Engineering.com article Success at Microsoft and Airbus: Can Aras Battle Their Way into the PLM Big Leagues? is raising multiple questions about the status of PLM (or more precisely cPDM) competition. Top vendors in this space are remaining the same for the last 10-15 years and according to current analytic researches nobody can reach the level of these companies and products in a foreseeable future.
After 15 years with the same few dominant players, aren’t there any new ones that can seriously threaten Dassault Systèmes, Autodesk, Siemens PLM, IBM, PTC, Oracle and SAP PLM? Is this competitive playing field to remain constant for the foreseeable future? Or could the present age of disruptive technology and platform development change all that?
A simple answer to these questions would be a plain, “No”. The PLM market is characterized only by very big or very small companies. The area in between is virtually non-existent. There are challengers who are working hard to take the field, but so far the progress is slow. According to statistics from CIMdata, there are no competitors which, on a short-term basis, can threaten the longstanding hegemony of big players from an overall PLM suite perspective.
At the same time, article brings the focus into few companies that potentially can break the wall of competition. According to the article the potential of Aras is interesting, especially after bringing new high profile deals (Airbus, Microsoft). Autodesk Fusion Lifecycle (fka PLM360) can leverage the power of Autodesk. PropelPLM (which is recently announced $4.5M financial round) can potentially leverage the infrastructure provided by Salesforce.com.
The article and questions raised by Verdi Ogewell made me think about some of previous ways used by PLM companies to build a competitive blocks. So, here is my list of PLM mousetrap helped PDM/PLM companies in the past 10-15 years:
1- CAD support
To integrate PDM/PLM system to CAD system and use design data as a starting point in PLM process is important. It was one of the most visible strategy to lock customers in the past decade. Proprietary CAD APIs, partnership, CAD release changes – all together these things have contributed to the stickiness of PLM solutions to CAD and complexity of bringing a replacement for existing PDM /PLM systems.
2- Large and long time manufacturing programs
Manufacturing lifecycle provided a natural way to lock customers to a specific solution. If you sell PLM software to aircraft manufacturer to be used with one airline programs, aircraft manufacturer will probably keep you busy for the next 10-20 or even more years. Aerospace manufacturer won’t switch into an alternative PLM software in the middle of a program.
3-Customization and version support
One size doesn’t fit all. Manufacturing companies built a substantial set of customization and specific solutions based on existing PDM/PLM infrastructure. Nothing wrong with that,but these customized and home grown solutions are significant work that needs to be replaced if you want to jump a ship and move to another system. It is not a simple barrier for other PLM vendors to pass.
4- Enterprise Integration
To connect PLM system to other systems in manufacturing, procurement, supply chain, panning is a complicated task. Once done, it is another way to lock-in customer and keep it from moving to another solution.
Existing PDM / PLM business models are using mostly perpetual licenses. These license cost is a contributing factor to prevent customer from moving to another vendor. This is can be significant for smaller companies and less important to very large companies spending a lot on customization, integration and maintenance.
Engineering.com article raised questions if Aras has built a better mousetrap compared to Enovia, Teamcenter, Windchill and other PDM / PLM solutions? Another question from the article – will newcomers in PLM space such as Autodesk and Propel PLM can compete with big PLM providers and take a significant portion of market share over the time. And the last one – will new Product Innovation Platform strategies can create a better mousetrap to move manufacturing companies away from existing products and vendors.
… the effects of the digitization trend, new technologies and the development of Product Innovation Platforms (PIP)—which is global and covers all industry sectors—can change things faster than expected. Platforms like the Cloud and technologies such as IoT and M2M, combined with quickly changing consumer patterns pointing toward the product-as-a-service direction, have the power to induce transformation.
What is my conclusion? Industry keeps the about large companies have missed significant industry trends that cost them to lose industry dominance. Will open source, Innovation platforms, cloud, or something else help newcomers in PLM world to outgrow and displace existing top PLM players? It didn’t happen in the past 10-15 years. What structural and technological changes can help future competitors to leapfrog existing vendors? These are good questions to ask and hope to provide some answers in my coming blogs. Just my thoughts…