Nothing is more painful in PLM business as PLM upgrades. Historically, PLM implementations took a long time and include many customizations. The result of this practice was a PLM implementation based on a specific version of PLM software, which is customizable to the level that made a system upgrade very difficult and sometimes nearly impossible. The implementations stuck in such status are usually called “release lock”. Companies stuck in these situations are suffering because of different reasons. The PLM system is a huge investment and the company uses it in production to support mission-critical processes. At the same time, it is impossible to bring a new release from a vendor to enable new features and bug fixing. For vendors, these implementations are also a big problem. They cause vendors to support multiple releases and do fixes for customers running outdated versions. This is a royal pain and every single vendor is dreaming how to kill them. But a customer is paying six figures maintenance a year and stuck in the old release, as a vendor you have no choice, but to support it. In the PLM world, vendors do it for large customers with a lot of money on the table, but size does matter and you can easily find yourself in the situation when you are in release lock and vendors refuse to support the PLM software version you use.
PLM vendors have been looking at how to solve this problem for a long time. The decision is not obvious and the solution is a mix of technology and business. Technologically you can make an on-premise PLM system to support migration between versions by creating a better data modeling engine and migrating customers to a new version transparently. Some vendors made such claims and made an upgrade part of the subscription model. In my view, Aras pioneered the approach of “upgrade included” for on-premise systems. At the same time, hosted cloud PLM systems did basically the same because hosting means to maintain a PLM system hosted using some IaaS (or dedicated data center infrastructure) and contracts include an upgrade. In both scenarios, customers eventually pay for upgrades directly or indirectly to vendors. Subscription payments supposed to cover the cost of running upgrades and incentives vendors to think about how to make a better technology to support a fully upgradeable model.
Meantime, a new SaaS multi-tenant model evolved for the last decade. The multi-tenant SaaS model redefines the architecture of the system. It includes re-thinking data management layers, adopting new databases and storage mechanisms, defining new tenants and logical models, and laying a new paradigm in how companies are managing and sharing data. Learn more about it in my recent article- Basic Elements of SaaS PLM How does it help to keep the system upgradable? The new architecture of the system and its foundation make two things that fundamentally different – (1) shared resources architecture optimizes the cost and allows to multiple companies to use the same infrastructure; (2) Tenant, Logical, and Customization model is created from the beginning to use frequent releases and DevOps models. Such a new architecture and technologies create the foundation of a continuously upgradeable system, which allows everyone to run on the same version of the system. A more sophisticated SaaS infrastructure can allow isolated tenants and freezing upgrades. Moreover, multi-tenant system infrastructure can be hosted for a single tenant as well, which eventually turns technical problems into a business model. Large companies can consider using multi-tenant systems as an instance for their corporate or supply chain.
Earlier this week, I attended a Siemens webinar speaking about TeamcenterX. As Siemens calls it now – future-ready cloud SaaS PLM. The message about SaaS is that the system is instant on and you don’t need to worry about anything – installations and upgrades. The TeamcenterX website provides little information about subscription levels and infrastructure options. So it is really hard to understand if the subscription will provide a shared multi-tenant instance of the Teamcenter database or individually hosted Teamcenter databases will be running on a multi-tenant instance or database (eg. AWS Aurora or similar).
What the future of upgrades means for PLM vendors?
Not to support upgrades will soon become a non-starter for PLM vendors. To address such a problem, vendors will have to re-evaluate their existing platforms and technological options. The upgrade will become a costly operation PLM vendors have to support. It will be a trigger to upgrade infrastructure and to move to SaaS platforms capable of providing flexibility in sharing resources, to support continued development and eliminate costly data upgrades from the beginning.
What the future of upgrades means for manufacturing companies?
The manufacturing environment is changing. The pressure of cost, operation efficiency, new business models, contractors, and suppliers changes. This is a shortlist of challenges manufacturing companies are living every day. Companies cannot afford to run old PLM systems and to upgrade them every 10 years. This is a thing in the past. You cannot run manufacturing using decade-year-old software. Check PLM vendors and ask what upgrade model they have, how often new releases and fixes are coming, who is responsible for the upgrade, data migration, and customization. It can help you to avoid a set of very costly and painful mistakes.
What is my conclusion?
In the current status quo, not all PLM vendors and customers will be able to afford to support the needed level of upgrades, to bring new features, functions, and to evolve with the new development and requirements of security, data management, and business process. It will create a division of PLM vendors. Old, non-upgradable on-premise PLM systems will eventually stall in time and die. A new generation of flexible SaaS platforms will come to support multiple tenant options, release schedules, and new feature introductions. An upgrade will be soon a must-have feature of the system, which exists and supports the options and environments customers need. Just my thoughts…
Disclaimer: I’m co-founder and CEO of OpenBOM developing a digital network platform that manages product data and connects manufacturers and their supply chain networks.