For the last few years PLM vendors made a big step towards acceptance of cloud technology, SaaS application and subscription business model. At the same time, cloud PLM sales are not going as well as vendors would like to demand. The adoption of cloud technologies in PLM segment is behind of similar activity in other industry segments. Analytic and research company CIMdata recently announced cloud PLM research sponsored by all major PLM vendors with the attempt to understand what is behind slow cloud PLM adoption.
The initial research program will focus on the collaborative Product Definition management (cPDm) segment of PLM, defined by CIMdata as, the category of data and process management solutions at the core of most industrial PLM implementations. In 2015, CIMdata estimated the cPDm segment at over US$5.4 billion, up more than 9.1% over 2014, in constant currencies. At present, a small portion of this estimate is cloud-based, but the segment is poised to grow significantly in the next few years and this research program will help CIMdata and the broader PLM Economy understand this market evolution.
While cloud PLM business is not going as well as demanded by vendors, some other enterprise software vendors are looking for enterprise cloud domination. And Microsoft is clearly one of them. My attention was caught by 1reddrop article – Microsoft Cloud Initiatives Lining Up for Global Enterprise Segment Domination speaking about how Microsoft cloud services can be used to provide enterprise level solutions combined of IaaS and SaaS products. Here my favorite passage:
….line them all up – Microsoft Azure for your IT infrastructure, Office 365 with applications like Skype and Microsoft Teams to address your software needs for internal operations, Dynamics 365 to help you manage sales, customer relations, resource planning and so on, and Linkedin for your professional networking needs. That pretty much covers all the software a company would ever need, irrespective of the size. Granted, there will be specific niche software applications that companies might need, but Microsoft’s lineup will cover most of your needs as a company. More specifically, an enterprise-level organization.
However, the following passage caught my special interest:
As Office 365 kept moving up the charts, Microsoft has been slowly adding muscle to Dynamics 365, an enterprise management software application that covers the tens of billions of dollars worth Customer Relationship Management and Enterprise Resource Planning segments.
It made me think about potential of Microsoft cloud infrastructure and SaaS services to provide viable alternative to many functions supported by existing PLM applications. Bringing up cloud service can change the way application is delivered and eliminate “all or nothing” approach is adoption of PLM software suites. Manufacturing solutions combined with granular services can provide a way to manage data services (spreadsheets), item master management, bill of materials, workflow processes and many others. While manufacturing companies are already using Office365 SaaS application, to jump into advanced solution almost covering PLM functions can be an interesting surprise for PLM vendors.
What is my conclusion? Cloud technologies and SaaS applications can potentially change the landscape of existing application boundaries. Will Microsoft Office and Dynamics SaaS apps will be able to provide a viable alternative to cloud PLM (cPDM) packages? This is an interesting question to ask and I bet some of Microsoft strategists might be asking this questions these days. 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.
Image credit Microsoft Dynamics
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