The understanding market potential can make all the difference for the company between sitting courtside in the middle of the most active and watching the game from home. If you working on market and strategy, you have to get a pulse of the market. Then make an assessment of impact, competitors and future growth potential.
I found an interesting slide (source Altium) demonstrate revenue growth and EBITDA for CAD/PLM vendors over the last 12 months period.
I will come back to the slide. However, according to CIMdata reports, PLM market seems to be hot and moving. CIMdata is one of the leading companies that can give you an idea about the current state of the market. Check CIMdata website. A few months ago, I sat down with Stan Przybylinski and had a chance to discuss current market trends in PLM. Check my notes here – CIMdata 2018 PLM Market Numbers – Growth with Forecast for M&A
Here are some numbers:
Coming back to Altium analysis. The article was published by Christopher Donato, Vice President of Global Sales at Altium. The article speaks about the incredible success of Altium and its growth but also presents other vendors performance.
What caught my special attention is the slide that demonstrates current growth potential in CAD / PLM business.
Although the article focuses on the EDA market, the performance of PLM vendors such as Dassault Systemes, PTC, and Siemens PLM is there as well. The chart made me think about where is potential growth for PLM business these days.
Listening to analysts and vendors, you can hear multiple perspectives. According to the CIMdata, the potential in applications of artificial intelligence (AI) in PLM:
Artificial intelligence (AI) has been the “next big thing” for decades. The benefits of Moore’s Law and advances in AI and machine learning have increasingly made that promise a reality. For 2019, CIMdata’s global Product Lifecycle Management (PLM) Market & Industry Forum series will focus on applications of these technologies in PLM and adjacent enterprise software markets that are augmenting human skills, bringing data and advanced analytics to the point of work to make humans, and the processes they deploy, more effective
On the other side, an example of Altium demonstrates the potential of being an underdog on the market occupied by the two largest vendors. My hunch – Altium growth was achieved in the market that was not addressed by larger vendors.
Near-zero growth in revenues from PTC and Siemens, made me think there is the biggest potential in some segments of the market not covered by these vendors (and even Dassault Systems). Small manufacturing businesses is the biggest challenge in the PLM market and vendors are struggling to bring something meaningful for quite a long time. Aras PLM, the company that was recently added to the list of PLM mindshare leaders is also not focusing on smaller businesses and leaving space of small companies completely to Aras partners.
What is my conclusion? PLM market is in a very interesting moment. Although dominated by large vendors it has a lot of potential in the lower underdog position market. To find underserved market segments can be an interesting opportunity. 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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