"We've taken our PLM business and we are getting it set up to run it autonomously," says Tony Affuso, president and CEO of UGS PLM Solutions. "Changing the name is another transition on the way to becoming an independent company."
If EDS does sell off a minority stake in the subsidiary, that will take the business back to the days when much of it operated independently. EDS built up its product life-cycle-management business back in 2001 by acquiring and combining two companies, Structural Dynamics Research Corp. and Unigraphics Solutions Inc.
A spin-off also would be in line with EDS' new chairman and CEO Michael Jordan's strategy to keep EDS, which has seen hard times in the last year, focused on its core business in IT services.
According to ARC Advisory Group, the market for product life-cycle-management software and services is expected to grow from $6.3 billion this year to $14.1 billion in 2007. EDS has long been a leader, competing heavily with rival IBM. The name change and the courting of outside investors could be a good move. Affuso says it will enable PLM Solutions to be more agile, make quicker decisions, and more effectively leverage the organization's heritage as an independent software maker.
Industry analysis firm Forrester Research agrees. In a research note released last week, the firm says the move will give PLM Solutions "operating freedom" that will appeal to customers who want to use the company's Teamcenter PLM suite of software, but use an EDS competitor such as BearingPoint for implementation.