Will PLM Channels Survive The Cloud Era?

Will PLM Channels Survive The Cloud Era?

Cloud is one of the trending topics these days. Slowly, it comes also to PLM space. With the growing number of companies in this space, it becomes clear that cloud is the future of business software and not a baloney as some of the people predicted few years ago when “the cloud” was mentioned first time. However, today I want to raise a topic, which is far from “cloud technologies” and talk about one of the aspects of business called “channel”. Every company needs to develop their channel to sell what they produce and PLM companies are not exclusion from this rule. The ability to have an effective channel made many companies extremely successful. Think about Autodesk or SolidWorks resellers. In the past, they played a key role in the development of businesses for both successful companies. If you have some time, I can recommend you the following reading about SolidWorks VAR channel written by Jeff Ray, former CEO of SolidWorks published by David Skok on his blog.

I found the video below interesting in the context of channel and cloud business. You can see Guy Weismantel, Microsoft’s director of ERP Marketing, talking about the future Microsoft Dynamics and cloud partners.

I think, everything said by Guy make a lot of sense for PLM business as well. The role of channel(s) can be changed significantly at the time software becomes available online on the internet. There are few fundamental differences – availability with no installation, subscription, customization level, services and support. So, will traditional distribution model is going to disappear? Or existing distribution channels will require some groundbreaking changes?

In my view, business partners and channels are in front of significant changes. Usage of the internet will completely change the landscape of PLM reseller channels. They will need to shift the focus more towards business and product development software consultancy and less focusing on software delivery, training and installation. Customization will become an interesting portion of business related to how cloud software can be adapted inside of the companies.

What is my conclusion? It is clear to me, PLM distribution channels are going to pass a significant change as a consequence of business switching towards cloud solutions. The relationships in the triangle vendor-customer-partner is going to change.  It will be a big shift. Many surprises on the way… Just my thoughts.

Best, Oleg

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  • Awadhesh Singh Parihar

    Hi Oleg
    In my opinion, cloud as PLM deployment option is not so much connected to the viability of various channels. If private cloud is preferred as PLM deployment option for large enterprises, channel partners will still have a role to play, in my opinion.
    The real disruption would be SaaS which may or may be delivered on cloud. However, for a SaaS offerring, cloud will be the best option considering elastic capacity inherent in Cloud
    Regards
    Awadhesh

  • Stan Przybylinski

    Hi Oleg,

    This is one of the topics we will discuss in our upcoming Vendor Forums in the US, Germany and Japan. The lives of channel partners have been changing in significant ways over the last several years, as their OEMs expand their portfolios, and more (and different) services are required. Are they ready, willing and able to host private clouds for their OEMs? This is a different types of investment, with different skills and facility requirements than before.

    PLM is many things, but it is seldom boring.

    Stan Przybylinski
    Director of Research
    CIMdata, Inc.
    s.przybylinski@cimdata.com

  • beyondplm

    Stan, thanks for the comment! I agree, to serve as a private cloud hosting is one of the options today’s PLM VARs can go. It is interesting to see if this plan will work out. The hosting cost isn’t cheap. To convince partners/VARs to invest money in clod hosting can be an important achievement for CAD/PLM vendors.

    Btw, are you inviting bloggers to Vendor Forums? I just wonder…
    Oleg

  • beyondplm

    Awadhesh. You are right. It depends on what you mean by cloud. I think, cloud decrease the dependencies between customer and partner/VAR. Customer will be more bound to a vendor. The role of partners/VARs need to be redefined with this regards.

    I want to say few more words about a private cloud option. In my view, “private cloud” is kind of interim status similar to something I’d call “half pregnancy”. The existence of private cloud is a matter of cost. As soon as the public cloud will provide a competitive cost, the “private cloud” solutions will start to disappear. However, the separate story needs to be said about regulated industries…

    Best, Oleg

  • Yes, an interesting topic and one in which I’ve just done quite a lot of research in recent times. Unfortunately the company that sponsored the work is using it as proprietary collateral for their channel and for internal channel strategy development.
    What’s clear is that there’s an need for the partner to better understand new opportunities to add value to their customer in any transition to Cloud provisioned deliverables.
    Forward thinking vendors are investing time and resource in supporting their partners manage the changing landscape – not least amongst this is a view that services may well play a larger part of the potential opportunity.
    A (potential) shift from perpetual to subscription based revenues raises concerns amongst many and a number of channel partners see this as threat. Remember that the shift is evolutionary not revolutionary and the potential value to the customer may be immense. At the end of the day those that help the customer realise true value and return are more likely to reap the rewards of any changes.
    All is not doom and gloom. There are many that I’ve spoken to that are ‘making hay’ whilst others sit by and watch….

  • beyondplm

    Allan, thanks for sharing your insight on this topic. I think, to realize the value is the most important thing in this turbulent process. The core thing is to follow changing priorities and value trends on the customer’s side. The transition between “on the premise” and “cloud” will be longer, in my view. The ability to balance will be the key for vendors. Best, Oleg

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