When I was a child, I remember my parents made annual subscriptions on newspapers and magazines. Once done, I enjoyed some of my favorite journals and publications distributed to our mailbox on monthly basis. I found an interesting article about the history of subscription publishing in America in 19th century and roots of subscriptions are going long way back in 17th century.
Two precursors to subscription publishing come together in nineteenth century America. The first, chapbooks, were cheaply printed works with crude images and paper covers sold door to door. The second were works written by authors for an economically privileged audience. Well-to-do patrons, to whom such works might be dedicated, or subscribers who paid in advance for the opportunity to acquire a work: such an audience was able to make a publisher’s investment secure even before a book was printed and sold.
Subscription publishing became an accepted method of publication during the seventeenth century. As a way of acknowledging subscribers, authors included printed lists of subscribers in the work, often at the beginning, in place of or in addition to a dedication. The works typically sold by subscription in the seventeenth century were atlases, geographies, and histories, especially Bible histories. But important works of English literature were also published in this manner. Among them was, for example, the first illustrated edition of Milton’s Paradise Lost, published by the great London publisher, Jacob Tonson in 1688. Its subscriber list names more than five hundred prominent individuals.
Subscription business model is everywhere – lawn mowing and snowplowing services, cable television, satellite radio, cell phone companies, internet providers, software providers, financial services firms, etc. Introduction of cloud technology and hosted software open the door for broader adoption of so called “Software as a Service”. Ignore technology differentiation – SaaS is a subscription business model. Technology is just making distribution easier.
PTC blog Subscription is Mega Trend in 2016 speaks about manufacturing services and subscriptions.
In the manufacturing space, high-maintenance, software-intensive products—like airplanes, autos, and medical equipment—have proved natural candidates for subscription, and technology companies too are beginning to realize the benefits to offering flexible and customizable subscription plans. Subscription has myriad advantages for both vendor and customer, and over several decades many companies have slowly morphed their traditional product offerings into something that more closely resembles a subscription to a service.
PTC and other PLM vendors are actively shifting to subscriptions. To change business model is a biggest shift every business can think about. It brings transformation and challenges to CAD and PLM vendors. Read more here about PTC and here about Autodesk.
Massive shift to subscription made me think about data as an important element in decision process related to PLM software service vendor. Manufacturing business has long lifecycle of product development, manufacturing, maintenance and support. The data about product lives many years after product is manufactured and used in many business related scenarios. Growing interest in IoT technologies is making product data even more important.
So, the demand for long data retention is high. With subscription software it can be a bit tricky. Data is located in PLM vendors’ data centers, locked into proprietary formats, distributed among multiple databases. It can raise a question from many IT managers thinking how to support long time data retention strategies for business.
PLM vendors are not alone in the race to support data transparency. You might remember my blog few years ago – Cloud and PLM data liberation. I like the example of Data liberation strategies by Google. You can always go to Google Takeout and take the data created using Google tools down to your computer or personal storage. Since the time I published that blog in 2012, all PLM vendors shifted to support cloud and subscription models. However, I’ve been looking for solution similar to Google Takeout provided by cloud PLM vendors and didn’t find anything similar to that. If you’re aware about such solution, please let me know in comments. I consider to add it to future revisions of my PLM cloud service comparison table.
What is my conclusion? For many years, business models where built customer value based on the amount of data created using CAD and PLM tools. To jump outside was hard. To export data is a painful and complicated process. Customers hate data locking strategies. As manufacturing companies are considering cloud CAD / PLM subscription, data transparency and ability to export data will become of the interesting differentiation. It will be an interesting decision for software vendors. The shift might reconsider some fundamentals of business and value models. Just my thoughts…
Best, Oleg
