3 Reasons Why Multi-tenant SaaS PLM Can Be As Disruptive As Solidworks Back in 1995

3 Reasons Why Multi-tenant SaaS PLM Can Be As Disruptive As Solidworks Back in 1995

The discussions around cloud SaaS PLM are heating up. Like a decade ago, when the engineering software industry just started to explore cloud software concepts, we had many skeptical voices about the feasibility of cloud software usage in the cloud, the performance of browsers. We’ve heard tons of concerns about IP and the maturity of security models. Fast forward to 2020, software companies like Autodesk and Onshape are running some of their newest software in the browser, and manufacturing and construction companies developed IT procedures to manage SaaS software in the companies. At openbom.com (disclosure- I’m CEO and co-founder), we are normally getting IT security questionnaires and in many companies, I can see how IT is running all SaaS accounts used by a company.

Earlier this week, I published my article – 5 Dimensions to compare single-tenant vs multi-tenant PLM models.

My favorite comment was about the comparison of multi-tenant SaaS with some historical examples of disruptive technologies like feature based modeling and Windows/PC based systems in the 3D CAD business.

Beppe Grimaldi • 16 hours ago. Hi Oleg. Interesting article. I just think your incipit: “because it can create a major differentiator for systems that the PLM industry didn’t see since inventing parametric feature modelers and bringing PCs and Windows machines into the professional business.” a little exaggerated. I’ve seen them coming in of Pro/Engineer and Windows NT, so I believe Multi-tenant can be an opportunity, but defining it as disruptive as the 2 facts seems a big bet. 🙂

Analysts and journalists have their concerns too. Here is an interesting passage coming from upFront-eZine of Ralph Grabowski – PTC’s 2x more-expensive cloudCAD is (up to) ten years away.  Here is the passage:

I admire Apple and PTC for making daring moves. In the case of Apple, it’s switching its desktop CPUs from desktop-optimized Intel chips to smartphone-optimized ones defined by ARM.  For PTC, it is moving its CAD software 100% to the cloud. In both cases, I think they will stumble, yet I look forward to watching the progress.

During last month’s conference call with financial analysts, PTC ceo Jim Heppelmann explained the company’s roadmap when it comes to cloudCAD software.

Jim Heppelmann: Let me kind of just paint the highest level picture. We think the industry is going to SaaS [software as a service]. And with Onshape we’re leading the charge. But we’d like to bring our customer base that’s on Creo [CAD] and Windchill [PLM] along for the ride. So we’re saying, ‘What if we developed using the Atlas kernel, if you will, or architecture of Onshape–. What if we developed versions of Creo and Windchill that kind of acted a lot like Onshape in terms of being true multi-tenant, multi-user SaaS?’ We’re not talking about building a new product with limited functionality. We’re really talking about full-on versions of Creo and Windchill so that you could lift [them out from] the production deployment, shift it into the SaaS cloud, and never miss a beat.

While I’m not in full agreement with all comments from Ralph Grabowski, there is one point I agree with him – multi-tenant SaaS systems will be leading towards a fundamental shift in business models, combined with another big shift in operations.

Coming back to my comparison with the revolution started by Solidworks back in 1995, was founded by two big changes: (1) a combined drop in the cost of hardware and software and (2) democratization of 3D CAD applications. Both created a change that was leading many companies (including PTC that was standing behind the previous revolution of Pro/E) to change their trajectories.

Let’s come back to the multi-tenant SaaS PLM systems. Almost a decade ago, Autodesk was the first large CAD vendor to change their strategy and moving to the cloud as a strategic platform. You can see today, Autodesk Forge platform and many other Autodesk applications are growing in their maturity and functions. These systems are in on-going development and increasing their maturity by providing more services. The same can be said about Onshape and now PTC Atlas. When Jon Hirshctick and his team started Onshape back in 2012, there were many questions about the feasibility to build professional 3D CAD in the browser running on the AWS platform. It took eight years to make it happen and bring it to the maturity to become the PTC Atlas platform.

In my own experience of building openbom.com for the last four years, I’ve learned a lot about how multi-tenant SaaS business systems can provide a unique value engineering, construction, and manufacturing connecting teams, companies, contractors, and suppliers.

So, what are the big differentiators of multi-tenant SaaS PLM that will make it so disruptive during the next 5-10 years?  In my view it comes down to three fundamental points:

1- Business Model

The opportunity to rethink a business model for PLM is here. Multi-tenant systems set the cost of a single user to zero, which opens an opportunity for PLM systems to scale from a single user to a large company. Something that never happened to PLM systems in the past that needed to be installed and configured to be used by a large company. The value of PLM will grow significantly as a result of widespread adoption. Also, it will create a foundation for data, networks, and intelligence.

2- Unique Functions and User Experience

Sharing data is a big deal. When you have data locked in a single-tenant, even hosted on AWS or another platform, the value of this data is diminished. There is a huge value in sharing data. Check my blog – multi-tenant SaaS PLM will unlock the value of data sharing in manufacturing. And multi-tenant data management is a foundation for functions such as data sharing and unique collaboration between teams, companies, contractors.

3- Data, Networks and Intelligence

Data is a new oil and a multi-tenant system is a foundation of the network business platforms. The unique value of network-based platforms is to create a new level of intelligence that can be created when a system has access to the information, can anonymize it, and turn it into the foundation of decision support and analytics. Starting from the prediction of product release schedule based on metrics collected from thousands of companies and ending up with the recommendation of contractors, suppliers, and materials.

What is my conclusion?

In a famous Peter Thiel’s quote about competition, he said that you don’t want to be the first mover. You want to be the last mover to carve a 20 years runway and create a differentiator that is hard to beat. It happened to some companies in engineering software and Solidworks is a good example. The momentum behind introducing Windows to 3D CAD combined with features of Pro/E was impossible to beat, which turned out to be a $1B brand for Dassault Systemes in 25 years.

Manufacturing and industrial companies are coming late in the game of discovering SaaS and multi-tenant platforms. However, most mature PLM businesses are sitting on top of PLM systems with 20 years of history and existing architecture. Which creates an ultimate timing opportunity. Multi-tenant SaaS PLM can rely on the maturity of the infrastructure developed by global web and SaaS companies multiplied by the gold mine of manufacturing data that can be turned into the intelligence of the future digital engineering and manufacturing software. Just my thoughts…

Best, Oleg

Disclaimer: I’m co-founder and CEO of OpenBOM developing a digital network-based platform that manages product data and connects manufacturers and their supply chain networksMy opinion can be unintentionally biased.


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