PLM Cloud Washing and True SaaS Differentiation

SaaS industry is booming. SaaS solutions are increasing in popularity among companies. If you didn’t check SaaS business growth recently, here are few numbers that you should keep in mind:

The global SaaS industry is expected to be worth $60.36 billion by 2023, an increase of 9% in the next four years. 93% of CIOs in the SaaS industry reported that they’re planning to adopt cloud SaaS. Over a third, 37%, of SaaS companies said that flexibility is a notable component in adopting cloud-based systems.

Even so, the PLM industry is still very much looking for its aha-SaaS moment. It is not very surprising to see skeptical comments and notes from IT PLM managers and people working on PLM solutions in industrial companies. Here is one of the most typical comments.

…not sure what makes a SaaS solution so different from the current on-premises solutions. Or is it to kind of direct to fewer customer solutions?

What is the reason for such a skeptical position? PLM cloud washing can be a reason for that. If you never heard about cloud washing, check this out. Cloudwashing is the purposeful and deceptive attempt by vendors to position existing products or services as associated with the buzzword “cloud”.  Devil is in details, but vendors are taking a very general notion of cloud computing, which is applying to every vendor service that involves delivering over the internet. Therefore any PLM system that can be accessed via internet infrastructure is now called cloud-enabled. Vendors are not focusing on details and value that can be delivered exclusively by multi-tenant SaaS PLM systems.

So, what makes a SaaS solution different from anything else, and why you should care about it as a customer?

1- Scalable platform and data management

Multi-tenant cloud platforms provide a way to scale from very small to very large companies, It is proven by a large number of existing web and SaaS solutions. This is different from taking existing PLM platforms and hosting them behind a cloud facade. A true multi-tenant platform can optimize data management, support modern DevOps practices, and provide global access to information. Multi-tenant SaaS systems are capable of connecting companies and teams, sharing data in the way it is technically impossible when tenants are siloed.

2- Unique user experience

Multi-tenant solutions built from the ground up using cloud services can provide a new level of user experience. It is enabled by modern monitoring tools, capturing user activity, and providing personalized user experience using analytics and other platform tools. Continues delivery of services with ongoing development and new features introduction will improve the turnaround between customer requirements and new product releases.

3- Intelligent platforms

SaaS multi-tenant systems are capable of capturing intelligence from the data and user behavior, which will allow us to deliver user-facing functions, administration, and monitoring tools that would never be possible to do with siloed systems. It can be applied in the case of system deployment on a global scale as well when a multi-tenant system is rolled out for a large OEM with all their suppliers.

What is my conclusion?

Cloudwashing is a dangerous trend. It hides the details and uses commonly used buzzwords to describe solutions that are different technologically and functionally. Existing PLM platforms are mature and they serve their purpose for customers that spent millions of dollars deploying and implementing these solutions. At the same time. multi-tenant cloud SaaS platforms are capable of doing much more by providing new level functions, administration, and new business models to scale from very small teams to largest OEM industrial companies. Just my thoughts…

Best, Oleg

Disclaimer: I’m co-founder and CEO of OpenBOM developing a digital network platform that manages product data and connects manufacturers and their supply chain networks.