For decades, marketing strategies have been telling companies to differentiate. From startups to large enterprise companies, the ability to differentiate product offering and market position was considered as one of the key element to success. Because if you do the same as your competitors do, the only thing that left you is price. Price competition can bring everyone’s margin to zero, but sometimes even below zero. The last one in the situations when wining a customer is more important that make a profit.
AdvancedManufacturing article A New Approach to PLM? brings an interesting read to all PLM industry people looking for an alternative to a status quo of big 3 PLM players – ENOVIA, Teamcenter and Windchill. The article brings two main differentiation factors – flexible data architecture and free open source business model. I’ve made a detailed comparison of Aras differentiation factors last year. Check my last year article. I found these two factors very much consistent with my earlier conclusions.
In the world of PLM, the differentiation is tough. Everyone claims to be a different. But the question is really how different is each PLM platforms and solutions. Here is one of my takes on the problem of differentiation in PLM. Dig inside every PLM implementation. You can find it surprisingly similar. It comes down to three main components – (1) Design CAD data management; (2) BOM, configurations; (3) Change management. Different technologies were created in a different time. New user interface is nicer than one that was created 25 years ago. New administration tools are simpler. Cloud was a short time differentiation few years ago, but PLM vendors played catchup by mixing technology and marketing to close cloud differentiation gap. PLM companies are innovating in technologies, open source, business models and marketing. But, after all, customers are looking how to solve 3 problems I mentioned above. And most of mature solutions related to these specific problems are very similar.
Status quo is a big challenge in manufacturing software. It is hard to compete with existing PLM platforms already deployed in manufacturing. Inertia of manufacturing companies is well-known factor. Changes are slow and problems are staying around for a long time while PLM IT teams are looking for alternatives. And the ROI seems to be one of the biggest factors. 10-15 years ago article shared by Allan Behrens of Taxal is a good reminder about an importance of quick ROI. Read more here – PLM: evolving tools for an evolving market. My favorite passage is about ROI and scaling.
….either point solutions or more full-blown PLM – to spread to SMEs at anything like a significant rate, the software vendors and their products and marketing messages are going to have to reflect recognised basic issues more clearly and, just as important, deliver short-term ROI. Which, as Behrens intimates, is a challenge for the likes of PTC, UGS and Dassault. “They’ve got a big scaling issue.”
Five years ago I published an article about Aras PLM plans to take over big 3 PLM vendors – Aras PLM lines up against ENOVIA, Teamcenter and Windchill. Since then, I had a chance to see a number of publications speaking about Aras wins. Some of these publications happened over the past year – Airbus and Microsoft made me to think about Aras PLM momentum and future trajectory of Aras PLM development. I can see 3 elements that combined together made Aras PLM as of today: (1) technical platform; (2) timing and (3) quick ROI.
1. Technical platform.
Aras got very lucky to keep the development of PLM platform without being influenced by M&A activities. In the world of PLM, I can call Aras as “the newest old platform”. The roots of Aras PLM platform goes back to 2000s. I will use the description provided in Aras press release from 2002 – Aras announces the first true internet PLM software architecture.
Innovators self-describing system and use of run-time logic are radical departures from conventional enterprise software architectures. Total Cost of Ownership is drastically reduced because all of the business rules, data definitions, screens, and data structures are stored as XML in a standard relational database along with the data. Then, Innovator interprets the XML at run-time. Traditional enterprise applications require software developers to code, compile, and link system objects making customization, integration, and technology migration time consuming and costly. The use of run-time logic enables real-time prototyping. Business rules, screens, fields, and even data structures can be changed in real-time by editing the XML definitions rather than compiling or linking object specific source code. As a result, tailoring, integration, and roll out of the Innovator Application Suite occur 5x faster and cost 5x less than conventional systems. Then, once in production functionality can continuously be enhanced to meet evolving customer needs
This is a consistent with what Aras calls “model driven architecture”. Aras platform remained under the control of CEO and founder Peter Schroer which kept this platform unchanged. Aras engineers are enjoying not be distracted by platform and technology consolidation activities and the need to support legacy platforms. You can think about it as a heaven place for any engineering manager.
At the same time, I called Aras platform “old” because as many other PLM platforms it is built on top of relational database (MS SQL Server) as ORM (object relation modeler). You can check for more details of my 4 years old conversation with Peter Schroer. Aras PLM has probably the cleanest implementation of ORM in PLM industry as of today, but it is still RDBMS based architecture.
Timing is a big deal in enterprise software. Aras PLM platform came into mature state when many manufacturing companies in the world felt “struggling” too much with existing PLM software. The struggle came in many aspects – 1/ failed migrations from old version of PLM implementations; 2/ complexity to expand PLM platforms outside of engineering; 3/ high cost of PLM projects. As a result, the number of problems in existing PLM implementations created a perfect storm for Aras PLM.
3. Quick ROI
Aras PLM can deliver quick ROI created by business model – a combining of free license with subscription. Aras claims a very unique element of subscription – free upgrade service. The latest was like a dream come true to all manufacturing companies stuck in release lock using old PLM platforms. Aras PLM supported agile approach by delivering small “projects” expanding or replacing existing PLM implementation for a very low cost and short time. Every PLM manager in manufacturing companies is looking for success stories like that and Aras PLM gave it to them for a very reasonable price.
What is my conclusion? Aras got a moment. Now what? This is a time for Aras Corp to turn it into sustainable growth. And now things can get interesting for Aras PLM. Enterprise sales proven to be an expensive adventure and Aras is clearly going after high profile enterprise customers. Aras will have to look how to keep the same attractive ROI and to create enough profit for enterprise sales and technology development. Last but not least – it is a time for Aras to demonstrate effectiveness of Aras upgrades from both technology and cost perspective. It is going to be a real test for Aras PLM differentiation factors in the next few years. Just my thoughts….
Want to learn more about PLM? Check out my new PLM Book website.
Disclaimer: I’m co-founder and CEO of openBoM developing cloud based bill of materials and inventory management tool for manufacturing companies, hardware startups and supply chain. My opinion can be unintentionally biased