Chasing the right PLM cloud

Cloud technologies and applications are trending. Just few years ago the most of cloud PLM debates were about “cloud vs. no-cloud”. You can still meet people thinking “cloud PLM” will not happen in their lifetime. But the trajectory towards cloud applications is very visible. Every single PLM vendor has some sort of cloud strategy these days. I caught the following techno-marketing cloud strategy slide during Siemens PLM analyst conference in Boston last month (thanks to all analysts and industry observers tweeting about the event – you can see them here #splm16)

With abundance of cloud options, the question how to select the right PLM cloud or how to choose right cloud strategy for your company is the one IT and PLM managers are asking these days.

You might recall my blog back in 2014 – PLM cloud options and SaaS survey shows statistics and prediction about usage of managed services, self-hosted solution and cloud IaaS platforms.

Cloud options are not the same. So, how to chose the right one for your company?

Jim Brown of Tech-Clarify came with an interesting research e-Book: Cloud options for product innovation and development . The e-book is available for free thanks to Siemens PLM sponsorship. I captured the following table summarizing important factors to be considered when you decide about cloud options. Take a look and draw your opinion.

Here is what I think. The comparison looks like all cloud options is a tradeoff between cost and functionality. The three top lines comparing managed services and 2 options for cloud SaaS looks almost identical and according to Jim brings only limitation in customization and integration.

Security

Although I agree, security is the responsibility of all parties, in many cases it is one of the most important factors in decision about cloud PLM options. In some specific situations, on-premise solution is the only possible option. Some companies are not allowed to put data on public cloud. Certified managed services can be an option, but you should consider right level of security clearance and certification. To sum up, security is the first check mark in our cloud options assessment.

Integration and customization

Historical perception was that SaaS or cloud software brings limitation to many aspects of how system configured and connected to other systems. However, in many cases, this is an outcome of adaption of existing on-premise systems to cloud environment. If most of customization of on premise PLM system was done using SQL command injection, than you are out of luck in the cloud environment. But, new SaaS tools developed for the cloud won’t have such limitation. It won’t give you access a database using SQL commands, but it will give you REST API and many other tools acceptable for cloud environment. In my view, Salesforce.com and its cloud platform is a very good example of mulit-tenant SaaS application and platform with full spectrum of customization and integration.

Cloud and cost reduction

Cloud has a potential for a huge cost saving for vendor. But it won’t work for everyone. I found another Tech-Clarify research paper – Issue in focus: Assessing the cloud PLM opportunity. The publication is sponsored by Autodesk. In my view, the following passage explains very well the significance of cost advantage cloud system can bring to user.

An effective cloud offering delivers value more efficiently by leveraging shared resources. Cloud offerings and business models reduce time and cost dramatically by eliminating waste and redundancy. Cloud solutions use a concept called “multi-tenancy” where the software environment is shared across multiple companies. Work is eliminated (or greatly reduced) by this approach, allowing cloud providers to pass savings along to their customers in the form or reduced subscription costs.

Cloud solutions offer other benefits as well. In a traditional environment, a new “release” is released every year or two bringing large changes at once. Each takes a significant effort to implement so companies typically skip a release to avoid the upgrade effort. This is understandable because of the disruption, but it also means they are running an older version with less functionality. In the cloud environment, on the other hand, new functions come online as they are available. This allows companies to absorb the changes incrementally over time instead of having to relearn an entire system. In fact, many companies get so far behind in upgrades and make so many customizations that every upgrade is really a re-implementation as opposed to an “adopt as you go” approach.

What is my conclusion? PLM software is going through a phase of transformation. Cloud opportunity is here and everyone in the market is going to embrace it. Established PLM vendors will defend their software suites by providing more deployment options to bring software to the cloud as well as on premise. It will be a tradeoff exactly how it presented above. At the same time, new products will disrupt PLM market with new capabilities and level of cost effectiveness that will be out of reach for hosted services. The economy of scale will play a key role here. Just my thoughts..

Best, Oleg

Want to learn more about PLM? Check out my new PLM Book website.

Disclaimer: I’m co-founder and CEO of openBoM developing cloud based bill of materials and inventory management tool for manufacturing companies, hardware startups and supply chain. My opinion can be unintentionally biased.