ECM, PDM, PLM, MDM, ERP, CRM… you are familiar with the soup of acronyms used by enterprise software to fight for a place to provide a holistic solution for enterprise manufacturing business. E[E] blog post by Ed Lapotegui speaks about how to put PLM in the box. I like the conclusion- don’t bother stuffing PLM in the box. Soon enough, there will be no box.
For many PLM companies business it is still running as usual. But, I’m sure you’ve heard the news – Google is restructuring under a new holding company name called Alphabet. An official blog post from Google is here – G stands for Google.
What is Alphabet? Alphabet is mostly a collection of companies. The largest of which, of course, is Google. This newer Google is a bit slimmed down, with the companies that are pretty far afield of our main Internet products contained in Alphabet instead. What do we mean by far afield? Good examples are our health efforts: Life Sciences (that works on the glucose-sensing contact lens), and Calico (focused on longevity). Fundamentally, we believe this allows us more management scale, as we can run things independently that aren’t very related. Alphabet is about businesses prospering through strong leaders and independence. In general, our model is to have a strong CEO who runs each business, with Sergey and me in service to them as needed. We will rigorously handle capital allocation and work to make sure each business is executing well. We’ll also make sure we have a great CEO for each business, and we’ll determine their compensation.
Now we can officially speculate if one of the letters in Alphabet will be used by Google to create a company focused of product lifecycle management software. So, does P stands for PLM?… After laughing for some time about the idea, it made me think about Google hardware projects. Seriously… The number of hardware businesses under Google umbrella is growing. Think about products like Nest, Google’s prototype of self-driving cars, running robots and many others. The last year The Verge article – Google is building a hardware empire, and this is what it looks like can give you a glimpse of what is a scope of Google hardware projects.
I’m sure you remember why software is eating the world. We can see the impact of that around us. Here is the thing… software revolution is coming to hardware companies. Another year old article – With software eating hardware, Silicon Valley enters hard time speaks about coming revolution in hardware development. Hardware is becoming more like software:
Thankfully over the last decade, hardware design has become easier and more democratized. 3D printing and better software tools have accelerated the ability of many startups to build their prototypes, allowing them to speed up their product iterations. Early hardware startups now often feel like lean software businesses, with much more interactive product development, thus allowing for more rigorous analysis of product-market fit.
In the past, when it came time to manufacture a product, only the largest companies used to have access to assembly lines in places like China. Minimum order sizes were often completely unaccommodating for startups. But as competition has intensified, custom manufacturing has become easier, and labor costs have risen, manufacturers appear to be more willing to engage with smaller orders, and they have also decreased their average turnaround time, as well.
What is my conclusion? The original idea of PLM came from large defense and aerospace companies several decades ago. Nothing wrong with that – PLM fundamental concepts are reflection of the way large manufacturing OEMs are working. Here is the thing… new manufacturing companies can develop new ways to work – agile, lean, easier, more democratized. It will bring new create new ways to design, engineer, manufacture and build software – different from what we know as of today. PLM acronym can die. We will have find a new letter. Would it be part of Alphabet (Google) soup? I don’t know. But, it is a good time for PLM companies to think about future competition trajectories. Just my thoughts…
Picture credit Bloomberg business article. Illustration by Nick Edwards.