Cloud PLM is ready for takeoff in aerospace & defense

You probably heard it many times for the last few years – cloud PLM is not for everyone. And when things are coming to aerospace and defense (A&D), most of people said that cloud won’t be coming soon to these industries. But it looks like are going to see some changes in the horizon of cloud PLM for A&D industry

The conclusion from recent publication by Jim Brown of Tech-clarify researching A&D industry is actually different.  Jim Brown got over 250 survey responses from manufacturing and engineering services firms, and took a closer look at approximately 70 of them that serve the A&D industry. And here is the conclusion – A&D is (Generally) Open to the Cloud.

Manufacturers across industries have begun to adopt cloud solutions, and Top Performing manufacturing companies are more open to using cloud solutions, although it’s important to note that this finding is not specific to the Product Innovation Platform. This survey shows that A&D is actually a bit less conservative about the cloud than some might think, at least on a general level. When asked about their company’s strategy or standard for the use of cloud IT solutions, over one-third say they choose the most capable solution, and another 15% favor or use the cloud unless no other software is available. On the other hand, only about one-quarter of A&D companies surveyed say they do not consider or allow cloud.

I capture the following chart:

It is fascinating to see, but the reasons to adopt cloud are more-less the same as in other industries – easier for people to work any time and easier access to data.

However, my favorite passage from Tech-Clarify article was actually related to PLM projects and cost reduction:

Implementing a cloud solution offers benefits along implementation, operational, and business dimensions. While these cloud-specific benefits are important, it’s important to recognize that most companies rightfully place a higher priority on PIP functionality. A&D companies are not willing to trade off the PIP features that directly impact their success drivers – quality, performance, reliability, innovation.

But A&D companies also need to reduce cost. PIP capabilities can deliver on this need, and cloud deployments can further reduce cost even further. The cloud also provides unique opportunities not available with traditional implementations. These include instant scalability, “elastic” computing power, and the valued-added services capability viewed very favorably by survey respondents

It made me think about functions that can be only available using cloud technologies such such as instant data access to specific group of people, real time collaboration and others. This is a place where cloud technologies can shine. Combining with cost optimization based on shared computing resources, cloud has differentiation and an opportunity to change the industry landscape. A&D industries are using advanced networks of contractors and suppliers and they might be a potential first group to leverage an improved data access.

Possible strategy for cloud PLM providers is not to match traditional PLMs with features, but provide a subset of unique functions that unique for cloud technologies and make it very affordable. It can be used to a certain degree and balance is important. If somebody can pick the right balance of technology and price, it can open an opportunity that wasn’t available before.

What is my conclusion? A&D is long time example of the industry that low on the list of cloud-based opportunities. Tech-clarify research shows some interesting aspect of large scale PLM deployments that open to cloud technologies. Expensive systems have huge potential for cost reduction and cloud PLM might be a way to save big time in A&D PLM deployments. But to make it happen, cloud PLM systems should provide a way for large network of PLM users in a typical A&D company to take cost of the system down. Cost reduction is not a simple thing – I wonder how A&D are going to resolve it with old fashion tools and methods. 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.