Thoughts about PLM and Cloud Adoption 2017

While PLM research and analytic companies are running cloud PLM surveys to understand what causes slow cloud PLM adoption, manufacturing industry segment is ahead of others in adoption cloud technologies. Navigate to the following link – Cloud Computing Trends 2017 and check-out few interesting diagram published there. The one that captured by special attention –

Here is an interesting passage:

….there are clear trends in both the variety of cloud services used by organizations and users as well as the volume of data uploaded each month. Technology companies use a wider variety of cloud services than any other industry, with the average company using 2,033 distinct cloud services. That’s followed by manufacturing (1,837 services), and business services (1,771 services). Government agencies use the fewest cloud services, on average, at just 944 per agency.

Another interesting diagram presents usage of cloud service by category.

Collaboration continues to be the category with the greatest variety of cloud services in use by a wide margin. The average organization uses 210 distinct collaboration services, followed by 76 file sharing services and 67 development services.

So, manufacturing and collaboration are almost leading cloud system adoption and, at the same time, cloud PLM adoption is very low. This is an interesting paradox. Cloud adoption 2017 research gives you top 20 enterprise cloud service providers. list. PLM vendors aren’t there. Actually ERP systems are represented by Workday only.

In Q3, 71.3% of the cloud services in use by the average company were enterprise cloud services and these services accounted for 71.6% of data employees uploaded to the cloud at work. Microsoft delivers 5 of the top 20 services. From a security standpoint, the top 20 enterprise cloud services are significantly more likely to have enterprise-grade security controls than the average enterprise service (80% vs. 9.3%).

What is my conclusion? Manufacturing is leading in enterprise cloud service adoption, while transnational business systems such as ERP, PLM, Supply chain management, Manufacturing execution and other similar systems are far from taking a leading seats. My hunch those vendors are far behind in the technologies adoption and their ability to deliver enough differentiation factors. In other words, I already have PLM systems and there is no practical reason (even more ROI) in moving PLM to the cloud. The main reason could be simple – PLM has still on premise paradigm that doesn’t leverage much environment. Delivery existing PLM application using IaaS infrastructure is possible but ROI isn’t clear. It is a time for PLM strategists to think about what elements of existing PLM paradigm should be revisited to change the trajectory of cloud PLM adoption. 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