During the last decade, I observed a significant shift in the development and adoption of cloud-based and SaaS PLM platforms. The world of Product Lifecycle Management (PLM) was moving towards cloud technologies and despite initial concern, manufacturing companies are moving.

However, while the industry is increasingly embracing SaaS PLM, not everything seems to be a smooth riding in the PLM world. There is a significant value disconnect in PLM where only 17% of companies (based on the CIMdata research) cannot live without PLM. Other 37% think it is an engineering tool and 27% believe that PLM is too expensive.

Aras is the youngest among PLM mindshare leaders and it was added to this list not because their revenue (still smaller than other vendor in that group), but because the influence Aras made on the market. From the way Aras disrupted the market and supported business processes, we can learn valuable lessons as a company that successfully challenged the traditional PLM business. It happened before the cloud-native tech started to gain traction. Here are a few passages from Engineering.com article speaking why Aras was added to the “PLM elite” club.

“Aras is ideally positioned as a PLM platform with a flexible, scalable and upgradeable architecture, and an open approach that delivers the long-term resilience that companies require. As a result, big corporations like GM and Schaeffler are turning to the Aras PLM platform because it simply works,” commented Aras’ CEO, Peter Schroer.

Founded in 2000, the breakthrough for Aras came in 2007, when they established an open source model. A consequence of this was that the core of Aras Innovator became available for free download. The “bread and butter” of the business became the sale of optional enterprise subscriptions paired with support and customization services.

Aras PLM is known for disrupting the PLM industry in several ways: with Aras Enterprise Open Source allowing everyone to start using Aras for free; with its flexible architecture, subscription model, and a focus on adaptability rather than the rigid systems that dominated PLM for decades. Today, as more companies move to SaaS PLM models, there are important insights we can gather from Aras’ success. Let’s break down five key takeaways modern SaaS PLM providers can learn from Aras PLM.

Enterprise Open Source

Aras Enterprise Open Source is a unique approach to Product Lifecycle Management (PLM) that blends the benefits of open-source software with free distribution model. Aras provides a highly flexible and customizable platform, designed to manage complex product data and processes across a company’s entire lifecycle.

The “open-source” aspect of Aras is primarily reflected in its freely available platform, which can be downloaded and used without upfront licensing fees. However, Aras’ business model includes offering subscriptions for advanced features, support, and regular updates. This allows organizations to benefit from continuous improvements while maintaining the freedom to customize the solution as needed. Aras also fosters an active community of developers and users who contribute to the ecosystem, creating a collaborative environment where innovations and custom solutions can be shared. The “open source” was part of Aras community solutions provided separately.

Flexibility and Open Architecture as a Differentiator

One of Aras’ most distinguishing features is its flexible data model. Aras made flexibility a key priority, allowing customers to tailor the system to meet their unique needs without the burden of vendor lock-in. This openness resonated with companies that needed to customize their PLM solutions while avoiding proprietary limitations.

For modern SaaS PLM, the lesson is clear: a one-size-fits-all approach doesn’t work in the PLM space. Modern manufacturing companies, dealing with diverse workflows, require flexible solutions that can adapt to their unique environments. SaaS PLM platforms should adopt this mindset, providing open, composable architectures that allow for tailored customization and seamless integration with other enterprise systems.

Emphasizing Upgradability and Longevity

One of the challenges with traditional on-premise PLM systems is that upgrading often required costly, time-consuming efforts. Aras differentiated itself by building a system that focused on ease of upgradability. This helped customers continuously evolve their PLM systems without the pain of ‘rip and replace’ strategies common in legacy systems.

Modern SaaS PLM solutions have already taken up the mantle of automatic updates, but continuous upgradability should go beyond features. SaaS PLM needs to ensure that upgrades occur without disrupting customizations and integrations, keeping systems current while preserving business-specific workflows. This commitment to system longevity is crucial as PLM becomes an increasingly critical infrastructure for digital transformation.

Subscription-Based Pricing Models

When Aras introduced its subscription-based model, it turned the traditional PLM pricing model by surprise. Instead of large, upfront license fees, customers could access the platform through subscriptions, paying only for the value they received over time. This approach reduced the barrier to entry and aligned costs with the value the system brought to organizations.

