FOR RELEASE Wednesday, September 28, 2005

CINCINNATI – UGS Corp., a leading global provider of product lifecycle management (PLM) software and services, today announced an aggressive and industry-changing strategy to serve the high-growth mid-market -- focused on delivering enterprise-level PLM technology to the mid-market in an easy-to-deploy portfolio. The new UGS strategy delivers revolutionary PLM technology to transform the process of innovation – without the need for extensive IT support – for low total cost of ownership.

UGS made the announcement at the 2005 Solid Edge User Summit and Executive Symposium, which began today and runs through Friday. Solid Edge® digital product development software is part of the company’s new mid-market portfolio.

UGS’ mid-market strategy is supported by two key components:

  • The new product portfolio – the UGS Velocity Series™ portfolio. The UGS Velocity Series marks the first offering to combine proven mid-market solutions for digital product development with the unparalleled technology of UGS’ Teamcenter® product line. Built for ease-of-use and fast deployment, the UGS Velocity Series will be distributed and supported through a new Global Channel Program designed to enhance distribution through comprehensive channel partners and exceptional vendor commitment. (See separate release issued today.)
  • The new Global Channel Program. This program focuses on deploying enterprise-level PLM to mid-size manufacturers and provides an unprecedented level of vendor commitment to new and existing partners. UGS intends to leverage this new global channel program to grow its existing global channel partners and ultimately expand channel capacity by 50 percent by the end of 2006. (See separate release issued today.)

“Our PLM leadership position enables us to respond to mid-market needs with a level of technology and channel efficiency unmatched by our competitors,” said Tony Affuso, chairman, CEO and president of UGS. “While we already have a substantial presence in mid-market today with our large installed base of NX™ and Solid Edge® digital product development software, this new strategy expands our leading edge with a world-class PLM solution focused on faster deployment, efficient distribution and low total cost of ownership. Mid-size manufacturers can now leverage enterprise-level PLM benefits to transform their process of innovation and effectively compete with larger companies who often command superior resources.”

Mid-Market Business Drivers

UGS finds that similar to large organizations, mid-size manufacturers face issues of global sourcing, product customization, accurate and timely quotations, program management, integrated design and manufacturing and increased regulatory requirements. While these companies have previously focused on stand-alone design, manufacturing and data management solutions, today they need one integrated PLM product portfolio.

In addition, UGS finds that mid-size manufacturers face an explosion of 3D data but have limited resources to deal with the issues related to this data. For example, most companies have small IT staffs, little or no documented processes, and limited training resources. Until the UGS Velocity Series, these mid-size manufacturers were left to face these issues with isolated products from multiple vendors and no scalability.

According to AMR Research, mid-market is the fasting growing segment in PLM, growing at 12 percent annually. In addition, AMR estimates spending on non-CAD PLM, such as collaborative product data management (cPDM), will drive a substantial portion of that increased investment.

“Our outlook for technology investment among midsized manufacturers is healthy over the next 3-5 years, with several segments growing at double digit rates,” said David O’Brien, vice president, AMR Research. “Small- and mid-sized manufacturers continue to struggle to improve innovation. Most face very similar challenges to their larger counterparts. Technology strategy, and investment, in innovation should enable and support sound business strategy, and a culture of continuous innovation. Mid-market manufacturers are looking for technology investments that are easy and fast to implement, and offer a low risk way of accessing robust technology.”

AMR Research reports that mid-market manufacturing (defined by AMR as companies with between $30 million and $999 million in annual revenues) is the fastest growing segment of CAD/PLM application spending growing at 12 percent annually, substantially higher than the overall market average of 9 percent.

Based on this, UGS estimates its mid-market opportunity (companies with revenues below $750M) will grow from $3.8 billion in 2004 to $6.4 billion in 2009.

Grimes to Lead Global Mid Market and Channel Effort

UGS also today announced that Kerry Grimes would lead the company’s overall mid-market efforts, including building an aggressive mid-market channel. Grimes, who reports to Jim Milton, executive vice president of Sales and Services, comes to UGS from EDS, where he was director of Product Management for Desktop and Mobility Services. Previously, he was director of Channel Operations for the IBM Software Group where he developed mid-market and global channel programs that delivered more than $3 billion of software revenue.

“Kerry is the ideal person to lead this charge because he has extensive knowledge of channel building and product management,” Milton said.  “He also has a comprehensive range of experience, having worked at IBM, EDS, Vignette and at his own hi-tech start-up business.”

About UGS

UGS is a leading global provider of product lifecycle management (PLM) software and services with nearly 4 million licensed seats and 46,000 customers worldwide.  Headquartered in Plano, Texas, UGS’ vision is to enable a world where organizations and their partners collaborate through global innovation networks to deliver world-class products and services while leveraging UGS’ open enterprise solutions, fulfilling the mission of enabling them to transform their process of innovation.

Note: UGS, Teamcenter, NX, Solid Edge, Velocity Series and Transforming the process of innovation are trademarks or registered trademarks of UGS Corp. or its subsidiaries in the United States and in other countries. All other trademarks, registered trademarks or service marks belong to their respective holders.

The statements in this news release that are not historical statements, including statements regarding expected benefits of the product, adoption by customers, continued innovation and other statements identified by forward looking terms such as "may," "will," "expect," "plan," "anticipate" or "project," are forward-looking statements. These statements are subject to numerous risks and uncertainties which could cause actual results to differ materially from such statements, including, among others, risks relating to developments in the PLM industry, competition, failure to innovate and intellectual property. UGS has included a discussion of these and other pertinent risk factors in its registration statement on Form S-4 most recently filed with the SEC. UGS disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

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Dora Smith
+1 314 264 8480
dora.smith@siemens.com