The hardest thing in technology is to disrupt yourself. My attention was caught by an old interview with former Solidworks CEO Jeff Ray speaking about how they created a team of people working to re-invent Solidworks. The interview is here. Here is the passage that caught my attention.
Deelip: I guess that also the time when DS got in touch with SolidWorks to work on the cloud stuff.
Jeff: For a while we were following parallel paths without knowing it. Of course, I was sharing with Bernard my ideas and concerns. But when we launched our project for the future we didn’t launch it by saying “Let’s move to the cloud“. What we said was “Let’s kill SolidWorks the way SolidWorks has killed some other companies“….
Deelip: How large was this team? And who was heading it?
Jeff: Less than 20 people. At that time they were still reporting to Austin. It was very much like a raw startup. They didn’t have enough people. They didn’t have enough money. They didn’t have all the fancy systems.
Deelip: And parallel to this DS was trying to do the same thing.
Jeff: Yes, and as we started to sit down and talk about things we realized that we were solving the same needs because there is not that much difference in the customers we serve when it comes to design engineers. So that’s when we said, “Let’s start working together“. And we then split up the work.
Five years is long enough even in CAD and PLM industry to take a look back, learn from the past and think about the future. In my view, Onshape and Autodesk Fusion360 are two main candidates to disrupt Solidworks business today.
At the same time, the trajectory of PLM business was unchanged for last decade. I observed two potentially disruptive events that happened with PLM products and companies for the last years – 1/ open source; 2/ cloud technologies. Open source disruption of ended up with business model transformation. Aras is the leading company in that segment by providing free Aras Innovator license and selling subscription services. Cloud PLM transformation, pioneered by Arena (bom.com) back in 2000, received very strong push from Autodesk in 2011 – Autodesk PLM360. But, in my view, it slowed down because of multiple factors – one of them is complexity of PLM implementations. All PLM companies ended up providing some sort of “cloud PLM”. If you want more info, read my last PLM cloud service comparison here.
Is there a way for PLM business to disrupt itself? Here is my take on 3 possible options for any PLM vendor to disrupt itself in coming 2016.
1. The biggest problem is a biggest opportunity.
This is a broad statement. But it usually true for any company and business. If “implementation” is a problem for true PLM SaaS business, to bring a new way implementing PLM software, changing PLM implementation paradigm or finding a solution for companies to start using PLM software in an easier way can be disruptive. Another opportunity can be to address new market segment.
2. To create unholy alliances
Most companies feel most comfortable working with the traditional companies and suppliers in their industry. For PLM companies, CAD business and engineering was a comfort zone for many years. Maybe the opportunity to partner or create PLM solution, which will use other than CAD software as a platform?
3. 10x moonshots
Last one, but very important. This is mostly technological approach. In a nutshell, it means to re-think what PLM does with new technologies available on the market. It might be a technology solving some fundamental problems of managing data, processes, integration, etc. It can be also an approach of changing fundamental segments of PLM market and delivery solution covered today by two or more vendors.
What is my conclusion? Customers are the main reason for slow pace of changes in PLM software. Manufacturing companies are usually very conservative in everything that related to their working environment. They don’t make changes often and keep using systems for a very long period of time. CAD and PLM software is used by engineers for many years. Which pays high dividends to established vendors. It is a great news for existing companies, since it gives them long time to try, innovate and make changes. At the same time, it is very hard to compete with status quo and inertia, which is main challenge for most of innovators in PLM domain. Just my thoughts…
Best, Oleg
