Will Microsoft Azure Stack become a viable option for hybrid cloud PLM?

Hybrid cloud is one of these words that makes IT to feel that they can “have cake and eat it too”. It is a dream option discussed by IT organizations deployed PLM. It removed the need to take a decision for one of cloud options – private vs public; and it also provide a route towards creating a synergy between existing PLM installations and agile cloud services. Earlier this year I shared some of my thoughts about hybrid cloud routes.

Check my earlier blog –  Will PLM take a hybrid route in 2017. The following passage is a prediction of IDC about cloud (SaaS) development. Check more here:

“Demand for SaaS enterprise applications is accelerating and exceeding the demand for on-premise applications by five times (during the five-year forecast period through 2018, SaaS revenue is forecast to grow at 17.6% CAGR, while on-premise revenue growth is only forecast at 3.1%). Generally, wherever new enterprise application software is required, the expectation is that SaaS applications are preferred, particularly for customer relationship management and enterprise resource management applications. However, most of the enterprise software currently in use today and in the near future remains on-premise, particularly in the areas of supply chain, manufacturing, and engineering…

Th announcement of Microsoft to release Microsoft Azure Stack is an interesting event that caught my attention yesterday. TechCruch article gives you some idea about Microsoft plans. Here is an interesting passage:

Microsoft’s cloud strategy has long focused on the kind of hybrid cloud deployments that allow enterprises to run workloads in a public cloud like Azure and in their own data centers. Azure Stack, its project for bringing the core Azure services into the corporate data center, is the logical conclusion of this. If developers can target a single platform for both the public and private cloud, the thinking goes, then hybrid deployments become almost trivial.

It made me think that IDC prediction can work very much aligned with Microsoft strategy to bring Azure stack and get it seamlessly integrated with Microsoft Azure public cloud platform. Manufacturing companies will have lot of advantages to secure existing investment mostly done in on premise applications and possible expansion of cloud SaaS applications from public cloud.

However, not everything is easy and simple. In PLM, most of these things are in slides and paper only. PLM vendors are running their backend PLM platforms on platforms different from Microsoft. All 3 dominant PLM platforms aren’t on Microsoft stack. The only one running on Microsoft backend is Aras Innovator, but despite it was actively reporting about significant big wins,  Aras marketshare cannot be compared with top 3 vendors – PTC, Siemens PLM and Dassault. Without Azure Stack on premise, the idea of hybrid cloud is just an idea. And the value of Microsoft Azure SaaS platform can be only be proven by some economical reasons and low cost of PLM SaaS offerings. And for the moment, I’m not aware about any PLM SaaS vendors who built significant SaaS presence on Microsoft platform (If you’re aware about one, please let me know).

What is my conclusion? The only viable PLM vendor ready to provide cloud solution on Microsoft stack is Aras. I wonder what is a cost of Aras on Azure, but I wasn’t able to find this information. In PLM, the value of SaaS and cloud platforms will be defined by the total cost of a solution. Without significant cost advantages, manufacturing businesses won’t see any reason to move to cloud / SaaS and risk their PLM on premise investment. 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.

Image credit TechCrunch article