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Why all PLM software will be SaaS soon?

by Oleg on November 26, 2014 · 0 comments

plm-cloud-dream

I’ve be sharing many of my thoughts about how different cloud technologies can be used to implement PLM. Nevertheless, once in a while, I’m also getting comments and questions about acceptance of cloud PLM for large companies. Usually, it comes in the intersection of security and readiness of large manufacturing companies for cloud (SaaS) software.

TechMVP article – The benefits of SaaS transformation: both the obvious and non-obvious shows some very interesting perspective on that topic. Let me go straight to security question:

The second common objection stems from the thought process amongst large enterprise CIOs regarding whether to allow certain applications to live outside of the enterprise’s firewall.  IT managers and executives – sometimes speaking about legitimate security concerns and sometimes speaking to protect their jobs – stand in the way of core applications moving to the cloud via a SaaS vendor.  At the same time, these same decision makers have adopted Salesforce.com for CRM, and allow unencrypted email between employees and non-employees, thus calling into question the sincerity of their argument against other SaaS applications.  The successful adoption of CRM in the cloud has opened the floodgates for virtually all other types of applications to move to the cloud even over the objections of certain IT managers.

Towards this end, we have seen in recent years the advent of ERP (FinancialForce, Workday), Marketing Automation (Eloqua, Marketo), and Software Development or ALM (GIT and Rally Software) in the cloud.  These types of applications manage information that is often considered the “crown jewels” of corporate data, and thus are the types of applications that some thought would never take root in the cloud.

I can observe a significant growth of SaaS software adoption by manufacturing outside of pure engineering domain. You can see software in different categories – ERP, CRM, marketing, project management, software lifecycle management and many others. Imagine manufacturing product with software code managed using GIT? What will be the point to reject PLM system managing engineering bill of materials in the cloud?

Another interesting perspective is related to creation of new software companies. The graph below demonstrate a complete dominance of news business starting SaaS companies.

saasapps

One more data point is coming closer to PLM business and related to implementation of ERP systems. Panorama consulting solutions published an interesting 2014 ERP report, which speaks about type of ERP systems implemented in 2013. As you can see SaaS and hosted system is accounting together for 96% of all systems.

type-of-erp-software-2013

What is my conclusion? I wonder what percentage of new PLM systems implemented in 2014 will be SaaS. The number is probably not very high. However, traditionally, it takes long time to decide about PLM system. My hunch, that broad adoption of SaaS software in other domains will push manufacturing companies to evaluate more PLM systems and make their decision faster than before. SaaS lower risks and upfront cost, which can be an additional factor for manufacturing companies to taste cloud PLM sooner than later. Just my thoughts…

Best, Oleg

photo credit: Robert Hensley via photopin cc

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facebook-at-work-for-engineers

Social software was hot topic in engineering software ecosystem for the last few years. The results are somewhat mixed. Start-up companies and well established CAD/PLM vendors learned by mistakes, some of them failed and some of them is still in process of developing new type of collaborative engineering software. I captured some of my thoughts about that here – Why Social 1.0 failed

One of the most famous messages of social software was to create “Facebook for XYZ”. Many companies tried to deliver this message in variety of forms in engineering software. The most impressive one was GrabCAD, which created a community of about 1.5M engineers sharing 3D CAD files. Even so, GrabCAD put their focus on development of cloud PDM software – to find a way to monetize. Some of my comments on what GrabCAD did are here – GrabCAD – from Facebook for engineers to PLM. GrabCAD is probably a company that unofficially can own the tag of “Facebook for engineer”. Google search is a good confirmation for that.

A very interesting news came from “original” Facebook. Earlier this week, Facebook leaked the information about Facebook’s intent to create so called “Facebook at Work”. Forbes article gives you some details about Upcoming Facebook at Work service will rival LinkedIn and Slack.

Facebook is preparing Facebook at Work, a service aimed at enterprise customers that will allow them to chat with colleagues and “collaborate over documents,” according to a new report in the Financial Times which cites anonymous sources.

