What is PLM Software Associated Cost?

by Oleg on November 6, 2011 · View Comments

Buying enterprise software is different experience from busing consumer goods or even automobile. Direct cost (licenses) is very often is a small fraction of the overall cost. So-called Total Cost of Ownership (TCO) is combined from multiple elements – licenses, maintenance and support, implementation, etc. Few days ago, I was reading an interesting article in Redmondmag.com – Study: SharePoint cost high due to inadequate skills. The article is talking about what is the associated operational cost of SharePoint. I found the following numbers in research made by Osterman Research interesting:

The average cost to manage SharePoint is $46 per user per month, according to a “State of the Market” study by Osterman Research, which surveyed “more than 120 IT executives, managers, and staffers at mid-to-large enterprises.” The study, conducted via an August survey, was commissioned by Seattle-basedAzaleos Corp., a provider of management services for e-mail, collaboration and unified communications, based mostly on the Microsoft stack.

What is my conclusion? Actually no conclusion today. I wanted to ask your advise. SharePoint is obviously not a PLM system. However, the nature of problems SharePoint is solving for many organizations is very similar – content management and collaboration. I was thinking about some comparison and tried to find similar numbers for PLM systems. What is the cost PLM system operation? What does it included? Is it a meaningful component of your PLM operational budget?

Best, Oleg

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  • beyondplm

    It sounds like competing with TeamCenter (or any PLM) requirement management. Is it so?

  • J Redmile

    I agree with Rahul. Trying to capture a cost to manage a PLM solution depends on alot of different factors and the complexity its installed within your organisation. Even if a cost was concluded how meaningful would it be to another organisation doing something slightly different.
    I'll look forward to seeing more on this as and when a solution is published.

  • beyondplm

    J Redmile, Thanks for commenting! However, the inability to overcome this complexity is one of the reasons, in my view, PLM is still complicated and underused product. Just my thoughts... Oleg

  • Rahul Deshpande

    Oleg,

    This is a very complex topic to tackle. We can't have single cost which will come for maintaining PLM. It depends a lot on which is the base technology. 

    The PLM systems which has desktop based software needs more support efforts compared to a web based PLM system. Other factor which affects is the level of customization. 

     cost of support is very high in first few months of new implementation or major upgrade & it tappers down over time. Generally following are the items which are covered by support
    1. License management
    2. User Management
    3. User functional support
    4. Data corrections 
    5. Database & application server management
    6. Hot fixes
    7. Bug fixes
    8. minor upgrades
    9. minor enhancements

    There are many small items which are covered by support, but the list fives a high level view

    Rahul Deshpande

  • beyondplm

    Rahul, I agree with you - it is a complicated story and all components you've mentioned needs to be included. However, my question is about what are the guidance for PLM associated cost for different products? What can be considered as a "normal" and what is "beyond normal? I think, absence of these numbers makes things even more complicated... Just my thoughts. Oleg

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