For SaaS PLM, the subscription model is already the norm, but the key lesson here is to focus on value-based pricing. Aras focused on delivering continual improvements and demonstrated the value over time, which is something modern SaaS PLM providers can emulate by offering pricing structures that match the scale and complexity of the customer’s needs.

Fostering a Strong Community and Ecosystem

Aras built a robust community around its platform, encouraging collaboration among users, partners, and developers. By fostering this sense of community, Aras enabled a network effect, where innovations could be shared across the ecosystem, enriching the platform and expanding its functionality through third-party integrations and solutions. Many organizations were using free Aras to build prototypes, applications and even develop their own solutions.

For SaaS PLM to truly succeed, it must build a strong ecosystem of partners, developers, and customers. Modern SaaS PLM solutions need to invest in community-building, allowing for contributions from external partners to enhance the platform’s capabilities. This can also help users feel more ownership over the platform, seeing it as a growing, living tool rather than a rigid system.

A good example of online community and tools is Autodesk Platform Services and their Data Model APIs. While it is not pure PLM play, I don’t think any large PLM vendors (DS, Siemens, PTC) has something similar. Can customers develop solutions using Aras SaaS platform? It is a good question and I don’t have answers to this question.

Scalability to Support Enterprises of All Sizes

From the beginning, Aras positioned itself as a solution that can be used by companies of all sizes. A free download model didn’t limit Aras to let everyone to use it. But, within time, Aras deviated with their subscriptions to large enterprise companies with complex products. The system’s scalable architecture allowed it to serve companies of various sizes while maintaining its core functionality. This balance of supporting both global enterprises and smaller organizations was critical to Aras’ widespread success.

SaaS PLM solutions should aim to scale seamlessly, providing value for smaller organizations while supporting the intricate needs of global enterprises. The ability to scale without losing performance or functionality is essential for modern SaaS PLM, especially as mid-size companies increasingly turn to SaaS models to support their digital transformation initiatives. Ensuring scalability is key to expanding market share.

SaaS PLM Flexibility and PLM Status Quo

Everyone loves SaaS PLM for its ability to get up and running quickly. However, many SaaS PLM developers are overlooking a critical element that helped Aras break into the PLM elite. And it is a flexible data and application model. This is a pass to PLM Elite, in my view.

What about Aras Enterprise SaaS? Aras has introduced their SaaS model, which is available as a hosted solution. For SaaS model, the differentiators of Aras such as a “free download” and “upgrades” are gone. The third differentiator of Aras is a flexible application and data model. What is needed to outperform competitors like TeamcenterX, Windchill+, and 3DX?

What is my conclusion?

Modern SaaS PLM platforms need to learn from the success of Aras Innovator and Aras’ business model. However, it is important to translate the key elements of Aras success to the modern realities. Many Aras innovations are “given” and embedded in SaaS models such as upgrades and subscription. However, the flexibility of Aras platform combined with backward compliance of data model and potentially (?) applications needs to be analyzed.

Aras PLM’s success came from challenging the status quo with flexibility, community, scalability, and value-driven pricing. In the SaaS era, these principles are just as relevant—if not more so. Modern SaaS PLM platforms should learn from Aras’ playbook by focusing on flexible architectures, value-aligned pricing, strong ecosystems, and scalability.

The future of PLM is cloud-based, but to build a winning SaaS PLM solution, providers must remember that it’s not just about adopting cloud technologies—it’s about delivering flexibility, adaptability, and value over time. By adopting these lessons, SaaS PLM platforms can continue to drive innovation and meet the evolving needs of modern manufacturers.

SaaS PLM is often presented as a “simpler” option of traditional hosted platforms. This is a mistake In my view, the lessons from Aras PLM success and growth is a reminder how to bring differentiator in landscape of PLM development. By building on these insights, SaaS PLM providers can set themselves apart in a competitive market.

Just my thoughts…

Best, Oleg

Disclaimer: I’m the co-founder and CEO of OpenBOM, a digital-thread platform providing cloud-native 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.

The post What Modern SaaS PLM Developers Can Learn from Aras PLM’s Success appeared first on Beyond PLM (Product Lifecycle Management) Blog.