Who is a competitor of cloud PLM?

Propel PLM article – Can you trust your on-prem PLM vendor to evolve raises a question about how efficiently and quickly existing major PLM platforms can move from perpetual licenses and on prem- installations to the cloud.

Trust me, it is a very painful process to transition a product offering from on-prem to a subscription model. I’ve watched ModelN, CallidusCloud, Satmetrix, Vendavo among others, try to make the move. It can take a few years to turn the aircraft carrier. Initiating change with a big price increase and forced transition to a new platform may make sense to the accountants and incentivize salespeople, but it may not be in the best interest of customers.

Existing customers of on-prem PLM should carefully scrutinize the price increase and the hassle of redeployment when being pressured to move off on-prem. It’s likely a better choice to move to a modern and much more customer-focused approach to PLM, rather than stay on-prem for another year or two, and then be forced to re-deploy later.

Article is a blunt marketing and basically advising companies to move into new cloud PLM systems such as Propel PLM. Cannot blame Propel PLM – enterprise software business is not simple. But it made me think about PLM competition and introduction of new PLM systems.

You can catch up on the topic of PLM vendor selection and competition in the following articles – Why PLM sales stuck in organizational politics; How PLM vendors can compete with manufacturing status-quo ; PLM competition with status quo.

My main point is that status quo is the biggest competitor for new PLM vendors. The lifecycle of existing PLM implementation is shockingly long. It is not uncommon to see how after almost a decade of PLM implementation, companies are coming to a production PLM setup that can bring real value to user. Obvious question – after ~10 years investment to move from a system with established processes, implemented software and proven relationships is hard. Therefore, ROI should be one of the key questions if you have in mind to replace existing PLM system.

So, how to get that magic sauce of ROI combined with functions that will convince customer to drop existing system and switch to another PLM. Unless, you’re dealing with extremely unsuccessful PLM sales and company that really struggle with existing PLM implementation, you might be out of luck to sell something. Thinking about complementary solution can be much more productive discussion.

What is my conclusion? The competition in PLM segment is increasing. However, status quo is the biggest competitor. Manufacturing companies will require a special trigger to start jumping from existing PLM implementations with lot of custom features  and move to the brand new products. I will be watching the path of new vendors such as Propel PLM and the way they are going to compete with PLM status quo. Just my thoughts…

Best, Oleg

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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.