Agreement is a hard when it comes to PLM. Ask 3 people about what is PLM and you most probably will end up with 4 or sometimes even 5 definitions. However, there is something that most of people in PLM community is agreed about – midsize business are afraid of PLM. It is hard to sell PLM to SMB companies. Mid-size businesses have hard time to adopt complex PLM idea and pay high price of PLM licenses and implementations.
Engineering.com article with catchy phrase “Ketchup bottle effect” written by Verdi Ogewell caught my attention earlier today with very surprising and interesting news – Autodesk is finally figured magic formula of PLM for SMB and according to CIMdata are in the list of 10 top PLM revenue vendors. Read the article Autodesk and PLM: Waiting for the “Ketchup Bottle Effect” and draw your conclusion.
Few interesting passages that caught my attention:
Autodesk Sits In cPDm’s Top Ten League. Clearly, Fusion Lifecycle is gaining devotees. Yet during Accelerate, the company’s recent PLM event in Toronto, Canada, I came away with the impression that Autodesk customers are generally cautious—even a bit skeptical—of PLM. They are adopting PLM in a stepwise fashion, identifying one problem at a time, finding a solution and then proceeding to the next problem.
Generally, this approach is typical of PLM implementations among SMEs and is easy to understand. While PLM is a good concept overall, it also requires changes that are difficult to implement all at once. There’s always a risk that a quick and complete conversion will end up breaking processes that work. But there are positive signs that a “ketchup bottle effect” lurks around the corner.
Solving one problem at a time makes the implementation of PLM a potentially slow affair, and the momentum in sales of solutions is affected, becoming a similar protracted story.
It is no coincidence that in 2017, Autodesk “just” squeaked into the top ten in terms of direct cPDm/PLM revenue, according to CIMdata. The company earned $64 million in direct PLM software revenues. The list was topped by SAP PLM ($838 million), with Dassault Systèmes in second ($546 million) and Siemens PLM in third ($506 million).
Autodesk Fusion Lifecycle subscription is average 100$ / user / month. So, assuming the number above is correct Autodesk has about 4000-5000 companies using Fusion Lifecyle. This is big number in PLM business.
Another interesting passage from Engineering.com article is a comparison between Aras Corp. and Autodesk Fusion Lifecycle PLM. Aras Corp, new PLM darling recently announced major investment of $40M by Silver Lake and GE is reporting strong trend of business growth with large companies adopting Aras enterprise open source product – Aras Innovator. Aras Innovator was founded back in 2000 to target medium size companies and changed its trajectory in 2007 after Aras moved to new business model – Enterprise Open Source. According to Verdi Ogewell, Aras revenue is about the same as Autodesk PLM.
….Autodesk is advancing fairly quickly in the context of PLM development. Take recent years’ PLM mindshare runner up, Aras, as an example of the time it takes to create PLM revenues. Despite a considerable number of years on the track—they swapped to their present business model 2007—they ended up on the 2017 list with only a few million more in revenue than Autodesk’s Fusion Lifecycle.
According to the same analytic company CIMdata Stan Przyblinski. cloud PLM businesses experienced slow adoption. CIMdata made cloud PLM study last year to make analysis of slow adoption of cloud PLM – Why not enough PLM users on the cloud?
According to Mr. Stan Przybylinski, CIMdata’s Vice President of Research, “Cloud-based solutions are a fact of life in many other enterprise software domains, but adoption in the PLM market has been spotty. Helping to better understand why is one of the main goals for this research. This will also be the first step in documenting how industrial companies are moving their core product and process development work to cloud-based solutions.”
You can find more information about CIMdata research here CIMdata Announces Collaborative Research on Cloud PLM.
What is my conclusion? I found Verdi Ogewell’s Engineering.com story interesting and inspiring, but somewhat contradictory. I tend to believe Autodesk cPDM / PLM $65M revenue doesn’t not belong entirely to cloud PLM and includes other Autodesk cPDM products. Fusion Lifecycle PLM is competing in the market that majority is Excel and spreadsheets and cloud PLM products such as Arena PLM and few other vendors. This market is large, but until now nobody discovered how to sell PLM in this market… yet. Just my thoughts…
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