Social business wasn’t an easy job for many companies. For the last few days, I see many speculations and reports about how easy  (or not, actually) Facebook can capture a new business niche. Here is the article from ReadWrite – Why Facebook For Work Will Be A Hard Sell To Employers. This is my favorite passage:

Users will be able to chat with coworkers, collaborate on projects, and build catalogues of colleague’s contacts, with each of these services directly competing with Microsoft’s Yammer, Google’s Drive, and LinkedIn. All the services Facebook at Work will offer already exist. Slack, Google Drive, and LinkedIn already do these features well, and have the market for these respective services cornered. If Facebook at Work is going to have a chance of competing, it’ll need to extremely improve on its competitors’ services. And from the little we’ve seen of the service (with Facebook declining to comment), it’s hard to tell if Facebook for Work even has a chance.

“Facebook at Work” news made me think about what it means for engineering software ecosystem? First of all, it reminded me how is dangerous profession of industry analyst. It is still unclear how successful Facebook at Work is going to be, but Jim Brown of Tech-Clarity should be probably concerned about his 5 years old statement – We are not Going to Design an Airplane on Facebook!

All engineering vendors (CAD and PLM companies) just got a new mindshare competitor in everything that can be considered as social and collaboration. In my view it will be hard for Facebook to focus on “project collaboration” for design and engineering teams. The space is too narrow. At the same time, “social collaboration pond” is not as safe as it was before such a big fish as Facebook jumped into it.

My special attention caught by feature related to document sharing and collaboration. In my article – The path towards ubiquitous CAD cloud drive, I mentioned few examples of companies working on how to leverage cloud for CAD files storage and collaboration. Cloud file storage is an interesting place and I expect to see many changes in this domain in coming years. Every engineering company will have to think about pros and cons to have a special CAD files sharing tool. Facebook is just another behemoth convincing companies to store files on their servers and developing slick user experience to collaborate and share project information.

What is my conclusion? Facebook just captured a piece of attention for social project collaboration from everyone. “Facebook at Work” won’t compete directly with engineering software businesses. However, most probably, CAD and PLM vendors have to review their sales and marketing presentations. How to differentiate engineering collaboration software from Facebook? I will put security and CAD viewers on the top of my list of differentiators. Facebook won’t be able to change security perception overnight. Also, it will be challenging to develop 3D viewing solutions. Some specialized vendors can decide to jump and partner with Facebook about 3D CAD viewers.  At the same time, there is one thing, which will challenge CAD and PLM vendors already tomorrow. Together with Google, LinkedIn and other web giants, Facebook will challenge engineering teams by setting even higher bar for project collaboration user experience. Just my thoughts…

Best, Oleg

photo credit: aldoaldoz via photopin cc

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decision-making

Ask people about PLM selection process. You can get an impression it is not a simple process. The same can be said about any decision related to enterprise software – it is complex. Today, I want to take a look on that from a bit different perspective.

I know few manufacturing companies that literally spending years to make a decision. In PLM domain, it is quite regular to invest few months in investigation about what is the right PLM system for your organization. You can find many articles and presentations from vendors, service providers and industry analysts about PLM selection process. Here are just few of them (priority order by Google search) – Gartner PLM selection criteria; The art and science of selecting the right PLM for your organization; PLM selection – do this.

Jos Voskuil (you might know him as Virtual Dutchman) just posted another story that caught my attention during this weekend – PLM selection proof of concept observation. Have a read – this is very thoughtful article. I found it as a very good advise how to manage complex enterprise software selection process. For good and for bad, it can be applied to any piece of software, hardware and probably even to situations beyond that like decision about business partnership, etc. I replaced word “PLM” in the article by “ERP” and found it as a very good piece of advise too. I tried to applied it by “mobile solution” or “home theater system” – hold your breath… with some stretch, I think you can use it as well. Because.. the process of decision making is very similar.

