What I learned about PLM leaders from Forrester research

What I learned about PLM leaders from Forrester research

Earlier today my attention was caught by Forrester PLM research for discrete manufacturing industry. Almost simultaneously, two PLM vendors – PTC and Aras made an announcement about their inclusion as leaders into Forrester research. You can read about it here from Aras website and here from PTC website.

Here is Aras message:

According to Forrester, “Customers using Aras’s PLM Innovator tool tended to have the most innovative use cases of their PLM systems of all vendors included in the Forrester Wave evaluation.” Forrester found “The firm was lauded by customers for fast implementations and a flexible software solution that can quickly adapt to a customers’ specific needs while still being upgradable down the road.”

Here is PTC message:

“PTC is a great choice for discrete manufacturers looking for an involved vendor with IoT capabilities that can get their PLM solution up and running quickly and flexibly.”

Unfortunately, report isn’t shared free. You need to give up on one of your emails to get access to the report. So, I cannot share it, but if you navigate to one of the links above, you can get it. I used this one. However, the following image is indeed public and I wanted to share it.

What is very interesting is a small amount of companies. All companies in the list are traditional PLM suspects. Dassault Systemes, Siemens PLM, PTC, SAP, Oracle and Autodesk. With such small amount of vendors, 4 of them (okay… technically only 3) are located in the leadership segment. Addition of Aras was refreshing but it was almost predicted.

Aras revenues is $100M?

Forrester research presented interesting data point about participants. So, if I connect two data points together, we can possible make a conclusion that Aras revenues is exceeding $100M. You can make this assumption by Forrester statement that only vendor with more than $100M revenue in 2016 are allowed to participate.

Autodesk PLM vs SAP

Both Autodesk and SAP were positioned outside of leader’s space. While SAP and Autodesk PLM revenue difference is probably huge, I found interesting to find that Forrester is defining Autodesk more strategic comparing to SAP.  It was not clear to me why.  

What is my conclusion? All companies included by Forrester to the chart except of Aras are old  and well-known players in PLM for discrete manufacturing segment.  Their portfolios are well known and available for years. Aras is also almost 20 years old, but it has a momentum. Aras data point about $100M revenue is interesting. To reach $100M is a hardly achievable goal when you sell PLM in discrete manufacturing. If Aras did it, it will be the only vendor for the last 10 years. In my view, it is a signal that current business model doesn’t work for new businesses and only can protects existing vendors. At the same time, PLM adoption in this segment is relatively low comparing to automotive, aerospace and defense industries. It is a time to make a change in a business model. Just my thoughts…

Best, Oleg

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.

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  • Hi Oleg,

    Great comments, as always. I always find these analyses interesting, but a bit difficult to compare and reconcile, especially when they include vague and highly subjective metrics such as “vision” and “cool.”

    As you mentioned, and is detailed in the Forrester Wave report, there’s little functional differentiation between the top 4 contenders. Unless the PLM buyer focuses on one key area which some vendors do not support sufficiently well (e.g. supplier management or digital twin), functionality does not offer much differentiation anymore. PLM buyers buy more than software; they buy a vision, a product roadmap, and a long-term commitment. A PLM company trying to compete on features and functions alone will not go very far (which is also why Autodesk has such a long way to catch up).

    Aras scores high on strategy and vision, but gets penalized for poor market presence (as do Autodesk and Oracle). But on the other hand, according to Figure 2 in the Wave report, Market Presence doesn’t factor into the final score…

    Lack of brand recognition and visibility to large-scale deployments of Aras PLM is absolutely an area Aras must address. With revenue exceeding $100M and recent cash infusion of $40M, we may see some changes on this front.

    Speaking of surprises, it isn’t clear to me why Siemens was ranked significantly lower than its peers on both strategy and offering. Has the analysis ignored its broad portfolio of simulation tools? Did it penalize Siemens for being relatively late to jump on the digital twin and IoT bandwagon?

  • beyondplm

    Joe, thanks for sharing your insight! I found very fascinating your confirmation of little difference between top 4 companies. Although Aras is different just by not owning any CAD brand/product (maybe this is a next step for them -to buy CAD company? This is can be an interesting move).

    However, PLM buyers buy commitment is a bad thing. It means PLM vendors failed to create a notable differentiation and they have commodity offering in PLM market segment.

  • Hi Oleg,
    This is a fundamental question: should ARAS add a CAD tool to its portfolio to be more like the “big guys”, or focus on remaining a “pure play” open standards-based PLM? The hopes of CAD companies to force a de-facto standard in a given organization are not any closer to materialize, and heterogeneous CAD (and simulation) environments are here to stay. In my opinion, ARAS is better off investing in supporting new and potentially differentiating engineering and design methods and tools such as MBSE, complex large-scale mechatronic systems, advanced simulation, etc.

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  • beyondplm

    I agree, from a pure PLM play ,it is an absolutely right decision. Does it mean we are moving back to the era of CAD-less PLM vendors like it was 10-15 years ago? I will think about this question and share my thoughts…

  • A thought: Instead of existing disciplines, e.g. CAD, EDA, which tend to be, and perhaps should be, multi-vendors anyway, I would consider investing in one of the emerging uber-categories: MBSE, IoT, perhaps next-gen requirements management and configuration management, whatever they shape up to be.

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