COFES 2015: Product Lifecycle, Supply Chain and Data Networks

April 17, 2015

complexity-product-data-supply-chain

I had a chance to share my thoughts about complexity of product lifecycle in supply chain at COFES 2015 Design and Sustainability symposium. Manufacturing companies and software vendors are facing new enterprise reality these days – distributed environment, connected work and cloud software. On the other side we have skyrocketing complexity of products. Each product is a system these days. Think about simple activity tracking device. It is a combination of hardware, mobile application, cloud data services, big data analytics and API to work with partners. The complexity of modern luxury car is 100M line of software code. Think about product information changes in the system which is combined from engineering, customer, field support and connected devices working together.

Product data complexity is introducing new level of challenge in front of software vendors. I think it is a time for software vendors to think how to break limits of existing PLM architecture to support a level of complexity demanded by manufacturing environment and complexity of products.

So, what to do if a single database approach is dead? Federated architecture was one of the approaches PLM vendors used in the past (Actually, I think, this is probably the only one that works in production for very large enterprises). But this approach is expensive in implementation and requires too much “data pumping” between silos. Opposite to that, an experience of some companies with network based data architectures shows some promising results.

COFES 2015: Product lifecycle, supply chain and data networks from Oleg Shilovitsky

What is my conclusion? The growing complexity of manufacturing environment and products creates the demand for new product lifecycle architectures. These architectures will be able to support management of multidisciplinary product data (mechanical, electronic, software) and will operate as a global distributed data network. Just my thoughts…

Best, Oleg


Can we see CAD-PLM unicorns on a horizon?

April 16, 2015

3d-unicorn

I’m on my way to COFES 2015 – annual gathering of people discussing a future of engineering software in Scottsdale, Arizona. It made me think about an intersection of startup and engineering software world. Last year I shared my thoughts about a potential surge of CAD / PLM startups driven by new cloud technologies, web, open source and multiplied by large amount of unsolved problems in engineering software such as globalization, slow ROI, complexity and cost. So I want to continue a startup theme today.

My attention was caught by article by Dave McClure – Bubble, My Ass: Some Unicorns Might Be Overvalued, But All Dinosaurs Gonna Die. Article speaks about Unicorns – an unofficial term used to call a startup with valuation greater than $1B. According to recent WSJ article, there are 82 startup companies in the world with such valuation. You can see companies from consumer and enterprise space there. The following picture (from 2013 TechCrunch article) can show you the split:

2013-unicorns

My favorite part in Dave McClure’s article is actually related to a great summary of reasons why Dinosaurs companies are going to die – 1/ Dinosaur companies don’t innovate; 2/ Dinosaur Companies have a tough time recruiting & retaining top technical talent; 3/ Dinosaur Companies don’t get how critical internet marketing is becoming. The following passage is my favorite:

Fundamental to all of the above is the following observation: most public companies have not taken to heart how absolutely mission-critical software technology & internet marketing have become to business competitiveness. Thus, almost every Dinosaur Company is extremely vulnerable to a Startup Unicorn eating their lunch (stated so eloquently this past week by none other than JP Morgan Chase CEO Jamie Dimon).

You cannot spot engineering and manufacturing software companies in these lists. However, we can see few companies that can be associated with enterprise software business and used by manufacturing companies – Dropbox, Box, Tableu, Workday, Palantir. The largest valuation of CAD / PLM startup that was mentioned recently was $295M for Onshape – here is the Fortune article mentioning that:

Onshape, a Cambridge computer-aided design (CAD) software startup, has raised a total of $64 million in funding from New Enterprise Associates, North Bridge Venture Partners, and Commonwealth Capital. The funding values the company, which has operated stealthily for the past three years, at $295 million, including the funding.

