PLM and integration business

Integrations. Enterprise software implementations are heavy depending on the ability to integrate different pieces of software. Each and every PLM implementation I’ve seen required some sort of integrations. It might be integration of CAD and PDM packages, which is relatively straightforward in many situations. But it can be also very challenging one, such as integrations between PLM and ERP functionality which can bring many organizational and technological difficulties.

Most of PLM integrations are doing by integration and service partners. It removes many problems with licensing of competitive software from different vendors. The integration business is tricky. As an example of turbulent character of integration business you can read news about Informatica buyout few weeks ago – Microsoft And Salesforce Join In $5.3 Billion Buyout Of Informatica. Not directly related to PLM world, but it gives some impression about business of integration software (related to both Informatica and Tibco):

But Informatica couldn’t ultimately find a better option for its $1 billion in annual revenue business, which grew just 10% on constant currencies in Q2 of 2015 on software revenue growth of 13% and subscription growth of 44% year-to-year. That rate of growth was essentially flat from the year before. Like competitor Tibco, Informatica had fallen into a low-growth, mature sales cycle after seeing its stock soar and then crater when the dotcom bubble burst. Both had eventually regrown into multi-billion valuations, but after years of sales growth to get back where they were. Tibco was taken private in December for about $4.3 billion, $1 billion less than Informatica.

After some thinking, it occurred to me that large enterprise PLM implementations are essentially integration projects. It combined from very typical set of integration steps – analysis of data processes in the organization, data modeling, defining flows of data, reporting and monitoring tools. PLM platforms are essentially data integration toolkits allowing to handle very specific set of information. Which connected me to one of my previous articles – How PLM can avoid cloud integration spaghetti. As PLM industry moves to the cloud, it must find a better way to deal with PLM implementations and its essential part – integrations.

It made me think about few possible ways PLM vendors can change a trajectory of traditional integrations and business strategies.

1- Open source PLM data toolkits. Open source software has a strong presence in a modern software eco-system. For many software vendors today, open source is a natural way to develop products. I’ve been watching few PLM open source initiatives, but most of them were lack of product maturity. Turning part of existing PLM platform into open source, can trigger a change in the way PLM implementations can be done. Aras Corp is the most closed example of such initiative. Although Aras Innovator core module is not open source, most of solutions developed on top of Aras are open source projects.

2- Automation platforms to trigger and action based integrations. You might be familiar with integration automation services such as Zapier and IFTTT. Both are extremely efficient to automate variety of integration activities between cloud applications. These automation services are providing development platform for other companies to create specific integration connection points and services. Jitterbit is probably the closed example of automation services in PLM ecosystem.

3- Integration businesses as part of cloud hosting services. In a growing eco-system of cloud PLM software, hosting providers can play a role of implementation and integration service providers too. In my view, it is a very dynamic space. All large manufacturing companies implemented on premise PLM as of today will start looking how to bring cloud PLM solutions – integrations will become the most challenging part of making transformation happen.

What is my conclusion? PLM implementations are complex. And “integration” is the most complicated part of it. The traditional PLM implementation approach is holding back PLM business. How to turn PLM implementations into agile and lean process? PLM integration improvement can be a good step to clean the mess of PLM implementations. Just my thoughts…

Best, Oleg