SMB business is tough… and not only for PLM vendors

PLM for small companies is long time debated topic. The origins of PLM business are going deep into businesses of large companies in defense, aerospace and automotive industries. Nevertheless, PLM companies for the last 10-15 years are trying to crack down “PLM for SMB” story with variable success. Sometimes PLM solutions for small companies are reminding me a fashion show in Paris – one season PLM for SMB is trending, next one is not. One of the most visible PLM SMB shutdowns was PTC retiring their Windchill ProductPoint.

Another interesting SMB-related retirement announcement just came few days ago from SAP. German ERP giant is retiring their cloud initiative focused on small businesses – SAP Business By Design. ZDNet announced about it here. Article provides some information about why Business By Design was halted. Here is a passage from the article:

ByDesign is intended to serve “mid-market” companies that are smaller than large enterprises but larger than small- and medium-sized businesses. At launch, executives projected that the $4 billion software suite would generate $1 billion in annual revenue. Yet it is expected to generate no more than $35 million this year, according to Wirtschaftswoche.

Nevertheless, SAP Business By Design rival NetSuite seems to be doing well. Recently NetSuite signed partnership agreement with Autodesk about combined sales of NetSuite and Autodesk PLM360. Other PLM vendors are also getting back to be more focused on SMB market. Few months ago, Siemens PLM announced future expanding of SolidEdge SP product. PTC is coming with new SMB initiative – Windchill PDM Essentials. Arena Solutions is keeping their specialty in cloud BOM and PLM, in my view, also focusing on small companies.

What is my conclusion? 60-80% of CAD seats in industry is not connected to any data management solution. That was true few years ago. My hunch is that CAD/PLM companies is doing everything possible to change that status. It came down as an aggressive SMB-marketing of existing “scaled down” PLM solutions as well as introducing of new opportunities by leveraging cloud and open source. The biggest competition in SMB space is “status quo”. At the end of the day, if a company can make things done by using Excel, Office and email, you need to provide a very attractive solution to change that. Small doesn’t mean simple. SMB business is a complicated and tough. Price and implementation efforts are still two key elements that every vendors struggle when trying to provide a viable solution for SMB. Just my thoughts…

Best, Oleg