News Story by Linda Rosencrance

DECEMBER 22, 2005 (COMPUTERWORLD) - Nissan Motor Co. has signed a deal with UGS Corp., a vendor of product life-cycle management (PLM) software, to design and build its next generation of vehicles.

The value of the agreement was not disclosed, but one analyst said the deal could ultimately be valued at more than $100 million over the next four years.

Under the deal, Nissan and its affiliates will use UGS's PLM systems to design and build its next generation of vehicles, according to the companies. Nissan will deploy the software as part of a fully integrated, common research and development infrastructure within the company, according to a statement.

"The way the technology is helping them to do that is it offers them what they view as the next-generation, system-level approach to do car design," said Bill Carrelli, vice president of strategic marketing at Plano. Texas-based UGS. "So for them this is more than a [computer aided design] selection -- this is a vehicle-development selection [so they can] design and develop cars at a high system level."

Tokyo-based Nissan declined to comment on the deal.

Carelli said UGS's technology will allow Nissan to automatically validate and simulate these vehicles early on.

"So early on in the design process, they'll be able to develop the configurations and have those configurations validated in the digital world ...to make sure the software meets the requirements that they've set out," he said. "Another important piece [of Nissan's decision] is the fact that our technology is known for its openness in the way we've developed it."

Carelli said that's important to Nissan because the software has to be integrated with other technologies within the company, such as manufacturing, technology for procurement and others.

"It will allow them to exchange information and integrate the design information with these downstream systems," he said.

In addition, the technology will allow Nissan to share information with its suppliers and hold collaborative design reviews on a global basis so they'll be able to share information about the vehicles, Carelli said.

"This was a major victory for UGS," said Charles Foundyller, an analyst at Daratech Inc. in Cambridge, Mass., in an analyst note. "We believe the key factors in the decision were UGS's ability to win over Nissan's management to its vision of a PLM infrastructure built on UGS's version of openness."

The struggle for the Nissan account was a bruising and expensive two-and-a-half-year battle, with UGS and IBM / Dassault trading the lead, Foundyller said. Although the companies didn't disclose the value of the agreement, Foundyller said he believes it could ultimately be valued at more than $100 million over four years.