My post “How To Manage ECO Without Paying $1’500 Per Seat” raised a very interesting discussion on Zero-Waite State blog about PLM price. Thanks Stephen Porter for doing that. I recommend you to get inside and have a read. This post made me think about the future of PLM price trajectories and an impact of technologies on the future of PLM price.
The Future Disruption
I hope you had chance to read the book by Chris Anderson — Free: The Future of a Radical Price. I’d call it the modern “Bible of Free”. One of the important points, in my view is the following — “information and technology cost is trending towards zero”. As part of this, my own believe is that we are going to experience an influence of this trend, including an influence of free-price-market in various fields. The potential weak elements in the chain of highly priced software products are those that have a serious customer dissatisfaction or a very high price/value characteristic. What happens with PLM? In my view, this is a definitely weak chain. The complexity, over-promising during a sale process and history of acquired products and companies created a place that needs to be disrupted. I can see potential PLM disruptors PLM disruptors — Open Source (Free Distribution) of Aras, few on-demand products and PTC SharePoint business. The last one is trying to ride SharePoint adoption and Microsoft strength in the enterprise market. Who will be more successful in the future PLM disruption? A very interesting question…
PLM Technology Weakness
Where I see a weakness in PLM technology we have today? The current technological approach was born 15-20 years ago. We are continuing to SQL our future. The development of most of PLM technological platforms are balancing to co-exist between existing customer commitments and future product development. Platform fundamentals are the same regardless on the type of user interface or modern marketing terms. This technology is vulnerable in front of new development that happened during past ten years in Web 2.0. To understand the scope of the last ten years and the potential influence is very important.
What is my conclusion? When Stephen is asking — The Price Is Right?, I’m thinking about sales lessons I learned in the past. The right price is one customer will be ready to pay. Since PLM sales these days are not similar to sales of iPhones and iPads, I think we have a problem. We won’t be able to solve it since the problem is not in the price, in my view. The problem is broader and related to all main components of PLM delivery to customer — price, technological complexity and high price customer need to pay by installing, customizing, modifying software and training people. To make PLM cheaper, to provide a more flexible PLM pricing model, or even give PLM away can definitely provide some pain-relief, but will not give a radical change to the industry.
Just my thoughts.
Best, Oleg
