Why PTC Is On The Right Track Building A Future Multi-Tenant PLM Platform?

PTC acquired Onshape last week. Check this link for the PTC press release and more information. I’ve been following media, talked to many people and got tons of questions since last week online and offline. Some people were caught by surprise and some media and publications started debates about how much PTC paid for a single Onshape customer. I think, they missed the point of Onshape acquisition, the value of Onshape technology and what PTC is planning to do. Jim Brown of Tech-Clarity wrote an excellent article explaining why Onshape+PTC is more than cloud CAD. In this article, I will share my thoughts and perspective on what happened and where I think PTC can be going in the future.

Cloud technology is one of the most powerful transformations in IT and software for the last two decades. It reshaped many industries. The technologies created for the last two decades of innovation in open source, data management, web, collaboration combined with the development of new business models are amazing. But, as always, each industry has its own rules and timing. The last one is absolutely critical. You can come with amazing ideas and technology at the wrong time and you won’t make it. There are tons of examples. Also in the PLM industry. Companies were pioneering SaaS applications for PLM, but came too early and used the wrong tech.

PLM companies were experimenting with different ways to host and provide PLM systems using hosting services and subscriptions. PTC was doing it with IBM a long time ago. At the beginning of the 2010s, Autodesk came with their cloud strategy and development. It was a bold move made by Autodesk saying that now public cloud technology can provide a way to make a different PLM system.

From 2012, almost all CAD and PLM companies announced some sort of “cloud” readiness or availability of products using cloud platforms. For most of the vendors, it was about hosting and certifying existing products using IaaS platforms (Azure or AWS). Cloud became a marketing buzz.

Back in 2015, I published the article in which I compared what CAD/PLM vendors are doing in the cloud, which can help to manufacture companies to navigate in the ocean of buzzwords provided by different vendors. Check the article – The buyers guide for PLM cloud 2015. The information about vendors is not up to date, of course. But, pay attention to characteristics – they are important to understand what is happening with cloud PLM development and especially with current PTC-Onshape move.

While you can read some journalists’ opinions that PLM is a web application and it was on the cloud a long time ago, it is a fundamental mistake. The cloud is not about the browser first. The cloud is about the data. And when you take a PLM system running on the MS SQL database and host it in the cloud for 2 organizations, you will get 2 underutilized cloud servers and siloed data. But both will give you applications in the browser (even using HTML5 technologies). What is my point? The key element you should pay attention to is multi-tenancy.

Check my earlier article – Cloud PLM: From Servers to Multi-tenant Applications. It gives you some broader perspective on what happened in the industry and how it will reflect the PLM development. Here is a diagram with 3 phases of PLM development – company servers, cloud servers, multi-tenant applications.

Multi-tenancy is a tricky thing. To understand it, you can read my articles. One of them is old from 2012 – What do you need to know about multi-tenancy. And here is a newer one – How to ask right questions about single tenant vs multi-tenant PLM cloud. I spent a lot of time developing cloud applications in my startups, Autodesk and recently at OpenBOM and I can tell you that multi-tenancy is a big deal that can impact everything from functions to business models.

Learning more about multi-tenancy and application architecture of PLM vendors, you start to understand that statements like -we can run on any cloud and we can be single-tenant and multi-tenant at the same time needs to be taken very carefully with a big amount of marketing neutralizing medication. In this article, I explain why I think single-tenant PLM architecture is a dead-end in modern cloud system development and why digital transformation and connected PLM can only happen using multi-tenant architecture. Check another article – Who will benefit from multi-tenant PLM backbone.

So, getting back to PTC and Onshape. If you missed my article Onshape+PTC = what happened? please check this out. Jim Hepplemann provided a bold and clear statement about the results of PTC research before acquiring Onshape – no company in history was able to port the existing system with traditional server-based and web architecture to the cloud. All leaders in the SaaS industry built these systems from scratch and not ported existing systems. The architecture principles are different. The systems were developed for a “company”. And to run 100 systems for 100 companies in the cloud is a big problem. You need to run one system, which has a multi-tenant architecture to share multiple companies. Old architecture cannot scale and also will lead to low margins.

Now let me connect dots. By acquiring Onshape, PTC made a first step in the process of building a multi-tenant PLM platform that can become a foundation of the future PTC cloud platform. Onshape started from scratch in design, bring great ideas and 7 years of experience in developing and operating cloud platforms in real-time. The operation aspect is not less important. When you run a cloud system, DevOps and Support are elements of the platform. And modern cloud systems are not only about technologies. You cannot send them to a customer using CDs or push to Azure or AWS when you need to sell it. These are live systems that go through long process adoption, maturity, and development. You can’t produce a baby in one month by getting nine women pregnant. So, the same is true for cloud software.

What is my conclusion? PTC acquired Onshape and by doing so provided an indication that the PLM industry is moving from “cloud servers” to multi-tenant” PLM applications. Onshape is a foundation of cloud PLM, but it brings technology, experience, and the team to work on a new problem. It is a bold move and a lot of challenges ahead. It will be interesting to see the reaction of other CAD and PLM vendors. I will come to this topic in one of my next articles. Meantime, there are a lot of things PLM architects, analysts, and journalists can learn. For example, what is polyglot persistence and why it is important? It is an interesting time in the PLM industry. 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.

Image by 【中文ID】愚木混株 【Instagram】cdd20 from Pixabay