Earlier this month in Chicago, I attended PI PLMx conference. One of my favorite sessions vendors’ panel about standards. Check my article here – [VIDEO] what PLM vendors are thinking about standards. Standards are important – no doubt. But to understand business aspects of standard development is even more important. Because then we can stop dreaming and start acting.
The key comment in my view during the panel was made by Marc Lind, SVP Strategy of Aras Corp. Check video below.
Here is my quick summary of what Marc said – standards and openness are important and we (Aras) are supporting it… yada..yada yada. But don’t forget about fundamental principles of CAD/ PLM business models that leveraging locking of customers to a specific group of products belonging to a vendor.
It made me think that there are very little incentives for vendors to support standards and be open unless… vendor is 1/ forced by customers to support standards; 2/ vendors is growing and he would like to be able to acquire data from other vendors (supposed shrinking at the same time).
Intractable revenues
CAD / PLM vendors are operating in well established market with a very specific status quo. They are making lot of revenues from existing customers. So, to protect their business is natural and to make their product open to allow to competitors to scrap data easy doesn’t look like wise decision.
Business value of CAD knowledge
Engineers are ridiculously believing in CAD tools they are using. The value of engineering experience and knowledge of a specific CAD system is a business model by itself.
PLM IT commitment
Usually PLM tools have their champions inside company. There are people that supported specific PLM tool, advocated for this decision and invested time and money developing solution. So, these people made often lifetime commitment for a specific vendor and tools. There is questionable benefit for PLM IT to start paying less for PLM tools to decrease their own budgets and importance in the organization. Don’t get wrong – PLM IT would love to get a sizable discount, but not to figure out how to make 50% cut of PLM budgets forever.
End users and business customers are the hope
The best bet for change can come from two group of people. First is end users. Those are people that living and breathing CAD and PLM tools. If something doesn’t work and create a great inefficiency – they are first to jump. Second group are IT and business people. Those people can see a long term value, business benefits of new models and tools.
What is my conclusion? Transformation is hard for large companies with established CAD and PLM portfolios, large investments and significant customization done over multiple years. These customers cannot quit. The same can be said about established CAD / PLM – not much incentives to change. So, with no changes, vendors can give empty promise to be committed for standards and openness and keep business as usual. Unless change will come from customers demanding change and business transformation. Changes will come from outside of current vendors comfort zones. 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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