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

Why all PLM software will be SaaS soon?

Why all PLM software will be SaaS soon?
Oleg
Oleg
26 November, 2014 | 3 min for reading

plm-cloud-dream

I’ve be sharing many of my thoughts about how different cloud technologies can be used to implement PLM. Nevertheless, once in a while, I’m also getting comments and questions about acceptance of cloud PLM for large companies. Usually, it comes in the intersection of security and readiness of large manufacturing companies for cloud (SaaS) software.

TechMVP article – The benefits of SaaS transformation: both the obvious and non-obvious shows some very interesting perspective on that topic. Let me go straight to security question:

The second common objection stems from the thought process amongst large enterprise CIOs regarding whether to allow certain applications to live outside of the enterprise’s firewall.  IT managers and executives – sometimes speaking about legitimate security concerns and sometimes speaking to protect their jobs – stand in the way of core applications moving to the cloud via a SaaS vendor.  At the same time, these same decision makers have adopted Salesforce.com for CRM, and allow unencrypted email between employees and non-employees, thus calling into question the sincerity of their argument against other SaaS applications.  The successful adoption of CRM in the cloud has opened the floodgates for virtually all other types of applications to move to the cloud even over the objections of certain IT managers.

Towards this end, we have seen in recent years the advent of ERP (FinancialForce, Workday), Marketing Automation (Eloqua, Marketo), and Software Development or ALM (GIT and Rally Software) in the cloud.  These types of applications manage information that is often considered the “crown jewels” of corporate data, and thus are the types of applications that some thought would never take root in the cloud.

I can observe a significant growth of SaaS software adoption by manufacturing outside of pure engineering domain. You can see software in different categories – ERP, CRM, marketing, project management, software lifecycle management and many others. Imagine manufacturing product with software code managed using GIT? What will be the point to reject PLM system managing engineering bill of materials in the cloud?

Another interesting perspective is related to creation of new software companies. The graph below demonstrate a complete dominance of news business starting SaaS companies.

saasapps

One more data point is coming closer to PLM business and related to implementation of ERP systems. Panorama consulting solutions published an interesting 2014 ERP report, which speaks about type of ERP systems implemented in 2013. As you can see on-premise and hosted system is accounting together for 96% of all systems.

type-of-erp-software-2013

What is my conclusion? I wonder what percentage of new PLM systems implemented in 2014 will be SaaS. The number is probably not very high. However, traditionally, it takes long time to decide about PLM system. My hunch, that broad adoption of SaaS software in other domains will push manufacturing companies to evaluate more PLM systems and make their decision faster than before. SaaS lower risks and upfront cost, which can be an additional factor for manufacturing companies to taste cloud PLM sooner than later. Just my thoughts…

Best, Oleg

photo credit: Robert Hensley via photopin cc

Recent Posts

Also on BeyondPLM

4 6
5 March, 2009

The development of game technologies is taking huge step forwards and is sometimes outperforming product development tools such as CAD,...

16 September, 2013

Application integrations is a complicated topic. Especially when it comes to enterprise. I can confirm decades of different attempts to...

23 March, 2019

I’m coming to Aras PLM event (ACE2019). It has been a long time since I visited ACE event in person. Eight years...

10 November, 2020

Small and medium-sized organizations are very interesting. Their problems are very much similar to the problems of large companies, but...

25 April, 2013

Are you familiar with term “silo”. When it comes to enterprises and large organizations, we often can hear about different...

29 September, 2009

I’d like to think about how to improve collaboration… So, why I’d like to talk about “collaboration” again? We got...

16 February, 2015

[Updated 19-Feb-2015] I’ve been thinking about my blogging pattern this week. Taking time off, it is hard to keep up...

10 February, 2013

To predict future is tough. Not many people are trying to do so. Especially in tech. Companies are juggling with...

8 January, 2016

I learned a new term today – plug-and-produce. The Design News article – Industry 4.0 Will Mean ‘Plug-and-Produce’ and ‘Digital Twins’ by...

Blogroll

To the top