It made me think about lifecycle of things and solutions around us. So, I want to come with two examples – ERP system and smartphone. Navigate your browser to the following article by fairphone – Next step in lifecycle assessment. Article speaks about average lifecycle of smartphone is about 2-3 years these days.

average-lifespan-of-phone

The following article - Why your new smartphone is already obsolete by MyPhoneMd brings you an interesting breakdown of smartphone lifecycle by country. From absolutely extreme case of 21 months in U.S. it goes to some more conservative numbers in Europe, which is about 40-50 weeks.

Another example – ERP system (I wanted to come with PLM and CRM, but didn’t find any meaningful data). Bluelinkerp blog - When should you replace your ERP software brings an interesting diagram - the majority of ERP implementations is up to 7 years old. The chart based on data provided by Aberdeen study - Aging ERP – When your ERP is too old.

erp-system-age

Now, I want to take it to extreme. Lets speak about marriage. For most of us, this is a fundamental decision we supposed to take for a very long time (I hope most of my readers would agree). However, modern statistic provide a bit different data points. Navigate to the article – 32 shocking divorce statistics article and you learn that average marriage lifespan is 8 years (almost like ERP system in my example above). My hunch, we can improve this situation by applying of some recommendation and observations from Jos’ article about PLM proof of concept, but this is already different story for another blog post. 

What is my conclusion? The lifespan of things in our life is getting shorter. While it is sad in some situations like family, it is probably good for most of other examples I mentioned. In my view, this is a reflection of speed of changes in technology and industry. What it means for your PLM selection process? Do it faster and think what pains you can kill and what processes you can improve in your organizations in a short period of time. Modern trends in software development – cloud and SaaS will make software lifecycle easier and replacement less painful. Just my thoughts…

Best, Oleg

photo credit: toprankonlinemarketing via photopin cc

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DIY Cloud PLM using Aras Innovator

November 14, 2014

I’m continue to explore the topic of cloud PLM options. My last blog post about it covered delivery options for cloud PLM. It raised few interesting discussions showing that vendors are closely following up any opportunity to leverage a combination of existing PLM platforms and cloud infrastructure. IaaS is a technical buzzword behind this option. […]

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How PLM can leverage Azure analytics?

November 13, 2014

Analytics is a hot word these days. You can hear it everywhere. It sounds and feels sweet and smart. You can think about crunching data and getting results. It sounds very Googley? Indeed, Google is spending lot of money making Google cloud platform more affordable. Google provides some interesting online services that can be used […]

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PLM Vendors and Tunnel Vision

November 11, 2014

I’ve been following Dassault Systems 3DXforum this morning. Thanks for technology improvements these days you can be almost present at the events by combination of live streaming and social media communication. The first presentation by Bill Taylor, Fast Company editor struck me by mentioning of the idea of Tunnel Vision. I took a trip to […]

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The definition of cloud PLM

November 7, 2014

PLM industry is moving towards broader adoption of cloud solutions. More people these days are asking how to implement cloud. It becomes more and more clear that devil is in details and cloud environment can be very different. It comes in variety of aspects related to infrastructure, support of browsers, the need to have elements […]

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Cloud PDM hack with Google Drive and other tools

November 6, 2014

Earlier this week I talked about future of ubiquitous CAD cloud drives. My hunch CAD and other engineering software companies will be trying to use new cloud technologies to improve the way people collaborate on design. The question what tool to use for CAD file collaboration is not simple. I discussed it last year – […]

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Competitive edges of SharePoint and PLM collaboration

November 5, 2014

SharePoint is an interesting product and technology. I’m following it already few years. I can see some kind of love and hate relationships between PLM vendors and Microsoft SharePoint business. You can catch up on some of my thoughts about SharePoint in my previous posts – SharePoint PLM Paradox; Why PLM should care of SharePoint?; PLM […]

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The path towards ubiquitous CAD cloud drive

November 4, 2014

I’ve been talking about future of cloud file system and CAD data trajectories the other day on my blog. It goes back and connected to multiple discussions about future of file system. What will be future of file systems and file paradigm. Can we announce the death of file system? So, file system is dead, […]

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