SaaS PLM Debates 2020

SaaS PLM Debates 2020

Just a few days left before the year 2020 will be here. The past decade was the time for PLM software vendors to learn and experiment with cloud systems. I read my blogs from the 2010s. Many of those articles are reflecting the debates we had about cloud computing and cloud PLM. Back a decade ago, the engineering software industry was discovering the opportunity and value of cloud computing. CAD and PLM vendors learned from the vendors in other industries – the cloud adoption was much faster in CRM and other industries.

PLM cloud differentiation and anti-cloud rant brings some memories back and especially Peter Bilello’s The Cloud: Worrying about the wrong things?

Peter is talking about different elements of cloud strategies and PLM. My favorite passage is about security, which is considered one of the biggest concerns of cloud software. Here is the quote:

IT chiefs in both the private and public sectors and some Internet industry analysts may be overly concerned about security. Worrisome Internet security breaches, though rare, are widely reported. By law, banks, credit card companies, and other online repositories of financial and personal data must report breaches. Two big outages were front-page news in April 2011: Amazon Web Service’s Elastic Computer Cloud (EC2) was down for a couple of days. Sony’s PlayStation Network was out for five weeks….  Amazon put its EC2 data loss at 0.07—seven-hundredths—of one percent. Some perspective: information online expands exponentially while the number of digital break-ins grows far more slowly. Adding in less nefarious security lapses, system errors, and the human error still does not boost these problems out of the rare category.

Back in 2012, Gartner presented the view of cloud services (IaaS, PaaS, SaaS). Most of cloud PLM is only using cloud IaaS today.

Few more articles from the past Cloud PLM and IaaS options; PLM cloud concerns and Dropbox Reality for Engineers.

Another interesting article is from Aras ACE 2011 conference describing Aras experiments with cloud and Azure services.

What happened in the past decade in engineering software, PDM, PLM? All companies were learning about the cloud, implementations, technologies, advantages of options and business models. New vendors created technologies that are different and can be utilizing the cloud in a better way by providing benefits to customers. And it will bring competition and debates up.

Aras’ Marc Lind shared his /Aras perspective on cloud and SaaS in the comment to my recent article about SaaS PLM.

[Oleg Shilovitsky] “real business advantages of SaaS solution is only possible with multi-tenant architecture” Begs the question ‘benefit for who’?

Multi-tenant has significant benefits for the Vendor: * Unilateral control over customers, * One data set to manage (even if single hack exposes all customers’ data), and * lower vendor costs…

Trade-off for Customer is: * little or No Control over the environment, * severely limited Customization to fit ever changing business conditions, * upgrades Forced on Customers without request or authorization – even in compliance scenarios – and * data mixed in with Competitors *

Often data access limited as well None of the global enterprises I’ve spoken with are interested in these sacrifices. Maybe in future “someone” will figure out best of both worlds. Until then, leading cos still demand control, power and flexibility. Stay tuned 🙂 Just my take. MarcL

The comment, in my view, explains Aras focus on global enterprises as well as probably a hint that multi-tenant SaaS is not a priority for Aras. For the last few years, Aras made significant progress challenging big names in the PLM industry (Dassault, Siemens, and PTC). While large enterprises are looking for control and power, I wonder how different PLM architectures can fit overall IT and cloud strategies. It is still too early and the jury is out – I agree with Marc Lind here.

The situation is completely different for small and medium-sized companies. These businesses are moving full speed ahead into cloud services and happy to escape the reality of Excel nightmares and PLM servers. For them, the challenge is to organize the data, communicating inside and outside of the organization and doing it with a reasonable TCO and IT effort.

I want to share some thoughts and ideas about SaaS PLM development and how multi-tenant architecture will contribute to the development of modern PLM systems.

1- New Business Model

Multi-tenant SaaS applications allow leveraging the economy of scale. Hosted PLM systems eventually only can set up a virtualized environment for a single customer. There is nothing wrong with that approach besides the cost of hosting is a big burden for each customer. One of the advantages of cloud technologies is to share resources. Maintenance and updates are also costly and painful. Imagine tens of thousands of tenant environments to be maintained updated and managed. The multi-tenant environment allows a vendor to optimize resources and virtually make the cost of adding a single customer equal to zero. New business models are the answer to the demands of companies (especially small and mid-size companies) to lower the entry point to the PLM world and to increase PLM adoption

2- Digital Twin and Data intelligence

Digital Twin is one of the most trending and inspiring technologies in CAD and PLM industry. While the definition of Digital Twin is not mature enough, it eventually comes down to the ability to processing data, simulating the behavior of a product in real life and creating models that can go beyond a single company and environment. Multi-tenant cloud systems can open the door for future system intelligence build of top of the data.  Adding an ability to analyze and process data will lead to the creation of solutions based on machine learning and AI methods. Many of these methods are used today by consumer and enterprise systems and because of PLM architecture limitations cannot be applied for

3- Unique Data Sharing and Collaboration Features

Multi-tenant technologies open a door to new features that were impossible to have in a single-tenant environment. Data sharing and collaboration between two single-tenant systems require the organization of data-sharing infrastructure. It can be as simple as Excel or as sophisticated as data federated hubs. But multi-tenant systems have this mechanism built ground up.

4- Industry Development

Last, but not least, new capabilities and increased adoption of PLM systems will create an online market for everyone involved in this business – partners, consulting, service and training. An increased system adoption will open the opportunity for companies to share information, control communication, and IP.

What is my conclusion? Multi-tenant SaaS application is the next level of evolution in CAD, PDM, PLM, and related disciplines. It can open a door for new business models, democratize the technology for small and medium-size engineering and manufacturing businesses. It creates new functions that impossible in isolated tenants. It will contribute to data intelligence and digital twin projects and open new opportunities for consulting and services. I suggest to all industry pundits that concerned about multi-tenant architecture to check cloud debates back in 2010. Most of the arguments are the same. What about global enterprises looking for security and control? Large enterprises are actually multiple tenants by themselves. Also… you can always turn the multi-tenant system in a single tenant. But not vice versa. The future PLM systems will be multi-tenant. 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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