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

CAD, PLM, Disruption and Long Lifecycle 

CAD, PLM, Disruption and Long Lifecycle 
Oleg
Oleg
3 September, 2018 | 3 min for reading

It is a formal long weekend in United States. But things aren’t coming to rest, not on my side at least. When you work in a global community of people from Boston to New Zealand using OpenBOM, there is always somebody online doing some work. This is a new uncharted behavior in a community of engineering software which is available online for everyone.

I was catching up on some of online articles. Benedict Evans blog, is one of my favorite type of reading on weekends. You can always get some food for thoughts in his articles. This week it was about Tesla, Software and Disruption. If you’re fan of Tesla and automotive disruption, I’m sure you will find lot of interesting observations and data points.

My favorite part of the article was related to disruption and some historical examples of disruption. Disrupting forces are interesting, especially when you think who will be getting value of these forces. Here is an interesting example of PC disruption. Turns out the biggest beneficiaries of PC disruption were Intel and Microsoft.

Meanwhile, the people who are first to bring the disruption to market may not be the people who end up benefiting from it, and indeed the people who win from the disruption may actually be doing something different – they may be in a different part of the value chain. Apple pioneered PCs but lost the PC market, and the big winners were not even other PC companies. Rather, most of the profits went to Microsoft and Intel, which both operated at different layers of the stack. PCs themselves became a low-margin commodity with fierce competition, but PC CPUs and operating systems (and productivity software) turned out to have very strong winner-takes-all effects. Being first is not the same as having a sustainable competitive advantage, no matter how disruptive you are, and the advantage might be somewhere else.

But my favorite passage is the following one:

But the history of the tech industry is full of companies where having a lovely product, or being the first to see or build the future, were not enough. Indeed, the car industry is the same – a great, innovative car and a great car company are not the same thing. Tesla owners love their cars. I loved my Palm V, and my Nokia Lumia, and my father loved his Saab 9000. But being first isn’t enough and having a great product isn’t enough – you have to try to think about how this fits into all the broader systems.

This aspect of “fit” is an absolutely key if you think about engineering and manufacturing software. Things are very much intertwined in CAD and PLM world. One of a very special characteristics of CAD, PLM and related manufacturing software is longevity and life cycle. To jump to another system can be costly experience and to compete with status quo can take time and turn out to be very expensive. In one of my earlier articles I brought few examples of Why engineering technology has 10 years adoption cycle.

But you can get it faster if you can integrate technology into existing eco-system of product or to provide strong incentives to adopt your product. To think about fitting existing systems is a key get it done right.

What is my conclusion? When  you plan to disrupt 2 factors are hard to change – timing of the disruption and a broader system. Both these factors, product, technologies and players are impacting on everything you do. CAD and PLM products have extremely long lifecycle and very specific audience. History demonstrated some great examples of success and also failures. Thinking about eco-system of products and economical factors are key elements to make it successful. Just my thoughts…

Best, Oleg

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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