What will be the next open-source model for PLM software in the 2020s?

The discussions around open source were around for more than a decade. You can check out my articles about PLM and open source. Aras was a major influencer in open-source discussions. It was heavily related to Aras own invented strategy of enterprise open source development, which can be classified differently depending on what position you take about what is open source. In one of my most recent articles – Open Source In PLM and Manufacturing I explored multiple directions of open source contribution – starting from close core approach taken by Aras, to SaaS PLM software using multiple open source components and ambitious directions of vendors like Microsoft to create open platforms by using multiple open source tools, on top of Microsoft Azure Platform.

In my recent analysis about open source in PLM, I wrote about SaaS PLM and Open Source Mistakes was triggered by Yoann Maingon’s article Is Open Source PLM doomed? I liked the video Yoann shared in his blog – it is certainly worth spending the time watching it and learning how open source has grown mainstream for the last decades.

Yoann’s conclusion was that there is no incentive to go open source for PLM vendors. His conclusion was based on two reasons – (1) not enough developers of PLM systems and (2) companies not buying into open source PLM ideas. My conclusion was that by 2019 open-source PLM reached its lowest point. There were multiple reasons for that. However, just to name a few I can mention a very low interest from major PLM players, Aras withdrew from their open source strategy and shifted focus on selling subscriptions around closed Aras PLM core. Also, SaaS PLM has taken a substantial focus for most PLM vendors with new SaaS PLM entrants and growing M&A activities of major vendors.

Open Source Has Grown Mainstream

Think how big is open source. I hope you found the time to watch the video above. The article How Open Source software took over the world can give you some data points about the size of open source business

…we’ve witnessed the growing excitement in the space: Red Hat is being acquired by IBM for $32 billion (3x times its market cap from 2014); MuleSoft was acquired after going public for $6.5 billion; MongoDB is now worth north of $4 billion; Elastic’s IPO now values the company at $6 billion; and, through the merger of Cloudera and Hortonworks, a new company with a market cap north of $4 billion will emerge. In addition, there’s a growing cohort of impressive OSS companies working their way through the growth stages of their evolution: Confluent, HashiCorp, DataBricks, Kong, Cockroach Labs and many others...

PLM Open Source Trajectory

Open Source PLM trajectory at this point doesn’t look exciting and doesn’t match the growth path of other industry verticals. Between Aras almost eliminating their open-source marketing and shifting to market new Aras darling – enterprise SaaS model, and few open source PLM projects, you cannot find any substantially growing open source PLM activity at this point.

Marketing wise, you can see the words “open source PLM” in a variety of publications, but in most of them, it is just a marketing slogan that applies to the software which is not even close to the ideas and concepts of open source like for example this article – Best Open Source PLM Software.

What makes the PLM market special?

I agree with Yoann Maingon’s assessment. Open source PLM didn’t find much support and traction for the last decade. Aras was the only company hyping open source PLM initiatives, their free downloads and community projects were the best PLM industry was able to deliver in the 2010s.

I’ve seen a lot of demand for the free PLM platform, which Aras delivered brilliantly. Companies built solutions around Aras core by licensing their platform. However, Aras didn’t grow into a big community project with a large number of contributors. I don’t know what was the reason it failed, but just to name a few, I can bring a heavy reliance on Microsoft .NET technology, Microsoft SQL database, and Aras unwillingness to open their core code. It is hard to say why Aras didn’t do it, but I can sense some of the companies losing interest in Aras because of the latest.

Timing Is Everything. Why Open Source PLM Now?

Timing is a tough thing to take when it comes to new things and innovation. Most of innovators are ahead of their time. A combination of great ideas and bad timing still brings no results. It is a hard thing to discover and I tend to think that as much as open-source projects were growing in the industries, industrial companies were not ready to think about open source PLM as a foundation of their PLM initiatives. Most of these companies were still locked into the idea that “nobody could ever be fired because of signing a contract with IBM”. These things might not change fast, but there are new trends now in the industry that can shake the current status quo.

Large manufacturing companies are interested in PLM technologies

The software literally is taking over the world of manufacturing and industrial companies are under huge pressure to get into a software business. Modern products are heavily dependent on software, product complexity is growing, global supply chain challenges put a lot of pressure on the largest manufacturing and product development cycles are shortening.

All the above bring manufacturing companies to reconsider their approach in software development in general and in PLM specifically. During the recent CIMdata PLM forum, Stan Przybylinski, VP of CIMdata speaking about the 2021 Market Review mentioned an increasing trend of manufacturing software making investments in PLM. Check this out here. Companies like Siemens, Rockwell Automation, Schneider Electric, and many others are investing in PLM software based on the realization that PLM has a major impact on how these companies can do business.

Will Large Manufacturing ITs Invest in Open Source PLM?

Remember the story of open-source software. The largest software companies and businesses that have nothing to do with software became major contributors to the development of open-source software. Check this article that will give you an idea of how much contribution was done by large companies – Top companies contributing to Open Source 2011-2020.

Which triggers the question about industrial companies’ contribution to possible open-source PLM projects. The question is not simple to answer as it is not simple to define PLM. For many manufacturing companies, PLM is a business strategy that has multiple elements – processes, tools, and best practices. Most of them today live under the assumption that technologies are not a problem or maybe the least problem for them. At the same time, I can hear the voices of IT organizations that are continuously looking for advanced PLM technologies to match their modern IT tech stack. Remember, most of the major PLM vendors built (or acquired) their tech stacks 15-20 years ago, it comes as no surprise most large manufacturing companies are slowly growing their unhappiness with the old PLM stack. Will it turn into an investment in open source PLM projects? This is a great question to ask.

What is My Conclusion?

Manufacturing companies are very interested in PLM technologies. Businesses need to have modern PLM technologies helping them to develop complex products including data management, global collaboration, supply chain, connected products, analytics, and intelligence. Will it turn into a willingness of industrial IT to invest in the open-source PLM initiative? There are many reasons for them to do so as it can help to develop a shared software foundation for the industry, push standard development, support collaboration between OEMs and suppliers that is often hard to do because of closed stacks of PLM software vendors and their competition. One of the keys to success is to provide an option for an open-source PLM stack relying on modern software architecture, data management, and IT infrastructure. I realize there are many questions, but as I said above, the timing can be everything. So, maybe open source PLM will be different in the 2020s compared to what it was in the last decade. 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.