A blog by Oleg Shilovitsky
Information & Comments about Engineering and Manufacturing Software

Manufacturing Companies and SaaS Business Opportunity

Manufacturing Companies and SaaS Business Opportunity
Oleg
Oleg
11 January, 2011 | 3 min for reading

I had a chance to watch Jason Green’s video interview by TechCrunchTV Sarah Lacy. Take a time, watch and make an opinion. I found interesting to listen to Valley VC, which is strategically focusing on cloud and enterprise opportunities. This is not a common trend, in my view.

This is not a first time I’m writing about a cloud opportunity in the manufacturing market. Navigate your browser to few of my following “cloud posts” if you had a chance to miss them: PLM and Cloud: Hold the Promise? and PLM and Pragmatic Cloud- Do Less. However, this video made me think about few interesting trends I wanted to share with you.

B2B and Cloud Services Trend
One of the important trends I can see in the enterprise cloud market is the development of B2B cloud services. Why it is interesting, in my view? It provides an alternative way to just pushing enterprise customers with enterprise product suites converted to the “cloud or SaaS model”. Business Services can become an interesting and disruptive approach for enterprise market.

PLM on the Cloud
I have a mixed feeling about PLM and Cloud. Definitely, few mindshare vendors already made (or planning) to make plans for cloud offering. The top two companies here are Autodesk and Dassault. In the past, PLM industry had few companies moving towards SaaS/On Demand. Arena Solutions as well as PTC/IBM bet on their future with Cloud/SaaS infrastructure. The biggest problem I can see in this domain is the replication of existing products, portfolio and plans to the cloud. This is not how I can see manufacturing and engineering software need to be developed.

Bottom Up Approach
I can see an interesting opportunity in development of manufacturing services, which has an opposite philosophy to the current mindshare PLM and ERP vendors. Existing enterprise and PLM models are very top-down oriented and assume a significant agreement about how a system needs to be implemented and how data need to be managed. Development of business services can be an interesting approach to provide an alternative solution on the market.

Freemium Business Models
Another aspect of SaaS and Cloud business is in implementing new  business models. Freemium is one of them. Normally, people see “Free” as an option that can be used only for a consumer market. The complexity of enterprise implementation and high potential cost of free services, it seems to be a wrong option. However, I can hear Jason is talking about 10-15% convergence rate in enterprise freemium models. It can shake business modeling canons and create a significant opportunity in the market.

What is my conclusion? Thinking about PLM Reset 2011, I can feel it is a time to re-think common practices of SaaS applications. Companies have tried to replicate existing software and shift the delivery towards the cloud. This is a wrong approach. The biggest potential of cloud will be in the combination of new approaches, technology, delivery and business models. Just my thoughts…

Best, Oleg

Recent Posts

Also on BeyondPLM

4 6
6 December, 2012

Have you heard about OWA (Open World Assumption)? If you completed your Math 101 and Mathematical Logic time ago, refresh...

5 November, 2012

Product cost. Talk to any manufacturing company in the world and they will tell you that cost is one of...

20 May, 2016

When was the last time in the morning you woke up and said – I need to buy some PLM...

13 December, 2011

Manufacturing business become global even for very small companies these days. It is not unusual to see a company of...

14 August, 2009

SOA is a very oversold article these days. Even if, I think, social media and cloud successfully over hyped SOA during...

29 September, 2015

Mass production involves making many copies of product, very quickly for lowest possible cost. It is all about producing standardized...

14 July, 2009

At its Worldwide Partner Conference in New Orleans, Microsoft released a preview of Office 2010 and Visio 2010 to all...

2 June, 2017

Existing data management paradigms were formed for the last 20-30 years of software development in CAD, CAM, CAE, PDM, PLM...

19 April, 2012

One of the sessions I especially liked during COFES 2012 was a keynote by Richard Riff – The Intersection of...

Blogroll

To the top