COFES, Microsoft and Engineering Software Business Models

COFES, Microsoft and Engineering Software Business Models

COFES is a think tank for engineering software. This is a place where you can drop any idea and see if it resonates. One of the COFES sessions is so called Maieutic Parataxis session. Think about pitching your idea in front of 300 people. You can see a sequence of 7-10 pitches from people compressed in a row. This is what Maieutic Parataxis is about. Last year I shared the story about Simon Floyd of Microsoft talking about PLM Excels: COFES, Maieutic Parataxies and PLM Excels. This year Simon came with a new idea of future business models for engineering software. Some of Simon’s slides and observations were resonating with my previous thoughts about PLM software business models. About a year ago, I wrote about Faltered Licenses and Future PLM Business Models. I talked about Subscriptions, Advertising and Reverse models. Take a look on Simon’s slides and make your opinion.

What is my take on this? The engineering software is changing slowly. The dynamics are different from the consumer market where the idea of market pace was realized and succeed. I can see multiple reasons why it happens. The most important reason is what I call “a good enough” principle. Traditional manufacturers are very conservative. Software is just a tool for them to produce the result. Existing software can run these companies for years. At the same time, I can see signs of changes. There are two main reasons, in my view: cost and competition. In order to compete on the market, companies need to find more efficient software to get a job done. Engineering software market place can offer a diverse set of tools that can be used. However, the compatibility of these tools, data access and many other reasons can potentially lay down this idea. Leading companies in this space are thinking about market place and application granularity. I think next 5-7 years can show the potential of the realization of this model.  Just my thought…

Best, Oleg


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