Here is a question to think about. Can engineering and manufacturing software industry create a unicorn startup in the next decade? As a reference you can take a look on available information about market capitalization of some CAD / PLM companies – Dassault Systemes ($16.1B), Autodesk ($14B), PTC ($4.26B). But these are public companies with 20+ years of lifetime. At the same time, I’m not aware about any startup company in engineering software domain that has revenue close to $100M. According to latest CIMdata analytical researches, PLM market (which includes CAD business too) grew up 6.8% to $37.2B in 2014. Onshape is probably the only company on a horizon that (based on funding and buzz it created) can think to be a unicorn in the future. However, Onshape is still very early in the lifecycle and it is hard to predict its future trajectory.

What is my conclusion? From traditional engineering software viewpoint, it is hard to see how CAD / PLM industry can bring a new company that will be valued with $1B in coming 5-10 years. However, here is the thing…. Look on companies in the list of unicorns. Many of them made a transformation in the traditional industry landscape (transportation, hospitality, communication). That was the main reason for their premium ($B) valuation. Until now, CAD companies made CAD and PLM companies made PLM in the way we knew that for the last 15-20 years. The future might be different. Just my thoughts…

Best, Oleg

Image credit GrabCAD


Personal SWOT for PLM professionals

April 15, 2015

plm-professional-swot

Engineering and manufacturing software industry is well known by very high barrier to entry. It is related to specific professional manufacturing knowledge as well as experience with software products – CAD, PDM, PLM, etc. It is not easy to make a decision about what tools to learn and what job to accept.

I’m getting requests from people asking for advise about their professional carrier in PLM industry. The range of questions are from how get more knowledgeable about PLM and going down to more specific issues related to people, companies, opportunities, etc.

So, how to take a right decision about your path in PLM? Don’t do it spontaneous. I think some methodology can help to make a better decision. In software, we often use SWOT analysis to compare different software packages. You probably had a chance to read my blog post – Top PLM Vendors. Let’s face it – every vendor has its strength… My key takeaway – there is no good or bad PLM system. A lot of things are depending on a specific customer, problems, tools, technologies. It is a combination of things that can make a difference in PLM projects. And it requires a specific set of professional skills to make it successful.

BA Guru Matt Adams is taking the idea of SWOT to a personal level. Read his article – Personal SWOT Analysis – Where to really focus your efforts – Business Analyst Guru. This is an unusual leverage of SWOT approach. You can make your own SWOT analysis of knowledge related to engineering disciplines, best practices, engineering software. It will help you with a future PLM carrier decisions.

Below I can give you some ideas about specific PLM skills and topics you can think about when developing your personal PLM SWOT

1- Strength. Think about CAD, PDM or PLM tools you are familiar with. If you did PLM implementations, remember what you did and how did you achieve results. Summarize them in some sort of “process briefing”. List of companies you’ve been working with as an employee, consulting. List people you met in the past connected to PLM implementations and projects.

2- Weakness. Think about projects you hated. What went wrong. What was the reason for failure. Try to remember feedback you’ve got from your customers and managers. Think about bad experience with CAD and PLM software. Imagine how it can fail you in the future.

3- Opportunities. Think about how to leverage what you own in order to get into specific business, position or project. If you familiar with a specific methodology or tool, think how this knowledge or IP can be used to create a value for organization or product you can work on.

4- Threats. We are leaving in dynamic world. Things are changing fast. New methodology, software, technologies, regulations, etc. You need to keep up and learn. Think about potentially bad projects and organizations you can get involved into.

What is my conclusion? Think about your carrier as a lifecycle of your knowledge, skills and experience. You personal PLM SWOT is a summary of information about what you can do and how you can realize your skills with a future projects and opportunities. Just my thoughts…

Best, Oleg

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

 


How to sell PLM to big companies

April 14, 2015

plm-sales-meeting

PLM sales is not an easy job. PLM is usually “sold” to companies…. or actually sold to people running product development and manufacturing in these companies. I shared some of my thoughts about PLM sales in my previous posts – PLM Sales Cheat Sheet and Why hard to sell PLM ROI?

