A potential surge of CAD / PLM startups

Changes are everywhere these days. The eco-system of startup companies are transforming as well. TechCruch article The Ascent of Early-Stage Venture Capital speaks about structural reasons leading to a growing number of startups and early stage investments. I like this passage:

In the first years of this new Millennium, the cost of early-stage entrepreneurship dropped significantly. It is easier and more capital-efficient to start an information technology company, get product to market and reach large and expanding markets than ever before.

The following quote speaks about something that in my view is directly related to engineering and manufacturing software:

Selling to enterprises has become easier, because many software products can be tested offline without interfering with production systems; these products can also be purchased at the individual seat or departmental levels – unlike the past, when they were sold to the corporate CIO.

Are we going to have more CAD / PLM startup any time soon? This is a good question to ask. I can see some pros and cons to that.

Pros:

1- Technology on demand (cloud, database, etc.);
2- Web and open source development approach;
3- Significant amount of unsolved problems in enterprise and manufacturing companies.

Cons:

1- The complexity of the domain (manufacturing enterprise is a complex beast)
2- Enterprises are concerned to invest their effort in small and “untrusted” companies
3- The cost of integration into existing manufacturing enterprise IT tech stack

What is my conclusion? The barrier to create a new technological company is much easier these days. There are few potential disruption zones in manufacturing enterprises. Global deployment is a big mess. The technology that can decrease the cost of IT is an interesting opportunity. Costly customization is another one. If you can solve the problem of easy displacing of existing system, you have a chance to win. Also, any technology that solves painful problem and doesn’t require heavy integration with existing IT stack is a decent opportunity to look on. Just my thoughts…

Best, Oleg