You can’t sit in two chairs with one butt. Well, Siemens’s SaaS strategy says you actually can. TeamcenterX SaaS strategy is all about it – how to keep Teamcenter on-premise and bring TeamcenterX SaaS solution. For the last few days, I was learning more about Teamcenter X using my trial subscription. Thanks to Siemens PLM for letting me have this experience. It is always good to have hands-on, If you missed my previous article, check this out here.
In addition to having hands-on experiments with Teamcenter X, I was looking for more strategic information about SIemens’ product strategy. Check these two sources – Future PLM with Cloud Application Siemens blog article including conversation CIMdata’s Peter Bilello and Siemens’ Joe Bohman about PLM in the cloud and how it can solve business challenges. Also, I was listening to REALIZE LIVE Europe Teamcenter Strategic Update.
Today, I want to share my thoughts about Siemens’s SaaS strategy and approach. It is very interesting to see Siemens is embarking on a SaaS journey. Siemens has a very specific characteristic of its SaaS solution because of its unique market position. Teamcenter today has probably the biggest market share as cPDM (according to CIMdata classification). How to keep the existing Teamcenter and get all advantages of the Cloud/SaaS world? This is Siemens’ dilemma. Here are my 5 thoughts about Siemens and TeamcenterX.
1- Dual Teamcenter
Siemens is taking an approach to keep Teamcenter compatible for both worlds – on-premise and SaaS. While I understand the reasons completely, it means the X tool won’t have anything specific for SaaS applications and it is very unlikely to provide native cloud tools capabilities. At least I didn’t find it for the moment. The TCX was a virtual computer running a familiar version of TC. It is still possible I’m missing something. So, what to expect? I’d say welcome to the Microsoft Office approach where both tools – Office and Office 365 are compatible and co-exist is the best thing you can get.
2- SaaS envelope
SaaS means business and IT solution for Siemens Teamcenter. Called “Instant On”, it means Teamcenter will spin cloud resources to start your instance of the Teamcenter. Which means a single-tenant virtual computer. Such architecture has limitations when it comes to communications between teams and companies. The sharing of information is the biggest one. Today it sounds like a small problem because most large manufacturing companies aren’t looking into solutions capable of working for multiple companies, tenant isolations, and granular data definitions. At the same time, the demand for collaboration in manufacturing is growing and the single-tenant system is a dead end architecture compared to other vendors’ solutions
3- Best practices
The strategy of Siemens is to offer best practices as a starting point for the companies coming to TeamcenterX. It should eliminate the need for companies to spend time and resources. PLM industry was coming to out-of-the-box solutions already several times in the best. While it always sounds like an attractive approach, the problem is always to balance between completeness and flexibility. Siemens’ answer to this question is a fully blown Teamcenter solution.
4- Mendix for flexibility
Customization and configurations are important elements of each PLM solution. Siemens is bringing Mendix low-code as the answer. It is one of the most interesting aspects of how TeamcenterX can be expanded today and it is very promising. It is not clear how such a solution will perform for smaller customers.
5- Top down market penetration
Siemens’s market strategy is coming from their existing install based – mostly large companies and OEMs. As a result, Siemens is coming to the market top-down. The advantages of such an approach is a significant existing install base. The challenge is to scale down products tuned for large companies to smaller solutions, nimble teams, and fast development processes.
What is my conclusion?
Siemens is wrapping Teamcent in the X-envelope to bring the SaaS business model and to expand Teamcenter with the SaaS architecture. Compared to other vendors in the PLM world, this approach is unique because it is built around a single Teamcenter core. The main advantage of this approach is the richness of the Teamcenter platform. The biggest weakness of this approach is technology and solution for small and medium-sized companies. Cloud and SaaS are coming to PLM and it can change the landscape of PLM solutions in the next 5-10 years. Manufacturing companies are not fast movers. But once any PLM solution is adopted, the level of stickiness is extremely high. PLM market share didn’t change much for the last 1-2 decades. There are many opportunities in the PLM world these days. SaaS is the real opportunity to change the status quo. Just my thoughts…
Disclaimer: I’m co-founder and CEO of OpenBOM developing a digital network-based platform that manages product data and connects manufacturers and their supply chain networks. My opinion can be unintentionally biased.