However, I want specially reference the following article – How to sell PLM to enterprise IT, which is setting a stage for my thoughts today – how software vendor is selling PLM to big companies. In my view, this is probably encounter for 99% of PLM business as of today. In most of situations, PLM software vendor, business unit or organization is selling to much larger businesses – manufacturing OEMs and suppliers.

The following article by Mark Andreesen gave me a big chunk of inspiration – The Mobi Dick theory of big companies. The article is worth reading. It helped me to identify and articulate 5 guidance principles of how to sell PLM to big companies. These are absolutely necessarily to keep in your mind if sell PLM to large OEM and just big manufacturing companies.

1. Set yourself for a very long sales cycle (months or even years).

Be extremely patient. Big companies play “hurry up and wait” all the time. It is probably going to take a lot longer to put together than you think.

2. Hire real sales people.

If doing deals with big companies is going to be a key part of your PLM business, be sure to hire a real sales pro who has done it before.

3. It is not done unless company is using PLM in production.

Never assume that a deal with a big company is closed until the ink hits the paper and/or the cash hits the company bank account.

4. Try to avoid bad deals

Selling to large companies can often require development of additional features and long pilot projects that will involve best product and technical sales people. It will suck the energy of your organization.

5. References from another big company.

Don’t sell to large OEM by referencing small tier-n supplier. It won’t work. Be aware that big companies care a lot more about what other big companies are doing than what any small company or startup are doing.

However, my absolutely favorite passage from Marc Andreesen’s post is the following one. It gives you a good picture of what will influence PLM sales decision process :

The consensus building process, trade-offs, quids pro quo, politics, rivalries, arguments, mentorships, revenge for past wrongs, turf-building, engineering groups, product managers, product marketers, sales, corporate marketing, finance, HR, legal, channels, business development, the strategy team, the international divisions, investors, Wall Street analysts, industry analysts, good press, bad press, press articles being written that you don’t know about, customers, prospects, lost sales, prospects on the fence, partners, this quarter’s sales numbers, this quarter’s margins, the bond rating, the planning meeting that happened last week, the planning meeting that got cancelled this week, bonus programs, people joining the company, people leaving the company, people getting fired by the company, people getting promoted, people getting sidelined, people getting demoted, who’s sleeping with whom, which dinner party the CEO went to last night, the guy who prepares the Powerpoint presentation for the staff meeting accidentally putting your (company) name in too small a font to be read from the back of the conference room…

What is my conclusion? Selling PLM to big company is more science than a procedure. The way current PLM paradigms and technologies are set, company is buying PLM and defining the way to manage product development processes using PLM technologies. It is painful, because this process is supposed to change the way people do business. However, in a big company you are dealing also with extreme level of organization complexity. We cannot change big companies, but we can change PLM paradigms to convert PLM sales into repeatable process. Just my thoughts…

Best, Oleg

Image courtesy of stockimages at FreeDigitalPhotos.net

 


PLM PaaS may not happen after all

April 13, 2015

PLM-PaaS-off-target

Platform is such a lovely word. Software vendors like platforms because it gives them an additional capability to partner with a community of developers. In cloud era, platform is often associated with PaaS (platform as a service). For the last few years, PaaS was mentioned as a next step in developing of cloud platforms. PaaS is often seen as a layer (together with SaaS and IaaS) in many marketing cloud slides presented by software vendors. CAD and PLM vendors are using it too.

I put some of my thoughts about PLM and PaaS earlier – Cloud PLM and PaaS dilemma. It is a difficult task to create PLM platform that can be used by other developers. In my view, none of existing cloud PLM products regardless how they call themselves cannot be qualified as PaaS. Will cloud PLM vendors develop PaaS options is a question I asked last year. I don’t think we got any good answer so far.

