Proprietary file formats are actually a double edged sword. CAD software vendors use them to lock their customers into using their software. MCAD vendors are notorious for doing that. If the customer is a major account like an automotive or aerospace company, this has a cascading effect. Their entire supply chain is also forced to fall in line. On the flip side, when greater forces come into play, these same proprietary file formats may come back to bit them, as Dassault Systemes is going to find out shortly.

Automotive News is reporting that Chrysler will replace its thousands of seats of CATIA with NX from rival Siemens PLM. This is part of the process of falling in line with Fiat, its new owner which uses NX. Chrysler has used CATIA for over 20 years. In fact, CATIA had replaced the drafting boards at Chrysler. So this is as big as it gets. The man behind all of this is Sergio Marchionne, the CEO of Fiat, who is also the CEO of Chrysler. This is basically a done deal. In fact, the change has already started to take place. Fiat has already started using NX and Teamcenter to develop the North American versions of the Fiat 500.

So why exactly is Marchionne doing this? Last week he re-emphasized that Fiat and Chrysler will undertake a unified product development process by which Chrysler will get access to Fiat’s small car technology and Chrysler would get access to Fiat’s large car and truck technology. At the heart of all this technology is the design data and the format that it is stored in. More importantly, the extent to which it can be used effectively across the entire supply chain.

I doubt Marchionne is moving to NX because he thinks CATIA is an inferior product or because he does not want to take his CAD software on the cloud, although I think he may have squinted at the latter. He is doing this because of the same reason Chrysler’s suppliers found themselves compelled to shell out large amounts of money to pay for CATIA licenses – to avoid problems in data exchange and design collaboration. If CATIA and NX could play nice with each other, all this pain of moving to another CAD system would not be necessary.