PLM Cloud Transformation Readiness

If you want to get up to speed with everything going on in technology, navigate to Kleiner Perkins venture partner Mary Meeker’s annual Internet Trends report 2017 here. The report is delivered annually and you might remember my blogs following 2016 and 2015 reports – Data as a Platform and future manufacturing intelligence and Re-imagining PLM one process at time.

Huge slide deck (~355 slides) with lot of insight on trends, numbers, products and what big is coming next –  worth spend some time to review it. However, I want to point your special attention on few slide related to cloud and enterprise software. The subtitle “The cloud- accelerate change across enterprise” speaks for itself. Here are 6 slides I picked up from the presentation.

1. Cloud (public and private) spending is almost the same as data center spending

2. Public cloud adoption is growing

3. Top 3 concerns – security and uncertainty about cost saving, governance and lock-in.

4. User expectations and business model change.

5. Cloud usage by manufacturing and enterprise readiness

While, I’m still looking forward to learn more from CIMdata cloud PLM research sponsored by major PLM vendors, I want to share some of my observations.

Public cloud use is growing, but it is very rare to see PLM vendor deploying its solution using pubic cloud. Even when it happens, most of products don’t offer SaaS application and hosting existing product in the cloud.  This is not a scientific conclusion, so if you have numbers that can prove the opposite, please share.

Cost saving is questionable when it comes to cloud PLM solution. The cost of most affordable cloud PLM product is about 100$ /month /user sold on the basis of annual subscription. This cost doesn’t include implementation services and customization. So, overall PLM cost is still 6 figures and it is very high.

PLM solutions are sold mostly by direct channel or by specialized sales forces trained to sell enterprise solutions. The selling lifecycle is long and I can see very limited signs of PLM vendors adopting bottom up selling approach.

What is my conclusion? Do you think PLM vendors are ready for cloud transformation? I doubt that. PLM vendors seems to be missing cloud transformation for the enterprise by looking at cloud as an alternative for IT infrastructure for existing products. There is nothing wrong in such strategy except of potential danger to miss the opportunity to change existing PLM paradigms. Cloud innovation open a new opportunity to change PLM market and it would be a big mistake that can be done by PLM vendors. 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.