COFES, Microsoft and Engineering Software Business Models

COFES, Microsoft and Engineering Software Business Models

COFES is a think tank for engineering software. This is a place where you can drop any idea and see if it resonates. One of the COFES sessions is so called Maieutic Parataxis session. Think about pitching your idea in front of 300 people. You can see a sequence of 7-10 pitches from people compressed in a row. This is what Maieutic Parataxis is about. Last year I shared the story about Simon Floyd of Microsoft talking about PLM Excels: COFES, Maieutic Parataxies and PLM Excels. This year Simon came with a new idea of future business models for engineering software. Some of Simon’s slides and observations were resonating with my previous thoughts about PLM software business models. About a year ago, I wrote about Faltered Licenses and Future PLM Business Models. I talked about Subscriptions, Advertising and Reverse models. Take a look on Simon’s slides and make your opinion.

What is my take on this? The engineering software is changing slowly. The dynamics are different from the consumer market where the idea of market pace was realized and succeed. I can see multiple reasons why it happens. The most important reason is what I call “a good enough” principle. Traditional manufacturers are very conservative. Software is just a tool for them to produce the result. Existing software can run these companies for years. At the same time, I can see signs of changes. There are two main reasons, in my view: cost and competition. In order to compete on the market, companies need to find more efficient software to get a job done. Engineering software market place can offer a diverse set of tools that can be used. However, the compatibility of these tools, data access and many other reasons can potentially lay down this idea. Leading companies in this space are thinking about market place and application granularity. I think next 5-7 years can show the potential of the realization of this model.  Just my thought…

Best, Oleg

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  • http://pulse.yahoo.com/_6557CY6JH74QJG2Q7BYEH4DFMY Nawalkumar B

    Lot of changes will happen over next 7-10 years. Not because of technology but because Companies start realizing the boomers are retiring. In traditional companies, there is a very large percentage of boomer population. Most of the knowledge is in their heads. it needs to be captured before they walk out of the door.

    Techonlogy will a role of facilitator rather than a change agent.

  • Jonathan_Scott

    Lots of interesting ideas, Oleg. It makes me think about my company’s business model (consulting).

    One of the threats to traditional PLM consultants today is the move by enterprise software vendors to make their applications available on the cloud (thus limiting the work required to deploy them). However, on the other side of things is the notion that so many “point” apps will become available in the next 3-5 years that businesses won’t know which apps to take, or how to collect them in a way that optimizes their business. So I think there is still hope for consultants in this changing market.

    Right now, I am wondering what will motivate enterprise software vendors to adopt standards which will enable all of these point application “tie-ups”. Regardless, I am excited about the flexibility and accessibility that I believe these changes will fuel. As a society, I think we are better off when more people can tap into their inventive side and make the things that will make their lives better – and I feel that’s where we’re headed.

  • beyondplm

    Nawalkumar B. Thanks for your comment! Agree with our observation. Technologies will need to help companies to overcome aging work force retirement. My opinion… Best, Oleg

  • beyondplm

    Jonathan, thanks for your insight! I hope you read one of my posts few weeks ago – http://beyondplm.com/2011/03/01/will-plm-channels-survive-the-cloud-era/. I don’t think mass migration to the cloud will kill consulting business. Remember mainframes? Movement to PC/Windows kept consultant business alive. So, I expect the same here. Also, what you call “tie-ups” is something nobody really understands these days. However, it is indeed inspiring. My thoughts… Best, Oleg