Earlier this month, I shared my thoughts about what happened with PDM for the last 10 years? PDM was an interesting business for the last decade. While PDM functionality is usually provided by the system coming from the same vendor and integrated with a CAD application, we can see that the adoption of these systems is not great. I can see some progress in large companies, but medium-sized businesses are struggling to manage data and at the same time, vendors are struggling to sell PDM systems and get them adopted. And the problem is still the same – find data, manage revisions, create BOM, calculate the cost, order parts.
Today, I want to expand the horizon and drive some conclusions about what happened with PLM for the same time period. Here are my top 5 things that happened to PLM during the 2010s
1- PLM awareness
I don’t have scientific proof (we can get it from analysts), but the awareness of PLM is increased for the last decade. While PLM is still often considered as engineering project first, there are many voices coming from industrial companies about the importance of PLM functions beyond engineering. The tools are not fully supporting that, but I will talk about it later on. Despite growing awareness in PLM, the industry didn’t crack the mid-market for PLM and still, the majority of PLM activity is happening in manufacturing and industrial companies with annual revenues above $1B.
2- Growth by acquisitions and investment activity
The industry was growing by acquisitions. Large PLM companies were acquiring new technologies, startups, established vendors and customers. The majority of market share in PLM in 2010 and in 2020 are the same companies. I can see a growing interest in investments in PLM. There are few investments and M&A transactions that happened in PLM space (mostly after 2015).
3- Cloud and SaaS
PLM industry steps into the cloud and SaaS business. Practically all vendors today are offering some sort of “cloud”. There is no doubt, cloud technologies in the future, but companies are approaching cloud and SaaS businesses differently. Autodesk announced cloud and PLM back in 2011 pushing other vendors into a cloud territory. There are a variety of approaches – hosting existing products using IaaS platforms, building universal on-prem/cloud platforms, acquiring new technologies and companies (eg. PTC/Onshape) to build new SaaS products. Overall, there is a high activity level around SaaS/ cloud and I expect it to grow in the 2020s.
4- Product complexity, System Modeling, Digital Twin, Digital Thread
Products are becoming more complex. A typical product is a combination of mechanical components, electronics, software, and often online (cloud) services. Products are connected and there is a need for better tools to manage the complexity of information. Different companies are fighting these problems differently. Large companies are looking for comprehensive system modeling frameworks, simulations, and tools. The situation even worst for smaller companies – in parallel with fighting the complexity of data management and simulations, these companies are trying to escape Excels.
It became obvious in the 2010s that PLM should be expanding beyond MCAD boundaries. Traditionally “PLM language” has MCAD roots. Even more, ECAD, ALM and even BIM technologies and products sound very PLMish but using different terminology. There is no such agreement in terminology and tools. New names are coming – Digital Twin and Digital Thread. In my view, companies like Digital Twin as a neutral way to think about convergence between different design, simulation and data management tools.
5- Global development
Global development is trending in manufacturing. It became a visible challenge for the last 2010. An increased specialization, contract manufacturing, outsourcing, and many other global activities are growing. Manufacturing companies are under significant pressure to innovate while controlling the cost, resources, and customers. Even the smallest hardware startup is operating globally these days. Large manufacturing and industrial companies are looking at how PLM tools can help them to manage their engineering, production, maintenance and support activities. In my view, PLM implementations to support such activities are still in very early infancy and only available for large global enterprises.
So, what didn’t work in the 2010s as we expected? Here are a few technologies and product directions that we are going to leave in the past decade.
- Large web and tech companies didn’t step into PLM software development business
- The high expectations about the role of social media and social networks in PLM development
- Despite the wide adoption of mobile, these devices didn’t replace traditional design platforms
- Open source PLM didn’t materialize as a business model
- The adoption of cloud tools was slower than expected
What is my conclusion?
The last decade was a very healthy period for the PLM business. Companies involved in the PLM business demonstrated strong performance and growth. There is a strong need for digital tools capable to support manufacturing companies in product development and digital transformation. Industrial companies are looking at how to continue building new business models and there is a strong demand for new tools capable to support these companies. Large global enterprises are evaluating how to retool their PLM systems for the next decade and medium-size companies are looking at how finally escape Excels and move into SaaS PLM. It is probably the best time to be in the PLM business. Just my thoughts…
Good luck in 2020 and Happy New Year!
Disclaimer: I’m co-founder and CEO of OpenBOM developing cloud-based bill of materials and inventory management tool for manufacturing companies, hardware startups, and supply chain. My opinion can be unintentionally biased.