SAP & Siemens Teamcenter Partnership – competitive threat or business opportunity?

Unless you lived under a rock for the last year, you should know about the Siemens and SAP partnership. I posted a few articles speaking about what Siemens and SAP planning to do and how it can possibly impact the industry – who will be winning or losing and what questions do I have to both Siemens and SAP teams.

Whatever PLM and ERP systems plan to make together, the main question will be about what BOM model these vendors will choose to collaborate between products. Will SAP and Siemens come on the same BOM? Although SAP and Siemens are friends now, the situation on the ground matters the most – Will they continue the PLM vs ERP Tug of War? However, my main question was about how Siemens and SAP will address BOM collaboration across the product lifecycle?

When two major vendors like SAP and Siemens are coming together many things can happen. The main thing Siemens and SAP are presenting in the video and other materials is a Digital Thread. I’ve been addressing the topic of Digital Thread in multiple articles for the last few years. If you’re new and want to learn, I recommend you not to boil the ocean and check first what Digital Thread you need?

Although, Digital Thread is a popular buzzword these days, the ideas of digital thread were here much earlier than marketing folks called it this way. In a nutshell, a digital thread is a capability to connect pieces of information together. Design, manufacturing, maintenance, multiple tools, multiple lifecycle stages. How to bring the right information and connect tools used by multiple teams and companies. In different ways, these ideas were discussed and debates for the last two decades, but recent development of technologies in both PLM and connected products (eg. IoT and Industry 4.0) accelerated the capabilities of products to connect and integrate the data.

But, let’s get back to SAP and Siemens. The following video came across my desk a few days ago.

First of all, I have to applaud Siemens and SAP for the great marketing. The trailer is super nice and provides a strong visual appearance of easy data flowing between systems, processes, teams, companies. It made me think about the practical implementation of this nice flow. How will the data flow between SAP and Teamcenter databases? Where the data will reside and how the information will be updated and delivered to customers? I look forward to seeing more examples of a specific customer or product implementations. So, if you have one or know where to find it, please share it with me.

The second question I have is about market dynamics. When such two big vendors make a move, it creates a lot of waves. I bet Teamcenter and SAP are addressing a very specific niche of the market. Like one of my business prospective customers told me a few days ago – Teamcenter is a great system, but I’d not consider it unless I have a few thousands people using it in my company. Big systems bring a lot of complexity and constraints, therefore smaller companies are looking for more agile and nimble solutions.

At the same time, Siemens and SAP video is highlighting the trend and educating the market including industrial companies, software vendors, partners, and developers, which is a great deal by itself. Large manufacturing companies are moving very slow. This is an opportunity for other vendors to introduce tools and solutions to solve the same problems for smaller companies and to grow. In my article PLM vs ERP – Change the battleground, I shared my thoughts on how existing companies can change tactics and achieve more during the days when technologies and products are transforming.

The SAP + Siemens alliance is also a big threat to other large PLM and ERP companies. This means SAP and Siemens can eat the lunch of other vendors operating in the same market as SAP and Siemens. The list can easily include all large PLM mindshare vendors and top ERP vendors. They will have to move to figure out the lines of defense and bring new innovative solutions to the market.

What is my conclusion?

SAP and Siemens alliance and partnership is a big competitive threat to large PLM/ERP vendors, but also a huge opportunity to develop and bring new tools and technologies to solve the same problem. The manufacturing market is huge, industrial companies of different sizes are looking at how to innovate and stay competitive, which will trigger the next step in technological development, partnership alliances, and new product development. The time is right here and now to bring new tech and solve old manufacturing problems. 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, construction companies, and their supply chain networks. My opinion can be unintentionally biased.