Differentiation is a big deal in business and every company wants to stand outside compared to their business counterparts by providing a set of unique features and strategies. When it comes to PLM engineering and software, the differentiators are hard. Manufacturing companies are looking to solve a set of typical problems related to data management and business process problems, so PLM vendors are expected to come with the solution. Over the years, portfolios of large PLM vendors became large and diversified. So, differentiating between features and functions is really hard. As a result, big vendors are competing over the vision, strategy, and many other intangible characteristics.
My attention was caught by the Mendix announcement earlier this month. Enterprise Insight article with a very bold title says – SaaS apps a ‘thing of the past’ – Mendix looks to drive low-code industrial change. Here is the passage I captured.
Siemens-owned Mendix has announced “massive enhancements” to its low-code software development platform to enable IoT ‘makers’ to assemble and monetise new digital products. It has declared prescriptive software-as-a-service applications a “thing of the past” as drag-and-drop, non-specialist, low-code software development starts to drive industrial change on a wider scale
The Boston-based outfit, acquired by Siemens in 2017 as part of a major spending spree on industrial software enablement companies, said the shortage of traditional software developers remains “acute”, and exaggerated further by spiralling demand for digitalization and automation in the Covid-19 era. It cited the need to democratise software programming, with low-code functionality, within certain key sectors, notably the manufacturing, financial services, public sector, retail, and healthcare markets.
It is no wonder Mendix is trying to differentiate from SaaS applications. The SaaS strategy is another way PLM vendors are trying to democratize the software, which was originally available and popular only to large enterprise companies spending six zeros on licenses and the same amount of money on customizations and implementation of PLM suites.
PTC CEO and Chairman Jim Happlemann speaking at LiveWorx2020 were saying how SaaS will play a key role in democratizing the PLM and helping manufacturing companies. Check out the following passage:
PTC democratizes manufacturing & process application development, unleashing subject matter expert creativity, said Heppelmann in a thoughtful and inspiring LiveWorx 2020 opening keynote presentation. Cloud and SaaS tools have already transformed CRM, ERP, and most other enterprise software, but transformation of manufacturing systems has been lagging. Now there is a large opportunity to improve productivity with the application of SaaS. The SaaS approach empowers impromptu partners to join forces to blend their ideas as they work together to design and manufacture new products. Hepplmann noted, “This is a powerful capability to have, given the level of disruption of typical supply chains, first, from trade wars and now from the coronavirus pandemic.” The SaaS approach ensures all partners are working with the same models and information, eliminating the need for constant exchange of files. This results in the coveted “one version of the truth.”
Are SaaS and Low Code mutually exclusive?
What is the difference between SaaS and Low Code? In fact, it is not obvious that these things can be clashing. While broad SaaS means just selling a subscription instead of licenses, the pragmatic difference is obvious if you think about the application lifecycle. In most of the parts, SaaS means an application that you can subscribe to and use. At the same time, low code requires a company to actually develop the application before it can be used. Can it be both? Of course. I can easily see applications that allow customization using flexible elements of user interface and code. However, the last one is really hard and most of the PLM vendors are not there yet.
Is there a conflict between SaaS and low code strategy?
A slightly different question to ask because now it says not about the technologies, but about how both companies (or technologies) are approaching the market. While SaaS emphasizes the simplicity of the subscription and ease of start using it, the low-code is focusing on customization as a fundamental requirement even to think about any implementation. While SaaS usually brings a prepackaged experience, low code starts from architecture, requirements, and service work. I can still see both of them working together on a fundamental level, but go to market for SaaS and low-code can be very much different.
PLM Market, SaaS, and Low Code
The market for PLM system technologies and implementation is very diverse and demands different technologies and tools. I can see the market for SaaS is dominated by small and medium-sized companies, while the market of low code features is coming from large enterprise organizations looking to use large service companies delivering tailored solutions. At the same time, thinking that there is no overlap between them would be a mistake. For the history of enterprise software, each time that companies bought something innovative and simple, it was winning and demanded by larger organizations.
What is my conclusion?
SaaS apps and low code have different roots. Naturally, SaaS apps came from the world of out-of-the-box solutions, while low-code ideas originated deep in the space of custom software development. The interesting part is that both are aggressively moving into each other’s position. The flexibility of SaaS platforms is growing fast and new vendors are developing completely flexible SaaS applications that can be customized and tailored. At the same time, large service-oriented companies, despite being very much interested in building custom applications, now are looking for ways to bring simplicity back. 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.