I’d like to thank everyone for signing up for our recent webinar, “Putting the SAP-Siemens Partnership in Context,” and a special thanks to the large percentage that came to hear it live. I hope that it met your expectations.
There were a lot of questions that I will try to answer here. Some of them are repeats or variations on a theme, so some of the answers may be short. Some questions have been revised for clarity.
For those of you who were unable to join the webinar you can watch it here.
Will SAP continue to invest & support SAP PLM for life sciences & CPG process industries?
The recent announcement focuses on automotive, aerospace, and industrial equipment. As I mentioned in the session, SAP gets a lot of its PLM revenues from outside of these three industries, so I would expect their investments to remain strong in other industries, like these, that are important to their customers. Is it true that SAP PLM was sold on the basis that it was free for any SAP customer? Many SAP implementations indeed include purchases for many more licenses than are planned for use. That could make those licenses available for “free” to an SAP PLM implementation effort. But companies need to have a fairly comprehensive ERP implementation, particularly around the material master and bill of materials, to be able to use the SAP PLM functionality. Based on past conversations with SAP implementation experts, many companies are not at that level, thus requiring additional implementation resources just to start. And then, any SAP PLM implementation would likely have to include Blueprinting and the other SAP implementation steps, all not free.
How far behind is the SAP/Siemens digital thread from Oracle’s digital thread on a unified platform? (Realization vs. marketecture?)
It depends on what you want that digital thread to support. Oracle’s enterprise product record does provide strong, consistent support for the digital thread from idea through to commercialization. But there is a big hole for most clients around the data created as part of the product development and engineering process, for which they may not use Oracle solutions. And even if they do use Oracle solutions to support engineering work-in-process, Oracle does not support these capabilities as well as Siemens does in Teamcenter.
But, if your focus is on an “operational digital twin” (an Oracle turn of phrase that I like) that gathers data from an operational system and supports measuring and communicating key process indicators (KPIs) of interest to the business, then it is sufficient and, in some ways, ahead of the SAP-Siemens combination. However, many people in a range of industries want an engineering digital twin (a CIMdata phrase) that is physics-based. This is out of scope for Oracle PLM Cloud.
That said, SAP-Siemens are just getting started. This image, from a recent SAP Webinar, is quite helpful.
Do you see competitors of Siemens Digital Industries Software (other PLM vendors) exploring such alliances, or are their product portfolios robust enough to not deem this necessary?
It depends on how wedded you are to the Industry 4.0 vision and how much of it you want you and your partners to support. If you just want to focus on developing smart connected products, then you need enough tools and partnerships to cover it. I think that most of the top providers have enough in place to support developing smart connected products using their organic resources and partnerships.
If you want to go beyond that to support smart cities or smart buildings, for example, then you need to bring in more AEC support, as well as other enabling technologies. (It is important to note that Siemens first invested in Bentley, a leader in that space, in 2016 and has made other moves to strengthen this relationship.)What are the chances of Dassault Systèmes, PTC, or Aras to sell PLM to SAP customers now?
I think that competitors of SAP and Siemens will spin up the fear, uncertainty, and doubt (FUD) machine, as all companies do when something unsettling happens in their market. (That is what I used to do when it was my job to do so at Dassault Systèmes.)
In reality, I think that their prospects are not much different in the short and medium-term than they were before the announcement of this partnership. There might be a few SAP customers that are making PLM decisions that could rethink them. Still, SAP customers, overall, have had to integrate to non-SAP PLM-enabling solutions to support product design and engineering for a long time. Over time, as the support for the “true digital thread” becomes more concrete and proven, then SAP customers will be more likely to look to Teamcenter first, with their SAP sales team pushing it too.
As I said in the webinar, the “P” in PLM is often politics, and with a budget-dominating solution like SAP in the mix at more companies, the office intrigue level will undoubtedly rise.
Will the partnership lead SAP to give up its TDM/PDM/PLM business and development?
They have promised to continue to work the roadmap and support existing customers until 2040, more than enough ramp for customers to feel comfortable.
See this slide deck and SAP blog post for more information:
What would your recommendations be for Service providers who have been supporting both of these solutions in the new world after their partnership?
I would be talking to my contacts at both SAP and Siemens to get clarity on this partnership as it evolves. As I mentioned in the session, I think that SAP and Siemens have a lot they can learn from existing joint customers who have been handcrafting their own digital threads, often with significant help from service providers. In my opinion, the SIs as a group should be playing a role with the two principals to help define this future together.
What happens to the SAP PLM Alliance, and will SAP stop supporting its PLM platform at some point?
That is one reason that I had to use The Wayback Machine (archive.org) to look at the SAP PLM Alliance website in the past because it now redirects to a DSC page.
The Alliance partners will certainly sell less MCAD integrations to SAP PLM when Teamcenter provides the engineering work-in-process and lifecycle collaboration support.
