Alexa – Play La Cucaracha for CAD & PLM

I learned that today was Cyber Monday. The internet was overblown by deals and promotions. I checked few websites including Amazon. Meh… the things that were highly demanded and highly priced are still the same. But, I noticed something interesting. Retailers are giving huge discounts to smart speakers-  Google and Amazon are leading the game by discounting speakers for 20-90$.

I captured an interesting picture showing what people are doing with smart speakers.The top 3 things people do with their Amazon Alexa or Google Home are: set a timer, play a song, check the weather.

It is fascinating to think how useless are those speakers, but it is kind of cool. And it is getting traction and adoption. And what is amazing that how much vendors are pushing to sell these speakers to everyone for such low price. Why are they doing so? Where is the profit? Aren’t they cool and can be sold in Apple store for a lot of money? My hunch is that speakers for both Amazon and Google aren’t a point of profit. It is a tool to sell future services. It is hardware as a service model in front of our eyes.

So, what PLM vendors can learn here? In my view, it is a great lesson about future business models. Google and Amazon are giving away devices collecting our voices and other intelligence and then turning it into services they sell to somebody else.

In my earlier articles, I shared thoughts about future business models in CAD and PLM. It is essentially about two things – services and polyhedral business models. Existing business models are relying on expensive software licenses. Modern technologies in data management, cloud and analytics can create a new value and turn it into new business model. Free software can create a value that can be traded to different businesses. All together will create a completely new eco-system different moving away from software licensed packages, resellers and manufacturing companies required to buy expensive software.

What is my conclusion? My initial reaction was maybe some PLM vendors need to think how to create a simple and stupid function in their application to improve adoption? Something like “Hey PLM, tell me what is a weather on a shop floor?”…  I still kind of like this idea, although it might not work for manufacturing companies. At the same time, giving software for free and building intelligence is a technique widely used by new digital businesses for the last decade. And this is what CAD and PLM vendors need to learn sooner than later. 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.