Why 2015 will be the year for PLM to rethink cloud?

I’m coming to COFES 2015 next week, which will take place in Scottsdale, Arizona. PLM and the cloud is one of the topic I’m planing to discuss during the analyst and user briefing sessions. I’ve been thinking to beat a schedule and share some of my thoughts on blog before to spark a conversation.

The last few years have been building some foundation for PLM and cloud. It is certainly became more mature from every standpoint – to understand cloud value proposition, try different business models, discover partnerships and build possible roadmaps for the future. It is different from what we had back in 2010. Cloud is pretty much everywhere these days. Vendors and customers are not asking a question if they need to focus on the cloud, but more about how to do that from different standpoints. Vendors are considering different technologies and ways to build their product differentiations.

The next web article Why 2015 will be the year that the cloud comes of age caught my attention few days ago. I liked a very precise definition of cloud characteristics: self-provision, elastic scale and pay per use. The real cloud solutions are leveraging that part of cloud technologies. Products like Arena and Autodesk PLM360 are probably best examples here. At the same time, it is not clear to me how other PLM vendors are going to fit that definition with technologies and strategies that more aligned with hosting of existing PLM platforms using IaaS platforms or specific hosting providers. You can take a look on my post about where to host cloud PLM.

My favorite passage from the article is related to the ability of cloud technologies to level the playing fields between enterprise giants and small ventures. Here is the passage I specially liked:

“Before the cloud, companies implemented new software and technology in a relatively traditional way through structured, company-wide deployments,” explains John Brennan, head of business development at international communications firm BT. What the cloud brings to the table is versatility that allows end users to invest in the exact resources that they need — no more and no less. Companies can switch over to lightweight, cloud-based deployments that require little in the way of on-premise configuration and management.

Lightweight, cloud based deployment is a key. This is where companies can deliver differentiations. This is where most of PLM vendors can see cloud advantages – to remove IT burden and to lower upfront implementation cost for PLM.

However, expensive IT and on-premise installation is only part of PLM deployment problem. Another part is related actually to the way PLM system is implemented, how it can streamline product development processes. In my view, this is related to a second point mentioned in the article – information exchange.

Today’s top technologies — and human-to-human communications protocols — are dependent on APIs. Thanks to very simple programming, applications can connect to support the swift and efficient flow of information ranging from product SKUs to media buys, CRM data, and credit card transaction details. “Cloud based APIs and microservices simplify information exchange,” says Chris Hoover, global vice president of product and marketing strategy at Perforce Software. “It lowers the barrier for new vendors to enter the market.” The result, according to Hoover, is a trend in which enterprise companies are moving away from a ‘top down’ approach to software and information exchanges.

This is a place where PLM systems are not aligned with a cloud. Few modern cloud based APIs are exposing REST API. However, most of PLM platforms, even hosted in the cloud, still provide only old fashion API frameworks. The level of openness and the way implementations need to be done in an organization is still the same for cloud and non-cloud systems. It is a lengthy process, which requires clarification of requirements and alignment with the organization.

What is my conclusion? PLM industry did a great first step by moving into cloud. Customers are actively engaging with vendors trying to understand cloud technologies and business models advantages. However, implementations are still very painful. So, how to change existing PLM implementation paradigm and make PLM implementations granular and painless. The question is on the table. Whoever, will be able to crack it, has a chance to win a future differentiation game in PLM. Just my thoughts…

Best, Oleg

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