From the category archives:

Customers

What is PLM software replacement cycle?

by Oleg on December 12, 2014 · 2 comments

plm-recycle

PLM selection is complex process. It takes time to make a decision, evaluate, build a pilot and implement PLM system. I’ve been thinking about how this process can change in the future. Navigate to my Future PLM selection post to catch up. One of my discoveries was the following data point about age of ERP system.

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

This data point is not scientific, my I can predict that company is replacing ERP system every 7-10 years. This number is actually aligned with similar numbers I’ve heard from ERP resellers in the past.

It made me think about replacement cycle of PLM systems. I guess we can probably see a similar trend in the PLM market too. PLM systems are aging and we can probably discover lifecycle of PLM implementations. Sort of PLM recycling. I’ve been trying to find some information to support it, but didn’t find much references online.

Joe Barkai’s blog – Product Innovation Congress 2014 San Diego brings some interesting fact about PLM system replacements. Here is the passage from Joe’s blog.

There appears to be much activity in selecting, replacing and upgrading PLM software. Some were first time PLM buyers, but there were a surprising number of companies expressing dissatisfaction with the exiting solution and seeking a “better” PLM system. I did not conduct a structured survey, but anecdotally it appears that a good number of those in search of a PLM replacement are users of ENOVIA SmarTeam and ENOVIA MatrixOne.

My observation: The continued search for a “better” PLM system will continue to drive activity and put pressure on PLM vendors to deliver greater value in enhanced functionality, lower cost, faster deployment, and new delivery and ownership models. The move of reluctant PLM vendors such as Oracle Agile to offer a cloud delivery model is but one recent example and I except other PLM vendors are in the process of following suit. This dynamic keeps the door open for vendors such as Aras PLM that continues to challenge the hegemony of the incumbents.

That being said, buyers should realize that the PLM software itself isn’t a substitute or remedy for flawed and suboptimal product development processes. For each dissatisfied PLM user company you will find many others who are highly successful and are able reap the full potential of the very same PLM software. It isn’t the SW. It’s you. Don’t blame the vendor.

My hunch most of large manufacturing companies already made few PLM system implementations. They made mistakes and probably want to fix them. In addition to that, businesses and systems requirements are evolving. People turnover is another factor. Enterprise systems lifecycle can be triggered by new people coming to the role of managing enterprise and engineering IT. So, 7-9 years, is a good time period to make analysis, fix problems and re-think PLM implementation and strategy.

What is my conclusion? Understanding of PLM software replacement cycle and lessons learned from an implementation can help to build a better PLM industry eco-system. It is less about blaming vendors of companies for software problems. It is more about understanding of business, technologies and implementation needs. Just my thoughts….

Best, Oleg

Share

2 comments

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

Share

0 comments

google-data-center

Companies are moving to cloud these days. The question vendors and customers are asking today is how do we move to the cloud. I’ve been asking this question in my post few month ago – PLM / PDM: Why the cloud? Wrong question… I discovered multiple options for customers to start their move to the cloud – mainstream cloud productivity tools to share data and collaborate, to migrate existing PLM platforms to cloud using IaaS strategies as well as to build new type of platforms and tools using new type of cloud platforms and infrastructure.

Today, I want to show the perspective on public cloud from both sides – large provider of public cloud infrastructure (Google) and large manufacturing company (GE) and to see what is the intersection between their strategies.

Google – example of public cloud platform

My attention caught Google presentation – The next generation of Cloud. Navigate your browser to the following link to watch it. Besides the fact it was inspiring by the exact same question – “How to you move to the cloud”, it provided a very interesting insight on the aspect of Google public cloud platform.

google-1google-2google-3google-4

Hardware cost is declining and Google is adjusting public cloud to match economic realities. Together with economic of scale and utilization, I can see a trajectory towards decreased of public cloud cost even more in the future. 

Large manufacturers move to the cloud

So, what customers are thinking about public cloud? Inforworld article just published an article presenting GE strategy to go all-in with public cloud. Presented as an interview with GE COO Chris Drumgoole, article outlines his aggressive plans to migrate to public cloud services — and how they support GE’s organizational goals. Read the article and draw your opinion. Here is my favorite passage:

Drumgoole won’t talk specific numbers, but he claims that “north of 90 percent” of the apps deployed by GE this year have been in a public cloud environment. We’re big fans of the idea that everything ends up in the public cloud utility model eventually. “Eventually” is the big caveat, because some people within GE would argue that should be tomorrow, while others would tell you it’s 15 years from now. It’s a subject of good debate. But either way, the regulatory environment we live in right now prohibits it. In a lot of spaces, when we say technically that we think something should be public, and we’re comfortable with it being public, the regulatory environment and the regulators aren’t quite there yet and we end up having to do some sort of private or hybrid cloud. That’s probably one of the biggest barriers to us moving more public.

