5 Shades of SaaS PLM: Understanding the Levels of Cloud-Based PLM Solutions

The shift to SaaS PLM is rapidly gaining traction in the manufacturing and engineering sectors. As companies move away from traditional, on-premise systems, the fast appearance of cloud-based solutions becomes undeniable. SaaS PLM promises flexibility, scalability, and reduced overhead. All PLM vendors declare their product data management, product lifecycle management and other systems to support product development process (aka SaaS PLM) to be cloud-based, cloud -native, cloud enabled, etc. Now what?

As the PLM software industry adopts this new paradigm, it’s important to recognize that not all SaaS PLM solutions are created equal. The phrase “not every cloud is the same” is particularly relevant here. Different solutions offer varying degrees of cloud-native architecture and functionality, each with its own implications for implementation and use.

In this article, I will explore the five levels of SaaS PLM, helping you to compare apples to apples when evaluating your options.

1. SaaS PLM Subscription

For some PLM software vendors, SaaS means to shift their licensing model (and pricing). It is not about tech at all. At the most basic level, SaaS Subscription PLM is a straightforward pricing offering. Here, an existing application is sold via a subscription model. While it might carry the SaaS label, this type of PLM often involves legacy software that has simply been repackaged to be rented out rather than purchased outright. The application itself doesn’t take any advantage of cloud computing and just a business model dressed as SaaS.

2. SaaS Hosted Cloud

The next level up brings some advancements in technology. SaaS Hosted Cloud refers to PLM systems that have been migrated to a cloud infrastructure, typically using IaaS (Infrastructure as a Service) platforms like AWS, Azure, or a private data center. This allows the PLM system to benefit from cloud-based storage and computing power. However, the software is still fundamentally the same as its on-premise counterpart, which can lead to limitations in flexibility, integration, maintenance. Technically, you are taking an existing software and move the servers to another place. Essentially, it’s the same old PLM in a new environment.

3. SaaS Hosted with Shared Computing and Storage Resources

This level of SaaS PLM begins to leverage more advanced cloud tech capabilities. By sharing computing resources, such as application servers and databases, across multiple clients, this architecture improves efficiency and reduces costs. It’s a step towards true cloud-native functionality, enabling better performance and scalability. However, the sharing of resources also requires careful management to ensure data security and performance consistency across different tenants.

4. Multi-Tenant SaaS System

Here, we enter the realm of true cloud-native PLM systems. A Multi-Tenant SaaS System allows multiple accounts or tenants to be created and managed within the same platform. Each tenant operates independently, but they all share the same underlying infrastructure and software. This architecture provides significant advantages in terms of cost-efficiency, scalability, and ease of updates. Since all tenants are on the same version of the software, updates can be rolled out universally, ensuring that all users have access to the latest features and security enhancements.

5. Multi-Tenant SaaS PLM with Multi-Tenant Data Model

At the pinnacle of SaaS PLM architecture is the Multi-Tenant SaaS PLM with a Multi-Tenant Data Model. This system not only allows for multiple accounts within the same platform but also facilitates the sharing of data between these accounts. This level of integration is particularly beneficial for companies that need to collaborate closely with suppliers, partners, or even different departments within their own organization. The ability to share data seamlessly between tenants can lead to significant efficiencies, better decision-making, and a more cohesive digital thread throughout the product lifecycle.

What is my Conclusion?

I can see an importance of understanding what is behind each SaaS PLM you can find in the market. If you’re in the market for a SaaS PLM solution, it’s crucial to pause and evaluate exactly what you’re being offered. The term “SaaS PLM” can encompass a wide range of architectures and capabilities, each with its own strengths and limitations. By understanding the different levels of SaaS PLM, from basic subscription models to advanced multi-tenant systems, you can make a more informed decision that aligns with your organization’s needs and long-term strategy.

Choosing the right SaaS PLM solution isn’t just about selecting a software package—it’s about building a foundation for your company’s future success in product lifecycle management. Understanding the underlying architecture will help you craft a strategy that not only meets your current requirements but also scales with your business as it grows and evolves.

Just my thoughts…

Best, Oleg

Disclaimer: I’m the co-founder and CEO of OpenBOM, a digital-thread platform providing cloud-native PDM, PLM, and ERP capabilities. With extensive experience in federated CAD-PDM and PLM architecture, I’m advocates for agile, open product models and cloud technologies in manufacturing. My opinion can be unintentionally biased.