The usage of word platform and PaaS is often controversial as well as a definition of a platform. Meantime, the bigger world of PaaS ruled by large platform vendors (Amazon, Google and others) are going to rethink PaaS too. TechCrunch article Whatever Happened To PaaS? speaks about some interesting transformations happening with PaaS development by large cloud vendors. Companies are not rushing to provide their strong commitments to PaaS platforms. Here is the passage explaining three reasons why customers are not running towards PaaS and keep IaaS option as preferable.

App Engine’s prices drop regularly, but they’re voluminous and confusing, and a single instance — a pretty puny virtual machine — costs more than a dollar day, not counting storage or bandwidth. Same for Heroku. You get more bang-per-buck by simply buying and running your own servers. You also get enormously larger headaches, and significantly slower development time; but that tradeoff isn’t worth it for many

Then there’s lock-in. Once you build your app atop App Engine’s custom APIs, you’re committed; there’s no easy way to back away and go to another provider. The lock-in is less for other PaaS providers, but it’s still there. There is no universal PaaS equivalent of de facto IaaS (infrastructure-as-a-service) standards such as OpenStack or Docker.

The third, least valid, and arguably most powerful reason is culture. Companies don’t want to give up perceived control over their systems–even if that control is never worth its associated complexity–and sysadmins, understandably, don’t want to evolve themselves out of a job.

In my view, it explains well why PLM PaaS idea may be dead on arrival. The only reason for partners and developers to use platform is cost and speed. If I can spin a new server in minutes and develop my own cloud application, why I should bother with using of PLM PaaS. The potential reason could be data access and interoperability. But it will come down fast to customer lock-in. Openness and interoperability is a big issue in engineering world. Engineers and manufacturing companies don’t like to be locked on a specific software. Even PLM PaaS will provide an attractive set of functionality, I hardly can see how developers of vertical applications and solutions will lock themselves on a specific PaaS and won’t keep an option to provide this solution for other platform and vendors.

What is my conclusion? For the moment, PaaS looks more like a marketing buzzworld used by PLM and CAD vendors. I think vendors will take time to understand what means to deliver cloud platform that will be robust enough not to break under the complexity of multiple vendor dependencies, long development and usage lifecycle and technological innovation. So, PLM PaaS is not here yet and may not happen after all. This is a not for PLM architects to watch technological trends of large vendors and think how to develop future PLM platforms. Just my thoughts…

Best, Oleg

Image courtesy of Stuart Miles at FreeDigitalPhotos.net


Why 2015 will be the year for PLM to rethink cloud?

April 10, 2015

plm-rethink-cloud

I’m coming to COFES 2015 next week, which will take place in Scottsdale, Arizona. PLM and the cloud is one of the topic I’m planing to discuss during the analyst and user briefing sessions. I’ve been thinking to beat a schedule and share some of my thoughts on blog before to spark a conversation.

The last few years have been building some foundation for PLM and cloud. It is certainly became more mature from every standpoint – to understand cloud value proposition, try different business models, discover partnerships and build possible roadmaps for the future. It is different from what we had back in 2010. Cloud is pretty much everywhere these days. Vendors and customers are not asking a question if they need to focus on the cloud, but more about how to do that from different standpoints. Vendors are considering different technologies and ways to build their product differentiations.

The next web article Why 2015 will be the year that the cloud comes of age caught my attention few days ago. I liked a very precise definition of cloud characteristics: self-provision, elastic scale and pay per use. The real cloud solutions are leveraging that part of cloud technologies. Products like Arena and Autodesk PLM360 are probably best examples here. At the same time, it is not clear to me how other PLM vendors are going to fit that definition with technologies and strategies that more aligned with hosting of existing PLM platforms using IaaS platforms or specific hosting providers. You can take a look on my post about where to host cloud PLM.