Drumgoole speaks about connected devices, big data and analytics as a significant driver to move data to the cloud. I reminded me one of my previous posts – IoT data will blow up traditional PLM databases (http://beyondplm.com/2014/09/23/iot-data-will-blow-up-traditional-plm-databases/). The amount of data is huge and it will certainly require new approach in data management. Here is the example of how much data produced by jet engine these days:

Take one of the jet engines we make, and if it’s fully instrumented. On a typical flight, it’s going to generate about two terabytes of data. Not everybody fully instruments them, but if you instrument it the way people would like in order to get predictive data, you’re talking about 500GB per engine per flight. A flight with a GE engine takes off or lands every three seconds. All of a sudden, the data gets very, very large very, very fast.

PLM vendors and public cloud

As for today, I’m not aware about any PDM/PLM software using Google Cloud as a platform. The majority of cloud PLM software built on top of infrastructure provided by collocated hosting services and variety of Amazon cloud infrastructure. Dassault Systems and Siemens PLM made few public statements about support of diverse set of cloud options and IaaS infrastructure. It would be interesting to see future evolution of PLM cloud platforms.

What is my conclusion? The technology and economic of cloud is changing  these days. My hunch, it will pull more vendors and companies to use public cloud in the next few years. Software companies will try to balance between leveraging technological platforms and cost. At the same time, customers will try to balance between regulatory requirements and opportunities to make data accessible and scale without limits. Interesting time and significant opportunity. Just my thoughts..

Best, Oleg

Share

4 comments

PLM implementations: nuts and bolts of data silos

July 22, 2014

Data is an essential part of every PLM implementation. It all starts from data – design, engineering, manufacturing, supply chain, support, etc. Enterprise systems are fragmented and representing individual silos of enterprise organization. To manage product data located in multiple enterprise data silos is a challenge for every PLM implementation. To “demolish enterprise data silos” […]

Share
Read the full article →

PLM for Small Teams – Autonomous Alignment

June 19, 2014

This week is very fruitful for PLM events. PTC Live 2014, Siemens PLM connection, GrabCAD media event. Twitter and other social networks can help you catch up with multiple events at the same time with minimum time. So, in 1-2 hours, you can get up to speed with news and updates. Chad Jackson’s and Allan […]

Share
Read the full article →

What PLM vendors can learn from manufacturing startups?

June 13, 2014

About half year ago, I was looking for bluetooth location trackers. The solution that caught my attention was Tile. I liked the slick video and interesting design. At that time I learned that Tile grabbed $2.6M via crowdfunding – very remarkable result. However, I noticed that solution is not available. I followed Tile since than […]

Share
Read the full article →

PLM Implementations Challenges and 3 Organizational Lenses

June 4, 2014

It is not unusual to hear people speaking about PLM implementation and changes that need to be done in the organization. Very often, PLM vendors or implementers are calling this process business transformation, which is literally supposed to make a change in everything that related to product design, engineering, manufacturing, support and services. So, to […]

Share
Read the full article →

PLM Services, Department Stores and Digital Future

June 2, 2014

Don’t be surprised if your most trusted CAD/PLM service provider will be acquired tomorrow. According to Joe Barkai’s post- PLM Service Providers Ready To Deliver Greater Value, we have been witnessing a wave of mergers and acquisitions of PLM services companies (the examples – Accenture / PRION Group, Accenture / PCO Innovation, KPIT-Tech / I-Cubed […]

Share
Read the full article →

Will PLM Vendors Jump into Microsoft Cloud Window in Europe?

April 10, 2014

Cloud is raising lots of controversy in Europe. While manufacturing companies in U.S. are generally more open towards new tech, European rivals are much more conservative. Many of my industry colleagues in Germany, France, Switzerland and other EU countries probably can confirm that. Europe is coming to cloud systems, but much slower. I’ve been posting […]

Share
Read the full article →

Why PLM stuck in PDM?

April 5, 2014

I’ve been following CIMdata PLM market industry forum earlier this week on twitter. If you’re are on twitter, navigate here or search for #PLM4UM hash tag on twitter. The agenda of PLM forum is here. The following session discussed one of my favorite topics- PDM v PLM. PLM: Well Beyond Just PDM by Peter Bilello. […]

Share
Read the full article →