How manufacturing will switch to cloud PLM?

How manufacturing will switch to cloud PLM?

Believe it or not, each manufacturing company has PLM. If your company is in the business of design, product development and manufacturing, product lifecycle management is vital part of the product. You have to have it. Here is the thing… not all companies call it PLM or use PLM software. As I like to say to my customers – You’re using PLM, but call it differently.

Cloud is one of the most important software trend of the last decade. The new technology is allowing to build elastic computing resources and use it to provide software as a service available to consumers and business users. For the last 5-7 years, I’ve been watching how manufacturing companies have started their journey to the cloud. The process passed many stages from initial ignorance and concerns.

According to the latest cloud PLM researches, manufacturing companies have strong desire to move to cloud PLM. I was reading CIMdata research eBook sponsored by PTC – Making the connection – The path to cloud PLM. You can download it here (sponsored by PTC) in exchange of your email. [Update: 12/4] Please note, CIMdata research was sponsored by multiple vendors. According to CIMdata Stan Przybylinski , Autodesk, Oracle and Siemens PLM Software – also have (or will have) their own variants of this publication. Please send me links, I’d be happy to include them in my blog. [End of update]

The following passage is fascinating:

The cloud services industry was worth over $125B last year. Since 2011, overall growth has exceeded 500%. And while ERP and CRM are the most common enterprise solutions in the cloud, PLM is right behind them.

Almost 80% of manufacturers already use cloud-based services, according to a recent CIMdata survey. And more than 70% of companies are interested in cloud-based PLM. It’s easy to see why. Cloud computing services cost less up front. They’re easier to maintain. They scale on demand. No traditional infrastructure solution competes with that.

My favorite part of the e-Book is a slide that shows how companies will be moving to cloud PLM. Here is a picture from e-Book.

CIMdata doesn’t provide any data points to indicate what is preferred method for manufacturing companies moving to the cloud. I look forward to future CIMdata researches to provide more information. However, from my experience, replace won’t be a favorite step. If company already invested in PLM solution, the move will be hard to justify in terms of ROI. Augment and Increment are the most interesting use case. It can provide fast ROI and best value to manufacturing companies.

In my view,  e-Book is focusing on existing PLM implementations and missed many companies that ain’t using PLM software. CIMdata calls it – spreadsheet problem.

In CIMdata’s engagements with clients, usually in product engineering, we find that spreadsheets are pervasive and entirely unmanaged. They belong to individual users, and are freely shared. There is no way to track changes, and no metadata information to describe the provenance or suitability. Some companies have elaborate spreadsheets that are used to support critical up-front decisions on product configurations. At others, spreadsheets are applications that invoke macros and scripts, and even other applications. Often, there is no governance for spreadsheets that contain data such as material properties.

For companies using “spreadsheet-ware”, cloud solution can be way to jump into a better organized world of data management to manage product information, improve collaboration, data share and basic processes.

What is my conclusion? Manufacturing companies will be actively searching how to adopt cloud PLM solution in the next few years. A combination of new technologies and business models will provide a unique opportunity to provide a very unique value proposition. Augmentation and incremental move to cloud PLM will play a key role in this migration process. This is an opportunity to change business landscape of PLM software. Timing is everything. You can bring right technology, but time should be right. And the time is great now, in my view. The company to come with the right combination of tools and business model will be able to acquire new customers to replace PLM spreadsheet and introduce augmented solution to integrate with existing PDM / PLM systems. 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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