The market of SaaS applications is growing substantially. Check my earlier blog – How much PLM companies will grab from $20B annual increase in SaaS spending.
The market looks very bright and some PLM vendors are making big bets on this growth. As such latest Engineering.com articles written by Verdi Ogwell push questions between PTC, Dassault Systemes, and Siemens provoking discussion about growing SaaS PLM and CAD market – PTC Cloud SaaS Dilemma.
Meantime PLM market in 2020 did not confirm the SaaS growth numbers based on Gartner’s assessment.
Gartner Predicts an Explosive Growth for Saas Software. One answer recently came from the analyst Gartner, stating that companies’ global investments in cloud SaaS software will grow by 40 percent over the next two years. In 2021 alone, that means we are talking about 20 percent to a total of almost $122.6 billion, up from $102.8 billion in 2020. For 2022, Gartner calculates that this figure will rise to around $145.4, once again about 20 percent up. Admittedly, at present we are not yet able to see the exact figures and effects of SaaS-based CAD and PLM in the cloud during 2020. However, there is a lot of evidence to suggest that a corresponding development curve may apply to these areas, and the trend appears to be very close to the growth figures Heppelmann talks about.
In general, all PLM vendors were making movements towards repositioning their portfolios, acquiring technologies and products. Engineering.com article made me think about PLM vendors’ position to capture SaaS business in 2021-2022. So, here is my brief take on the strategic positioning of major CAD / PLM vendors when it is related to cloud/SaaS product offering.
SaaS /cloud was a strategy for Autodesk for the last 10 years. Autodesk cloud platform – Forge is strong and mature, as well as other products Fusion360 are cloud-based. However, Autodesk cPDM (PLM) offering is undergoing a substantial transformation. Fusion Lifecycle product was transformed into Fusion360 Manage, which seems to be a narrow offering for Fusion360. After Autodesk’s last acquisition, Upchain is now a cloud PDM and PLM solution alongside Autodesk Vault, which is an on-premise offering. You’d expect Autodesk to integrate Upchain first with Forge before making big moves. Also, the multi-CAD focus of Upchain can face some headwinds in the market going against other CAD products.
3DEXPERIENCE is a flagship cloud platform for Dassault System. It is the outcome of 15 years of DS strategy to develop a single application platform that started from the acquisition of MatrixOne. The platform has a strong user experience and a rich set of xApps. However, the applications developed on top of 3DX are new and many of them are still under transformation. 3DEXPERIENCE Works, which is a flagship product for the SOLIDWORKS community, is integrated with the desktop SOLIDWORKS and requires other xApps to provide a full replacement for on-premise PDM / PLM offering from SOLIDWORKS.
Siemens Industrial Software
Earlier in 2020, Siemens announced the Teamcenter X – a cloud version of their flagship PLM product. The offering is very new. There is not much information about TCx adoption as well as how it interplayed with a variety of CAD systems. All CAD systems (Solid Edge and NX) are desktop-based and only can be used via hosted desktop cloud service. There is no specific cloud / SaaS offering for Solid Edge.
For the last two years, PTC has made substantial investments in acquiring and developing SaaS technologies and applications. The acquisition of Onshape and the recent Arena Solution allowed PTC to get advanced technologies and great SaaS positions compared to other vendors (mostly Dassault Systemes and Siemens). PTC Atlas platform is a flagship product to expand SaaS applications. Arena Solutions acquisition, which was one of the most expensive acquisitions for PTC (and probably for the PLM community in general) supposed to bring cPDM functions to PTC. The weak points of the PTC strategy are a bridge between Arena and Atlas, as well as cloud PDM support for non-cloud CAD products.
What Can OpenBOM SaaS PLM Floodgate?
I believe this is one of these questions, PLM industry desperately wants to answer. The answer can define the trajectory of the 2020s and potentially can change current vendors’ position. For the last 20-30 years the key to the market was in successful CAD business – AutoCAD, Pro-E, CATIA, SOLIDWORKS, and few others dominated the market at certain points and shifted the market from one state to another. Will the market of the 2020s continue to be CAD-driven? If so, it might bring leaders of the new CAD models namely Onshape and Fusion360 future advantages. However, there is another option. The products are becoming heavily multi-disciplinary and dependent on electronics and software. According to some assessments, 20% of modern luxury car BOM will be dependent on chips by 2030. In such an environment, the role of MCAD will be deflated and the role of systems, multi-disciplinary Bill of Materials, software BOMs, and systems focusing on an entire information flow will be growing.
What is my conclusion?
CAD (or even MCAD) was one of the leading drivers in the last 25 years of PLM development. Will future SaaS PLM transition be dependent on the future SaaS CAD? It is very much possible. However, changes in the product development, huge dependencies on electronics and software combined with global and connected manufacturing eco-system can shift the focus from MCAD development and will bring a need to unlock the market using global data management platforms, streamlining product development processes, digital twin and digital threads, opportunities to optimize the global supply chain and delivery. Data management will become a key factor to open the SaaS PLM floodgate and the keys will belong to the companies focusing on how to get the most from the data, Just my thoughts…
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.