There’s something quite unusual about the business model that Aras follows for their Innovator software when compared to the rest of the PLM world. It’s a fully functional PLM system, free of charge. Download it from the internet, install it and you’re free to go.
This licensing model has appealed to many companies including Boeing, GE Aviation, MAN Diesel, Hitachi, and Xerox to mention a few. Obviously, these large users have vetted the technology. So, what’s the catch?
“No catches”, says the Aras chief.
“There is none”, claims Peter Schroer, CEO and founder of Aras Coporation. “The point is that Aras Innovator is an open source solution. Companies of all sizes can install it and start using it in their environment with an unlimited number of users, without incurring any costs at all”.
The Aras business model looks a lot like the approach that Red Hat used to build a valuable business around the Linux open source operating system:
- Make advanced technology freely available
- Sell optional enterprise subscriptions
- Sell support and customization services
Repeat until world domination is achieved. That’s the “bread and butter” of the business model. However Aras’ Marc Lind, SVP Global Marketing, says that, “consulting for customization, education and other services are less than a third of our revenues. We do not consider the services revenues key to our growth”.