2021 is almost over and I want to use the moment to reflect on what we’ve seen happening in the PLM industry and related manufacturing and engineering software technologies. COVID 19 changed forever the way we work and communicate. There is no way back to the place where we’ve been before and a new way to do a business, manage information, product data, product development process, manufacturing operation, supply chain. I also wanted to reflect on the PLM market, business systems providers, special PLM solutions providers, and related disciplines such as product data management (PDM), application lifecycle management (ALM), document management, CAD software, collaboration tools.
According to researches, analytical, and consulting companies, the PLM market looks bright. Below is the chart that shows investments in different verticals of the PLM market according to CIMdata.
According to the same research made by CIMdata, the M&A activities in the PLM space are at a record pace in 2021. PLM space is attractive for manufacturing and industry leaders – software vendors, service providers, and manufacturing companies. Public PLM vendors show double-digit growth Y2Y growth. All leading PLM vendors – Dassault Systemes, Siemens, PTC, Oracle Corporation, Aras Corporation are focusing on how to build up their platforms for digital transformation.
This is the broadest topic that dominated PLM space and all PLM vendors are focusing on how to ride the wave of digital transformation projects that seem to be more attractive to manufacturing companies, focus on business processes, remote working, on the cloud, data sharing, and overall performance of a PLM system and customer experience.
However, digital transformation is not granular enough and provided a too broad spectrum of topics for PLM vendors and implementation. To stay more focused PLM vendors were looking at more specific aspects of system improvements such as digital thread, supply chain, entire product life cycle, product quality, sustainability, and digital manufacturing processes.
The industry is moving towards broad technological transformation and all PLM vendors understand it very well. Cloud and SaaS are de-facto here, even PLM vendors call them differently, the consensus that new technology in data management, services, AI, DevOps, and IoT are leading the trend of system architecture transformation. Practically all vendors are looking at how to leverage new technology to improve the ability of systems to solve modern manufacturing challenges in manufacturing methods (eg. additive), sustainability of supply chain, connected products, global markets, and disruption caused by the COVID19 pandemic.
Data, Information, Intelligence
Manufacturing companies are sitting on a goldmine of data and vendors understand that by figuring out how to use existing data assets, you can provide a big advantage to companies to optimize their processes and their performance. There are several interesting trends in this space. Overall, there is a hunt for data from all possible directions- existing data assets, collection of information from physical assets (eg. machinery), products, and customers. The technologies and services that are capable to capture the data are in high demand. The transformation of data into intelligent assets is another interesting trend.
Manufacturing Companies Are Focusing On Software
It becomes obvious that software is everywhere. Connected products, switching to services, manufacturing operation automation, embedded software are the greatest examples of why software is important for manufacturing companies. Therefore all manufacturing companies are looking at how to build software these days. This means there is a high demand for engineers, teams, and technologies that can speed up the manufacturing roadmap to build software. This is a very interesting trend because it represents a partial switch from buying business software to developing and integrating existing systems and components into software solutions created by manufacturing OEMs, contract manufacturers, and suppliers.
Education and Training
The knowledge gap is growing in PLM. Product lifecycle management, supply chain, and the entire lifecycle of products is a complex space that requires education to understand and manage. Digital transformation brings an additional level of complexity. Everyone can create an Excel spreadsheet with a part list exported from the CAD system, but by organizing a comprehensive PLM solution, the knowledge gap becomes very obvious. Many best practices in manufacturing companies are coming from the pre-digital age and require re-thinking. New digital technologies provide new capabilities that must be combined with process thinking, configuration management practices and provide solutions for modern manufacturing challenges. So, education is in high demand.
What is my conclusion?
The market is great for PLM vendors because manufacturing is transforming. Manufacturing demands PLM solutions for the entire product lifecycle. A siloed processes are not useful in modern manufacturing. Companies demand a seamless information flow delivered by PLM software, complex products required new data management technologies and global manufacturing networks demand on cloud solutions, virtual reality, artificial intelligence, and sophisticated methods to manage engineering change in complex, globally distributed teams. Major players in PLM business are traditionally focused on M&A activities and leveraging their resources to acquire customers, technologies, and teams to sustain their growth. Product Lifecycle Management software (PLM) is transforming to provide a set of online services that are different from old fashion PLM systems to support future manufacturing transformation and the global supply chains. Just my thoughts…
Disclaimer: I’m co-founder and CEO of OpenBOM developing a digital network-based platform that manages product data and connects manufacturers, construction companies, and their supply chain networks. My opinion can be unintentionally biased.