Normally, I’m trying to avoid the topic of PLM competition. Not very often, readers or attendees at conference are approaching me with the blunt question – what is better? TeamCenter vs. Enovia? Aras or Windchill? My typical answer – there are no “absolute advantages” for a specific PLM system. Enterprise and manufacturing companies are complicated environments. The level of complexity, strategy and current context can create a situation where each specific product will have his own advantages and disadvantages.
However, today, I want to talk about competition from the standpoint of PLM vendor. In other words, what can make PLM vendor competitive strategy more successful? To make this discussion interesting and provoking, I will use some examples of what happened in PLM market for the last 10 years. In the world where PLM buzzwords are getting very similar, I will try to answer on a single simple question – what can make PLM vendor competitive nowadays?
I can see four major strategies that can be used by vendors – discontinuity, marketing and branding, partnership and competitor’s mistakes. These are not specific characteristics for PLM companies and can be used for everybody. However, I will try to fill them with PLM context.
Discontinuity
Enterprise software is a complicated beast. PLM cannot be excluded from that list. It is complex, requires long time planning and implementation cycle. Once implementation it works for a long time, replacement cost is high too. Add to this last 10 years of acquisition in this field and large vendor platform transformation and you will have a perfect place to play with discontinuity. Formally, nobody is discontinuing PLM/PDM products. Pro/PDM, Eigner, SmarTeam, Metaphase – all these products are supported and maintained by vendors on a certain level. Practically all PLM vendors are building a support network to deal with customers running outdated and retired systems. Therefore, these customers can become a strategic asset for competitors that will be able to propose them an interesting offer. Once the decision made, to change it will be even more complicated because of long processes, politics and corporate ego. Therefore, discontinuity play can be powerful and dangerous.
Partnership
To have good partners in business is like to have good friends in your life. If you have trusted and powerful partners, you can use it as an advantage in your competitive war. In PLM business, I can see two types of strategic partnership – service and sales channel partner (eg. IBM was such for many years in business with Dassault Systems), the parent company (eg. Siemens for Siemens PLM) or another business division (eg. SAP, Oracle, Microsoft). To develop and keep right partnership is very important. To know how to drop partnership is also one of the elements of a competitive game.
Marketing
To build a perfect marketing and branding story is another way to beat competition. Yes, I know… you are smiling and maybe even thinking – who is buying marketing PowerPoint presentations these days. Believe me or not, it happens all the time. If you are powerful and strong brand with billions of dollars in revenue, your marketing story can be very compelling. It will take time, resources and effort to sort it out. Yes, you are in danger to buy a dream. But it can be a very nice and well packed marketing. So, take it seriously. It can be 3D Experience, High Definition PLM, Instant On – dreams is an important weapon too.
Competitor’s mistakes
Last, but not least- the mistakes (or in this context – presents) made by your competitors. You need constantly and permanently watch your competitors. Low quality of a release, compatibility failure, channel problem – all these mistakes are weapon in your arsenal to build your marketing expansion.
What is my conclusion? The PLM competitive landscape becomes more dynamic than before. I can see some movements done by large companies (eg. Autodesk), smaller established companies with very innovative strategies (eg. Aras) and startup companies. As I said in one of my previous posts – PLM is a fun place again. Just my thoughts…
Best, Oleg
Few weeks ago, back to my trip to Munich PLM Innovation Congress, I published post – Will Europe Adopt Cloud PLM? Navigate back to my article to listen to the speech by Neelie Kroes, European Commission Vice-President for the Digital Agenda, announcing a European Cloud Partnership help cloud computing through public procurement. Since that time, I started to follow “European cloud” story more closely. The following article caught my attention – Cloud computing ‘made in Germany’ stirs debate at CeBIT. Take five minutes of your time and read this article. It sounds like German IT and specifically Deutsche Telecom is playing an interesting cloud game. Security is a strong point they want to leverage. Here is an interesting passage:
The head of the German communications giant, Rene Obermann, told visitors to the CeBIT this year that “the ‘German Cloud’ could present a competitive advantage for us.”. Having lived through first a Nazi dictatorship, then a Communist one, Germans are especially sensitive when it comes to data protection and Deutsche Telekom hopes to leverage this to its advantage. “In Germany, the data protection laws are very strict. But several operators do not come from Germany and do not adhere to these standards,” said Obermann. He is aiming at the 3.6 million prosperous German small and medium sized firms who have not yet taken the leap to storing their data using cloud computing. Only 12 percent have done so. “It’s an enormous potential,” said Obermann, vaunting the advantage of his firm’s 30 giant servers or “datacenters” across Germany.
It made me think about future cloud PLM potential of German market. Two major CAD / PLM companies are permanent residents in EU – Dassault Systems and Siemens PLM. Dassault has significant cloud ambitions. Earlier last year, during DSCC 2011 event in Las Vegas, Bernard Charles mentioned that DS spent about $2B to develop the best in-class cloud online PLM platform. At the same time, Siemens PLM so far didn’t show up any cloud development and plans. All this happens in parallel with last development of Autodesk PLM 360 and Autodesk’s ambitions to establish themselves as a “Salesforce.com of PLM“.
What is my conclusion? I think, we are in the early beginning of cloud PLM race. As we’ve seen in consumer web, mobile, search and social networking, competitors will be using various tools to protect their interest and establish a better market position for their cloud products. Will “Made in German” sticker become one of them? Time will show. Just my thoughts…
Best, Oleg
picture credit domdeen / FreeDigitalPhotos.net
One of the companies I’m watching is GrabCAD. Earlier, I was talking about GrabCAD’s idea of open CAD library and community for engineering. Another topic I discovered with GrabCAD in addition to be an open library was “crowdsourcing”. Navigate to the following link to read Manufacturing Crowdsourcing and Cloud PLM. The ideas of crowdsourced engineering projects are getting more and more popular. With companies like Quirky and Local motors, the interest to community-based development is growing.
With such a background, I was listening to GrabCAD webinar about new features that will be developed in GrabCAD soon. Here is the video from that webinar. It is a bit longish, but you can watch first half only, since the second half is Q&A.
The following topic GrabCAD folks discussed is interesting – integration with DropBox. GrabCAD founders Hardi and Indrek mentioned that “collaboration” between GrabCAD users is one of the functionalities they have been thinking about long time. The story of collaboration seems to be interesting. In one of the early blogs about GrabCAD, Deelip Menezes mentioned that GrabCAD would be “more than just CAD library“. Navigate to the following link to read more. Here is a very interesting passage:
The plan here is not to limit GrabCAD to small CAD services like paper to CAD conversions, 2D to 3D conversions and the like. The plan is to offer a complete end-to-end solution which will include conceptual design though to manufacturing.
I’m looking forward to seeing GrabCAD / Dropbox integration release. Until now, I wasn’t able to see it released on GrabCAD (maybe I just miss dates and emails with the announcement).
What is my conclusion? “Collaboration” together with the “design though manufacturing”. What does it smell like? What does it look like? In my view, it smells and sounds like PLM. Is it a direction GrabCAD is going? I don’t have the answer. I know, GrabCAD is very dynamic and young company. So, everything is possible…
Best, Oleg
Freebie. GrabCAD didn’t pay me to write this post.
