Shifts in a rapidly changing manufacturing world and dramatic changes internet is bringing to digital economy might become a challenge for large software vendors. We all know almost classical examples of Kodak, IBM and DEC. These new digital behaviors can make existing business models irrelevant. Large software vendors that have remained stagnant with their old-guard ways might struggle to maintain sales and stay relevant with today’s business.
While Bill Gates is still one of World’s 8 Richest, Microsoft these days is different. HBR articles – The Fatal Flaw That Steve Jobs and Bill Gates Shared speaks about long term company strategies and gives some analysis about what Microsoft achieved during Ballmer years.
Despite Microsoft’s remarkable financial performance, Ballmer failed to understand and execute on the five most important technology trends of the 21st century: in search – losing to Google; in smartphones – losing to Apple; in mobile operating systems – losing to Google/Apple; in media – losing to Apple/Netflix; and in the cloud – losing to Amazon. Microsoft ended the 20th century owning over 95% of the operating systems that ran on computers (almost all on desktops). Fifteen years in to the 21st century, 2 billion smartphones had shipped, and Microsoft’s mobile OS share is 1%. These misses weren’t in some tangential markets – search, mobile, and the cloud were where Microsoft users were heading. Yet a very smart CEO missed all of these. Why?
It wasn’t that Microsoft didn’t have smart engineers working on search, media, mobile, and cloud. They had lots of these projects. The problem was that Ballmer organized the company around execution of its current strengths, the Windows and Office businesses. Projects not directly related to those activities never got serious resource or management attention.
It made me think about existing CAD and PLM vendors. Can similar scenario be applied for existing large CAD-PLM vendors? What are these companies going to miss?
Dave Ault brings an interesting perspective on what the future holds for CAD industry. Among the topics – Future of Autodesk, Future of the Cloud, Future of SolidEdge and any Mature CAD. Navigate to the following link to read Dave’s upFront.eZine article and draw your opinion.
I captured two points- 1/ mature CAD achieved the point when companies are not interested in additional changes. 2/ cloud is not for everyone. The following passage is a summary of Dave’s opinion:
I don’t see cloud for CAD ultimately being the only model for anyone. In time, I think the expense of subscriptions will not work out for CAD companies any more than mainframes did for users. I am not sure that subscriptions-only is carved in stone for Autodesk. Talking with them at the event, their staff did not have good answers for some of my primary objections to the cloud and subscriptions. I can’t believe they haven’t talked about these topics, but I can believe they have not come up with good answers to them.
Do you suppose the C-suite dudes are victims of solipsism [“I am the only mind which exists”] and honestly don’t see the flies in the ointment? That objections from people like me have no value until the inevitable online hack makes them see differently?
While I cannot argue with Dave’s arguments about what his business needs, I can only bring Steve Ballmer’s opinion about iPhone 10 years ago. Here is the link, but you can find it everywhere.
Steve Ballmer: There’s no chance that the iPhone is going to get any significant market share. No chance. It’s a $500 subsidised item. They may make a lot of money. But if you actually take a look at the 1.3 billion phones that get sold, I’d prefer to have our software in 60 per cent or 70 per cent or 80 per cent of them, than I would to have 2 per cent or 3 per cent, which is what Apple might get.
What is my conclusion? All successful companies have one thing in common – they don’t fear to change. The companies that continue to thrive are agile and they can change with the times. These companies can embrace new ideas and adopt changes coming from outside- business and technological. To conclude, these companies are thinking like startups. These companies can leverage the knowledge about customers, communicate faster and altering business models to sustain changes. CAD and PLM business is going to change. Today, large vendors are mostly competing with themselves. But, they are not competing with the status quo of their customers and problems manufacturing companies are facing by the need to compete in a new digital environment, by problems of running an outdated software, problems of sharing data using emails and having 1-2 years PLM implementation roadmaps. Just my thoughts…
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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.