My favorite passage from the article is related to the ability of cloud technologies to level the playing fields between enterprise giants and small ventures. Here is the passage I specially liked:

“Before the cloud, companies implemented new software and technology in a relatively traditional way through structured, company-wide deployments,” explains John Brennan, head of business development at international communications firm BT. What the cloud brings to the table is versatility that allows end users to invest in the exact resources that they need — no more and no less. Companies can switch over to lightweight, cloud-based deployments that require little in the way of on-premise configuration and management.

Lightweight, cloud based deployment is a key. This is where companies can deliver differentiations. This is where most of PLM vendors can see cloud advantages – to remove IT burden and to lower upfront implementation cost for PLM.

However, expensive IT and on-premise installation is only part of PLM deployment problem. Another part is related actually to the way PLM system is implemented, how it can streamline product development processes. In my view, this is related to a second point mentioned in the article – information exchange.

Today’s top technologies — and human-to-human communications protocols — are dependent on APIs. Thanks to very simple programming, applications can connect to support the swift and efficient flow of information ranging from product SKUs to media buys, CRM data, and credit card transaction details. “Cloud based APIs and microservices simplify information exchange,” says Chris Hoover, global vice president of product and marketing strategy at Perforce Software. “It lowers the barrier for new vendors to enter the market.” The result, according to Hoover, is a trend in which enterprise companies are moving away from a ‘top down’ approach to software and information exchanges.

This is a place where PLM systems are not aligned with a cloud. Few modern cloud based APIs are exposing REST API. However, most of PLM platforms, even hosted in the cloud, still provide only old fashion API frameworks. The level of openness and the way implementations need to be done in an organization is still the same for cloud and non-cloud systems. It is a lengthy process, which requires clarification of requirements and alignment with the organization.

What is my conclusion? PLM industry did a great first step by moving into cloud. Customers are actively engaging with vendors trying to understand cloud technologies and business models advantages. However, implementations are still very painful. So, how to change existing PLM implementation paradigm and make PLM implementations granular and painless. The question is on the table. Whoever, will be able to crack it, has a chance to win a future differentiation game in PLM. Just my thoughts…

Best, Oleg

Image courtesy of renjith krishnan at FreeDigitalPhotos.net


Why Slack can be a communication tool engineers want?

April 9, 2015

slack-image

Communication is an important element of our work. We live in an extremely connected world. To communicate with people you work on the same team and between teams can be a critical factor to make project successful. I’ve been learning Slack for the last few weeks. Slack is online communication platform that is catching lot of attention for the last time. It is a startup with more than $1B valuation. Take a look on it over the weekend. It is polished and provides very slick UI.

https://www.youtube.com/watch?v=B6zVzWU95Sw

My experience with Slack made me think about collaboration in engineering teams. It has some connection to old discussions about “social PLM”. However, social PLM idea was doomed. I can mention few reasons why it happened – it provided bad experience for communication, it wasn’t open and didn’t provide an easy way to publish data.

slack-integrations

Things changed for the last few years, Engineering software is getting better in terms of user experience, but openness and integration are two things that not changing much. Look over collaboration tools provided by PLM vendors and you will see limited number of integration capabilities. It is still very closed world, it is hard to push data in and out. Moreover, it is very difficult to integrate with tools engineers are using these days.

Opposite to that Slack impressed me with the number of integrations and openness. If you think about online digital environment, it basically integrates with everything. Navigate to the following link and take a look on a number of integrations. However, community-built integrations list is every more impressive. It is basically integrates to any language, framework or too.

What is my conclusion? There is a clear need for engineers to communicate. However, think how many social platforms do we need? My hunch- we don’t need many. But we need one… a good one. We need one for engineers to communicate between themselves and outside world. So, the competition for this single communication tool will be tough. In my view, integration will be one of the most critical elements. Imagine great communication and collaboration platform that hard to integrate with. It will fail exactly in the same way as previous “social PLM” initiatives failed. So, there is a chance engineers will like Slack. This is a lesson to learn for PLM vendors. Just my thoughts…

Best, Oleg


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