Product Lifecycle Management (PLM) is a concept that has been around for decades. Being in this business for the last 20+ years provided me an opportunity to see a few interesting turns that the market and technology was taken and reflect on some of the market opportunities I can see now.
In my last article, I was discussing why the word “PLM” usually means different things to different organizations and people. Check my article – The 12 “P”s of PLM Explained by Role: How to Make PLM More Than Just a Buzzword.
PLM was originally built to handle the complex needs of large enterprises in so called “traditional industries” such as automotive, aerospace, defense, large industrial companies developing complex (usually configurable) products. While these companies created PLM business systems that we know today, because of PLM roots connected to CAD software and some other reasons, CAD (later PLM) vendors always questioned how to expand PLM business to the mid-market. It was always a glowing space and to some degree an underperforming place of unrealized opportunities.
Over time, there’s been a growing realization that smaller businesses – small-to-medium businesses (SMBs) and small-to-medium enterprises (SMEs)- also face challenges in managing product data, collaboration, and processes, but despite the challenges are similar, the solution must be different. Yet, despite this recognition, in my view, all PLM vendors have struggled to connect with mid-market companies in a meaningful way. It might sound like a broad claim, but except of examples of successful Windows based PDM tools, no PLM vendor provided a broadly adopted solution for midsize manufacturing businesses.
In my article today, I want to discuss why has it been so difficult? And what’s next for PLM in this market? Let’s dive into the story.
PLM’s Origins: Big Tools for Big Companies
PLM started as a toolbox for large companies, offering an array of capabilities to manage products throughout their lifecycle—from initial design to manufacturing and beyond. With the roots in complex MCAD systems, these PLM were managing compex CAD data, product configuration, engineering BOMs. These systems grew up powerful and highly customizable. But they came with a price: complexity and cost. Implementing PLM required significant investments in software, hardware, and consulting. For SMBs, this level of commitment was simply out of reach.
As a result, PLM systems were often dismissed by smaller companies as “something for big businesses.” Spreadsheets, email, and basic file storage systems became the go-to tools for SMBs to manage their product data. While these methods worked to some extent, they created inefficiencies and silos that held companies back as they grew.
The PDM Era: A Glimmer of Hope
By the end of 1990s and early 2000s, the rise of 3D CAD systems sparked a need for managing the growing volume of design files (CAD files). Product Data Management (PDM) systems emerged as a simpler, more focused solution, especially for SMBs. These tools helped smaller teams organize their CAD files, manage revisions, and collaborate more effectively—all without the heavy lifting required by PLM.
For a time, PDM was a success story. Some of them provided extended capabilities to manage additional data attributes, more advanced workflow capabilities. Many SMBs adopted these tools because they were affordable, relatively easy to use, and solved a specific pain point. But this golden era didn’t last long. As large CAD and PLM vendors acquired PDM solutions, the focus shifted toward integrating them into enterprise PLM platforms. The simplicity that made PDM appealing to SMBs was gradually replaced by more complexity and higher costs. Many SMBs were left behind, with no clear alternative. Some of these systems (for example SmarTeam, which was acquired by DS, outlived their development team by many years). Another reason why those systems were killed was because their growing capabilities created some market danger to their “big brothers” from the enterprise portfolios.
Missed Opportunities in the Last Decade
Over the past 10 to 15 years, PLM vendors have made several attempts to break into the SMB market. However, these efforts haven’t been as successful as hoped. A big part of the problem lies in the approach. Many vendors tried to take their enterprise PLM systems and “scale them down” for SMBs, offering fewer features at a lower price, predefined templates without flexibility, and some others. While this might seem logical, it missed the mark. SMBs don’t need a cheaper version of enterprise PLM—they need solutions designed specifically for their needs.
Another challenge has been internal competition within PLM vendors. Enterprise sales often take priority, leaving SMB-focused efforts underfunded or sidelined. The result has been a lack of innovation and flexibility in the solutions offered to SMBs. Many systems still feel too rigid and overwhelming for smaller teams to adopt effectively.
What Midsize Companies Are Looking for in PLM
Midsize companies operate with small, agile teams where individuals wear multiple hats, managing tasks across engineering, manufacturing, and beyond. For these businesses, a PLM system must be intuitive and easy to use, as they often lack dedicated IT or PLM staff. The right solution should minimize complexity and streamline workflows, enabling small teams to collaborate effectively without needing significant technical expertise. Simple yet powerful systems are key to helping these teams focus on their core work rather than struggling with overly complicated tools.
Although their teams may be small, midsize companies often require a high degree of solution diversity. Each team or function within the organization might have unique needs, ranging from managing engineering data to coordinating supply chain activities or tracking compliance. A one-size-fits-all PLM system simply doesn’t work for them. Instead, they need flexible platforms that can be tailored to different workflows while remaining scalable and easy to adapt as the business evolves. This diversity highlights the importance of modular and customizable PLM solutions that cater to a wide array of requirements without overwhelming users.
The rise of remote work has made support for distributed environments a top priority for midsize companies. Employees, contractors, and suppliers are often spread across various locations, making it essential for PLM solutions to provide real-time, cloud-based access to data. This allows teams to collaborate effectively, regardless of geography, and ensures that everyone—whether on-site or remote—can stay aligned. Secure access controls and asynchronous communication tools further support these distributed setups, creating a seamless collaborative experience.
