A blog by Oleg Shilovitsky
Information & Comments about Engineering and Manufacturing Software

Will ERP be on cloud ahead of PLM?

Will ERP be on cloud ahead of PLM?
Oleg
Oleg
31 July, 2012 | 3 min for reading

What do you think about PLM vs. ERP competition? Err… Good question, right? In my view, PLM sales people are long time jealous about ERP sales success. The mainstream adoption, CxO focus, the amount of money organizations are spending on ERP and many other factors. PLM companies felt like a step child in front of ERP success. I have to say, situation changed a bit for last 3-5 years. The adoption of PLM is growing enterprise companies more often mention PLM as a strategic investment. Nevertheless, the question of the potential overlaps between PLM and ERP functionality is not unusual when it comes to discussions about Bill of Material, Manufacturing planning, Supply Chain and some others.

Cloud is trending these days. I’m following many discussions about cloud, enterprise software and cloud PLM, specifically. The topic is still very far the consensus. Opinions go sometimes in opposite directions from total adoption of cloud computing and cloud enterprise systems and up to significant concerns about security, performance, licenses and availability. Nevertheless, “cloud” made me think about “what if…”, PLM software can use cloud as “a secret weapon” to outperform ERP companies?

Thinking about that yesterday, I stumbled on the following blog post from CloudAve – Cloud ERP Starts to Break Out–NetSuite Reports Good Numbers. The article speaks about NetSuite. For many people NetSuite doesn’t say much. I’ve been following NetSuite cloud product offering for the last few years and find it very interesting. CloudAve article shed some lights to NetSuite financial performance. Here is what I learned first:

  • Subscription and support revenue was $61.0 million, a 27 percent increase on an annual basis
  • Cash flows from operations were $15.2 million, up by 80 percent from Q2 2011

The increase of subscription for 27 percent sounds to me like a very healthy performance. Remember, we are talking about cloud systems where subscription is the main source of revenues. Article also hints that such a good performance of NetSuite can be a foundation for a future acquisition by Oracle and confrontation with SAP. Here is the passage:

With NetSuite reporting such good numbers, and its success in moving up the food chain, even more credence is given to the “two-tier ERP” notion it’s been evangelizing. I’ve long said that it was only a matter of time before Oracle swoops in to acquire the company (especially so given the fact that Larry Ellison is the biggest shareholder already) and more tightly integrates it in with core Oracle offerings. The acquisition of SuccessFactors by SAP and the corresponding disruption it brings have brought both oracle and NetSuite some breathing room. I suspect however that new SAP Cloud Tzar Lars Dalgaard is working hard on a credible two tier and cloud plan and oracle and NetSuite need to plan for when this comes to fruition.

What is my conclusion? In my view, the jury is still out to judge cloud enterprise offering. Even such companies like Salesforce.com can be considered as well-know leaders of cloud enterprise systems, the coverage of ERP and PLM offering using cloud systems is still very low. Will PLM company miss an opportunity again and lost cloud battle to ERP giants? This is a very valid and important question to ask.

Best, Oleg

Recent Posts

Also on BeyondPLM

4 6
12 March, 2023

ChatGPT and AI topics are trending in the industry. The technology is fascinating and everyone is trying to taste it...

1 March, 2021

There are two types of CAD revolutions (features and platforms). The first create something completely new that was not possible...

3 October, 2012

I’m in Moscow these days to attend the first Autodesk University Russia (AU.Ru). Even so, I feel like attending multiple...

1 April, 2010

I think, buzzword compliance is a very important when you need to convince the company to use PLM. So, I...

28 August, 2013

Are you familiar with 1% internet rule? It is also called 90-9-1 principle. According to this rule, only 1% of...

29 January, 2011

I just discovered one interesting fact. Exactly, a year ago, on Jan 28th, I published my first blog post about...

8 January, 2009

While looking at the amazing development of 3D Gaming Technologies recently , I’ve been wondering – is it possible to...

14 January, 2019

Hello… This is Oleg with Beyond PLM and my video blog about Bill of Materials :). If you missed my earlier...

29 August, 2017

PLM is all about bringing right information to the right people at the right time. Nice marketing you can say....

Blogroll

To the top