Rethinking cloud PLM value proposition

Rethinking cloud PLM value proposition


Cloud PLM adoption is on the top of minds for software vendors and PLM researchers. Catch up on the topic earlier in my blog – Thoughts about PLM and cloud adoption 2017 and CAD and PLM cloud surveys. According to Stan Przybylinski, Vice President of Research, CIMdata, vendors should be more vocal about benefits of new approach and also present clear differentiation between on-premise and various cloud options.

The last one is actually a problem for many PLM vendors. Especially for those vendors providing dual support for PLM platforms (on premise and cloud hosting). Some of them are extremely flexible by allowing to choose between public and private cloud options. You might think to have more options is an upside… Turns out more options is not always a good thing. To provide more options can overwhelm customers and lead to fewer sales. Established PLM vendors were catching up on “cloud trend” and therefore came with cloud-ready strategies allowing to host existing PLM platforms using IaaS services or private data centers. In all these scenarios, cloud is just an option to take PLM servers and move them to IaaS / hosted location. It eliminates IT efforts and helps customer to start implementation faster. Nothing wrong with such approach, but… here is the thing. This is a very narrow way to think about cloud long term value proposition.

If you step back and take a wider perspective, you can find a different value of cloud services and systems. Cloud is an enabler for many new technologies and innovation. Especially all technologies focusing on data, analytics, IoT, machine learning and many others. All cool stuff IT loves these days can be much easier achieved once PLM systems are using cloud not only to hosting PLM servers.

Forbes article – Innovation Made Easy: The Cloud’s Long-Term Value Proposition gives you an interesting summary of how cloud technologies can be applied and used beyond hosting virtual servers on AWS and data centers. Here is my favorite passage from the article:

Now, let’s consider a company that’s using a cloud software-as-a-service (SaaS) provider for its core applications, and let’s say it wants to explore big data. It’s a faster, simpler and cheaper proposition as a result of the cloud move. Most of its data is already in the cloud. It would be easy for the company to provision a big data service, and try it out without a huge upfront commitment. Better yet, it would have access to third-party data sets to enrich its own. More data, better insights. Plus, the very best tools, as well as guidance on how to use them.

If the data jockeys at the company found something interesting, it would be far easier for them to stitch a recommendation engine together with a production application. Everything needed is right there, ready to use. Or, better still, the company wouldn’t have to do that at all. The best SaaS applications are already starting to apply advanced analytics to everyday business processes, as an embedded feature.

Let’s revisit our elevator company. If its SaaS field-dispatch application provider also had an IoT service, it would be trivial to connect the two. Instant Internet of Things. No drama. The exact same thing could be said about AI and machine learning. About blockchain. About chatbots. All the advanced technologies are right there, ready to be integrated into what you’re using today, or they simply become a feature of the SaaS application you’re already using.

I hope you’ve got my point. Cloud is first about how computing services and data can interplay together to generate a better value. To sell cloud PLM system to save on IT cost and simplify deployment effort is “so cloud 2012”. Ask vendor about other values beyond IT cost,  setup time and upgrades. This is probably a source of differentiation Stan Przybylinski, Vice President of Research, CIMdata was hinting about during CIMdata forum in Ann Arbor few weeks ago.

What is my conclusion? To think cloud PLM is about how to move servers from IT department to a cloud location is very naive approach. It was a first phase of cloud PLM transformation. Future of cloud PLM is in providing data analytic, machine learning and better decision support. It is value today generated by global web companies – Google, Facebook, Airbnb, Uber… (you can continue the list). To move from data management to data intelligence – this is an ultimate value of cloud PLM in the future. 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


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