Midsize businesses rarely operate in isolation and often depend on contractors and suppliers to bring products to market. PLM systems must facilitate these external relationships by allowing secure data sharing and seamless collaboration across organizational boundaries. From material sourcing to product design, the ability to integrate external partners into the product lifecycle ensures smoother workflows and reduces the inefficiencies caused by manual data exchanges or disconnected processes. Effective supplier collaboration can be a significant differentiator for these businesses, improving time-to-market and product quality.
A significant factor for midsize companies is their constrained budgets. They need PLM solutions that are cost-effective, offering affordable pricing models that align with their financial realities. Subscription-based cloud solutions with minimal setup costs are particularly attractive, as they allow businesses to start small and scale as needed. At the same time, these companies value solutions that minimize the need for expensive customizations or ongoing IT support, providing a strong return on investment by improving efficiency and reducing waste. By addressing these needs, PLM vendors can unlock the potential of the midmarket, creating systems that truly resonate with midsize businesses.
The White Space: A Big Opportunity for SMBs
Despite all past struggles, the SMB PLM market remains an exciting and largely untapped opportunity for PLM vendors. This is a place where companies by large numbers are using homegrown solutions, Excel-ware and various combination of document management, project management tools, collaboration platforms like chats, etc.
Unlike the enterprise space, where vendors compete fiercely, the biggest competitor in the SMB world is the status quo—spreadsheets, disconnected tools, and inefficient workflows. This creates a unique opening for vendors willing to reimagine their approach.
To succeed, SMB-focused PLM solutions need to address some key points:
- Simplicity and Flexibility: SMBs don’t have the resources to deal with complex, high-maintenance systems. Solutions need to be easy to use and adaptable to different workflows.
- Cloud-Based Platforms: SaaS solutions lower the barrier to entry, reducing costs and making it easier for teams to collaborate from anywhere.
- Integration with Existing Tools: SMBs rely on tools like CAD, ERP, and CRM. A good PLM system should connect seamlessly with these systems rather than forcing SMBs to replace them.
- Customization Without Complexity: SMBs value tools they can tweak to fit their needs, but they don’t have the time or expertise for heavy customization. Low-code or no-code options can help here.
Learning from the Past
If there’s one thing PLM vendors should take away from past efforts, it’s the importance of designing for SMBs from the ground up. In my view, there are some great examples to get inspiration from:
- AutoCAD’s Openness: By allowing users to customize the platform with tools like AutoLISP, AutoCAD became a standard in many industries.
- SOLIDWORKS PDM: Its simple, Windows-based interface made it approachable and effective for smaller teams.
- SharePoint’s Growth: Microsoft’s focus on accessibility and integration turned SharePoint into a tool widely adopted by companies of all sizes.
- Spreadsheet-Like Platforms: Tools like Airtable and Smartsheet show how simplicity, combined with flexibility, can lead to widespread adoption.
Each of these examples highlights the value of balancing usability, customization, and affordability—qualities that SMBs prioritize. The history cannot be repeated. Therefore, it is unlikely to see a “new version of Conisio, TrueEVault, SmarTeam, and some other tools.
Why Now?
A typical question every business people and investors will ask you – why now? What is different in 2024 that didn’t happen for the last 20 years that will make midsize PLM business opportunity significant and valuable. Here are my top three reason what is different now and why the result of PLM development for midsize companies can bring outcomes similar to development of SOLIDWORKS and AutoCAD in the next 10 years.
- Digital transformation of supply chain: The interest of companies to work digitally is super attractive. Companies are trying to figure out how to connect with right companies, digitally transform B2B relationships, to buy components directly online and optimize supply chain accordingly. The Amazon of manufacturing for supply chain is a big and unrealized opportunity yet.
- Data and AI: The interest for product related data and getting access to up to date information is skyrocketing. Fueled by opportunities that created development of AI tools will create a demand for data that largely used by all small and medium size businesses.
- New generation of people and SaaS: The new “digital generation” of engineers is here.They are actively getting in the business and looking for new PLM software capable to transform all aspects of manufacturing – enterprise resource planning, supply chain management, improvements of product development process is significant.
What is Conclusion?
Midsize companies define the untapped opportunity for PLM business. I’m looking ahead to the path to unlocking midsize PLM opportunity with new technologies and processes. This market presents a huge upside for PLM vendors willing to take a fresh approach. Instead of trying to “trim down” enterprise systems, vendors should focus on building solutions that meet SMBs where they are, using digital tech, new platforms, AI and new user experience. This means prioritizing simplicity, offering flexible and affordable SaaS platforms, discover how to make the simple yet flexible and ensuring tools can grow alongside a company’s needs.
Ultimately, SMBs aren’t looking for watered-down versions of “existing enterprise PLM”. They need tools that help them solve their problems without adding unnecessary complexity. With the right solutions, PLM vendors have the chance to unlock a market that’s ready for transformation. It’s a white space with massive potential, and those who get it right could redefine how smaller businesses manage their product lifecycles.
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.
