A blog by Oleg Shilovitsky
Information & Comments about Engineering and Manufacturing Software

PLM software and future enterprise cloud wars

PLM software and future enterprise cloud wars
Oleg
Oleg
29 October, 2017 | 3 min for reading

Bob Evans’ Forbes article  – Why Amazon Won’t Catch #1 Microsoft In The Cloud: Because It’s All About Software caught my attention earlier this week. It makes an interesting comparison between superiority of Amazon achievements in the cloud development and cloud software role. According to the article the future of cloud competition is moving towards sophisticated software. This is a place of future cloud wars. Read the following passage

Without question, Amazon was the prime mover and category king in the first wave of cloud computing, and almost single-handedly turned the concept of self-service access to high-volume computing power and infrastructure from the exclusive province of extreme techies to a commodity-like utility that millions could easily access and afford.

True to its corporate DNA, Amazon—tied for #2 on my Cloud Wars Top 10 ranking with Salesforce.com—delivered not only an unprecedented depth and breadth of products and services, but a simple and elegant user experience combined with relentless price-cutting loved by customers and loathed by competitors.

But as the Cloud Wars shift dramatically and strategically away from brute-force hardware to increasingly sophisticated and aften-dazzling software, I believe Microsoft–#1 on my Cloud Wars Top 10—will continue to reign supreme over Amazon and every other cloud competitor because of Microsoft’s 42-year history of deep immersion in software.

Check the following picture with comments:

With the market share in IaaS close to 40%, I doubt somebody will challenge Amazon leadership position in this space in the near future. However, it made me think about how cloud software wars. As we have seen many times, in case of enterprise software and technology, the software becomes the ultimate factor and competitive advantage. The cost of services, reliability and other IT aspects are important, but functions are really important. And as much as I think about manufacturing enterprise, these companies won’t move to the cloud without software that can provide functions required to run product development, production, manufacturing planning and operation.

An average manufacturing company today is running majority of its engineering and manufacturing software stack at least for 10 years. The number of legacy software is growing and in most of the cases, large manufacturing companies are moving to new software only when previous one is dead or not supported. At the same time, the number of manufacturing and engineering businesses using Excel and spreadsheet to fill the gaps between CAD, PLM and ERP software is probably close to 100%. The enterprise and manufacturing world is connected by Excel. This is sad, but true.

PLM and related engineering and manufacturing software delivered seamlessly from the cloud with unique set of functions can provide a differentiation that is much needed for engineering and manufacturing IT to decide about future moves in business process improvement.

What is my conclusion? Engineering and manufacturing software can play an active role in transition of manufacturing companies to cloud software stack. This is a place where differentiation can be achieved by replacing of 20 years old client-server software packages and getting rid of Excel spreadsheets. A new type of native cloud multi-tenant enterprise software services will play an important rule in future cloud-stack competition. 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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