A digital thread is a data-driven framework that connects and integrates information across a product’s entire lifecycle, from concept to disposal. It provides a continuous flow of data, breaking down silos and enabling real-time monitoring, collaboration, and data-driven decision-making throughout the product’s life. In recent years, I’ve seen a growing interest in digital thread coming from manufacturing companies and PLM software vendors. It is quickly becoming a new paradigm of speaking about product lifecycle management.
I wrote a few article speaking about Digital Thread (DT) evolution and various aspects of DT development. Here is one of them – Navigating the Evolution of Single Source of Truth: From Files and Folders to Digital Twin/Threads and Product Knowledge Graphs. Also, a series of my five articles about Digital Thread from 2022.
Part 1: Digital Thread Evolution – Overview
Part 2: Digital Thread Evolution – Folders, Files, and Part Numbers
Part 3: Digital Thread Evolution – Enterprise Integrations
Part 4: Digital Thread Evolution – Data Sharing and Federation
Part 5: PLM and Digital Thread Evolution – Knowledge Graph Part 5 (final)
It is important to look at the evolutionary perspective on a DT because it shows you that DT is not a new concept – it is something that we do (similar to PLM), but it is evolving as we move forward in the technologies that support Digital Thread.
While Digital Thread is a promising concept, we should learn from the disconnect between original vision of PLM and reality of what PLM industry and CAD/PLM vendors implemented. My article about it in my recent article – PLM: Vision vs. Reality – The Ongoing Disconnect and Current Momentum where I speak about various aspects that lead to original vision of PLM and the reality of PDM/PLM software developed by many vendors in the past 25+ years.
Last week both myself and Ron Ferrone, had one of those blogging moments when the same topic came to both of us and got published practically simultaneously. The topic was DTaaS (Digital Thread as a Service). Here are both articles Digital Thread as a Service: From Requirements to Maintenance with xBOM Graph Model (via OpenBOM) and also an article from Rob Ferrone Digital Thread as a Service, Part 1: The problem statement. (Rob is planning a series of article about DTaaS – I highly recommend you to follow it).
But today, I want to talk about something that is absolutely necessarily to make any technology and product successful – business model.
Why Digital Thread and Why Today?
The concept of Digital Thread as a Service (DTaaS) represents a significant shift in how organizations manage and utilize their product lifecycle data. While the promise of DTaaS lies in its ability to create seamless data continuity across the entire product lifecycle, it faces a fundamental challenge: the conflict between the need for free-flowing data and traditional enterprise software business models built on data lock-in.
In the early days of product lifecycle management (PLM), data was something to be stored, protected, and—intentionally or not—locked away. Engineers carefully organized files, companies built rigid workflows, and IT departments ensured that only the right people had access at the right time. This worked well in a world where product development was linear, systems were siloed, and digital tools were used primarily for documentation rather than intelligence.
But today, the world has changed. Products are more complex, supply chains more interconnected, and decisions more data-driven than ever before. A new approach is needed—one that treats data not as something to be guarded, but as something to be shared, connected, and continuously leveraged.
This is where Digital Thread as a Service (DTaaS) comes in. It promises a future where product data flows seamlessly across the entire lifecycle—from initial design to manufacturing, from suppliers to customers, from engineering teams to service teams. But there’s a fundamental problem standing in the way: traditional enterprise software business models weren’t built for data freedom.
The Struggle: A Tug-of-War Between Connectivity and Control
Imagine a company designing an electric vehicle. The engineers use CAD tools to create 3D models, the manufacturing team relies on PLM to manage the latest revisions, procurement teams reference ERP for supplier information, and service teams need access to past maintenance records.
In theory, all of this data should connect. A true digital thread would ensure that when a change is made to the battery design, everyone downstream—from manufacturing to field technicians—gets an instant, accurate update.
But in reality, the information is trapped.
Each system holds a piece of the puzzle, but they don’t talk to each other naturally. When I say “naturally”, I mean although all these systems technically have APIs that allow to customers and vendors to make those connections, all systems aren’t particularly motivated to enable free-flowing data—because they make money by keeping customers dependent on their platforms.
Enterprise software has long been built around control. The more data a company stores in a PLM or ERP system, the harder it is to switch to a competitor. Business models are built around per-user licenses, storage fees, and expensive integrations—not around open, dynamic, cross-platform connectivity.
And yet, for DTaaS to truly work, this has to change.
Rethinking the Business Model: How DTaaS Can Win
The challenge is clear – how to make connectivity incentivized by a business. For Digital Thread to be successful, we need to figure out how one that create connection between two systems will make its profit not against the will of software and vendors selling enterprise. If companies want to adopt DTaaS, they need a new way to generate value from software—one that doesn’t depend on data locking and selling application services based on the data. This shift is about rethinking the fundamental business model of enterprise software.
One potential path forward is the open platform ecosystem approach. Imagine if software providers stopped competing over who could lock in the most data and instead focused on who could provide the best services around it. In this model, vendors open up their APIs and charge for usage-based services rather than restricting access. It might be a naive approach, but it is fundamentally doesn’t sound different from what we do today.
And then there’s the consortium approach, where entire industries come together to create shared DTaaS platforms that benefit all participants. This would require unprecedented cooperation between manufacturers, software vendors, and suppliers—but if successful, it could lead to an ecosystem where data flows freely, benefiting everyone. This one is even more naive, but might work in certain conditions.
Moving to more realistic options and possibility – the data brokerage model. Instead of charging for data storage or software licenses, companies could monetize the insights generated from the digital thread. For example, an AI-powered system could analyze product lifecycle data and predict which components are most likely to fail, allowing companies to proactively optimize their supply chains.
Other models might focus on subscription-based access to real-time data, or even pricing software based on business outcomes. Imagine if a PLM vendor charged a company only when the software helped reduce product failures or accelerate time-to-market. Think about revolution that Google made in advertising by monetizing pay per click model.
The Road Ahead: Overcoming Resistance
Even with the right business model and the right technology, change won’t happen overnight.
Many companies still hesitate to open up their data due to concerns about security, compliance, and competitive advantage. IT departments, long accustomed to protecting company data at all costs, must undergo a cultural shift—one that recognizes that data is most valuable when it’s connected, not locked away.
Another challenge is value demonstration. Companies need to see tangible benefits from adopting a DTaaS approach—whether it’s faster product development, lower costs, or improved product quality.
But despite these challenges, the momentum is building.
Manufacturers are demanding more interoperability. Emerging startups are disrupting the traditional software giants with more open and flexible solutions. And the increasing complexity of products—from electric vehicles to smart medical devices—is forcing companies to rethink how they manage and share product data.
The shift to DTaaS won’t happen all at once. But the industry is beginning to recognize that the old way of managing product data—through locked-down, proprietary systems—is unsustainable in the modern world.
The future belongs to companies and eco-sysetms that embrace connectivity, data intelligence, openness, and collaboration. And those who adapt their business models accordingly will be the ones who lead the way.
What is my conclusion?
If you’re in the business of designing, building, or managing complex products, now is the time to ask: Is your data serving you, or is it being held hostage?
Are your software tools helping you create a seamless digital thread, or are they keeping critical information locked away?
The transition to Digital Thread as a Service is not just a technological upgrade—it’s a strategic decision that requires a new way of thinking. Those who embrace it will gain a competitive advantage in an increasingly data-driven world.
Just my thoughts…
Best, Oleg
Disclaimer: I’m the co-founder and CEO of OpenBOM, a digital-thread platform providing cloud-native collaborative services including 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