Both companies have made significant technology acquisitions. How much of it is integrated enough to support an Industry 4.0 platform or platforms to support the digital thread?
By definition, at least the one that CIMdata uses, the digital thread is virtual – many different systems provide strands of information, to extend the metaphor, to build out a complete thread. One of the advantages of the partnership is that SAP and Siemens will be building those integrations and selling them vs. each company using SAP and Teamcenter having to figure it out on their own.
Today, the integration process is just starting between SAP and Siemens for product data management and lifecycle collaboration support. What I tried to get across in the webinar is that if you add up the resources of the two companies, they could support more of the Industry 4.0 vision than any other entity in the PLM space. Whether they WILL or not remains to be seen.
Can you share any info on what the companies are thinking around model-based systems engineering?
We have a good understanding of what both companies are doing in that space, but that level of detail is beyond this webinar. Give us a call.
Will T4S get stronger with this partnership? Or is there a different integration strategy?
I had to look up that product acronym: The Teamcenter Gateway for SAP Business Suite. I would expect that there would be a very different integration strategy. In some ways, it will be deeper, because each will be exposing more of their internals to the other as part of the partnership (my assumption). But in some ways, the integration might be simpler given Siemens use of Mendix to support data and application integration.
How will existing SAP PLM customers will be affected by this partnership?
As with many things, it depends. If they are happy with SAP PLM and the functionality that it provides, they can stay there. SAP is committed to investing in and supporting SAP PLM for years to come. But if they are reaching the limits of what SAP PLM can provide and want to look elsewhere, Teamcenter would likely have been on their shortlist before (along with the usual suspects) and may get an elevated slot because of the partnership.
If Teamcenter is already in use, how will the SAP PLM – Siemens solution help?
As mentioned earlier, joint SAP and Siemens customers have had to build the digital thread themselves. Now SAP-Siemens will do it for them, presumably better, cheaper, and more robustly.
What is the outlook for the current DSC-ECTR solution?
As the basis for all of the SAP MCAD integrations, ECTR will continue to live as long as SAP PLM does. DSC is probably more at risk since they offer the integration to NX. The other partners offer integrations to non-Siemens MCAD solutions.
Is there any assumed timeline of sorting out who (Siemens / SAP) is doing what?
CIMdata is not privy to any timelines for the partnership.
Will Teamcenter move to S/4HANA?
Future architecture is a big open topic for the partnership. Today it is based on the on-premise solution that most often runs on Oracle, but SAPs future is on HANA and the cloud.
Are you hearing any concern from customers that have mixed environments that the partnership will “lock out” competitors from integrating independent capabilities into the platform?
Not to date. With all of the third parties offering integrations it would be hard to lock someone out. But you could structure things that limit those third-party integrations vis-a-vis what SAP and Siemens can do working together.
What will happen to SAP’s IPD? Will Siemens take over using Teamcenter Systems Engineering Workbench or sell IPD, too?
This is an open question. The phrase used in the press release was “product lifecycle collaboration and product data management.” Typically, PDM has referred to managing MCAD files. “Product lifecycle collaboration” is more nebulous. As I mentioned in the webinar, this is still an open issue between the companies.
Do you think this partnership was motivated by the threat of open-source alternatives?
No. The only viable open-source alternative in the PLM market is Aras Innovator, and Aras and its ecosystem today are not comparable vis-a-vis the Industry 4.0 vision.
Do we see any impact on knowledge sharing to help strengthen product offerings and alliances, or do we expect barriers?
Siemens touts its openness, so I do not anticipate any issues on their side. SAP seems motivated too.
Do you think this leads to antitrust discussions?
In the US, probably not because our interest in and enforcement of antitrust laws has become vary lax of late. The European Union is another story. But since these are two German companies linking up they may look the other way unless their European competitors make a big issue of it.
Will this be silo offerings or joined up end to end?
The vision is end to end. See the chart in the earlier response.
Why doesn’t the United States have a “drive/vision” here as the German government does for enabling a digital lifecycle? Germany/China seem to have a better long term outlook; the US seems to have ADHD.
Germany, as a country, understands that a strong middle class (for people and companies) is essential to enabling a good quality of life, regardless of party. Our ADHD comes mainly from our political parties. If you want to get more details on this, please download our white paper on Industry 4.0.
Will the SAP integration T4S be carried on or consumed by SAP as an integration?
We have no details on this, but I have to believe it will be different.
SAP/ERP is often viewed as a necessary evil; is PLM becoming a necessary evil (versus a pulled for innovative capability)?
CIMdata believes that a strong PLM strategy and implementation, including an appropriate set of solutions to enable the development and lifecycle support of the products in question is necessary for market success. It is hard to consistently develop quality, innovative, and profitable products that delight one’s customers without it. So, it is necessary. Whether it is “evil” or not can vary widely.