PLM in the Cloud: Opportunity or Threat?

February 12, 2010

Recent SolidWorks World Event brought a significant splash of discussion about cloud based applications. It is interesting to see different voices mentioned by PLM providers with regards to the growing buzz of cloud. I had chance to put bulk of blog posts on my cloud week about a year ago. For those who haven’t had chance to read them last year, you can see links below:

PLM: How to Enable your Cloud Relationship

Microsoft’s Cloud-y Future, SharePoint and PLM Collaboration

The Biggest PLM Challenge on the Cloud

Where is the PLM shortcut to the cloud?

Where is PLM on Industry Cloud Map?

However, I’d like to get back to the cloud story now and analyze what are the potential relationships of PLM and Cloud as well as figure out what I see as the opportunity for PLM cloud applications.

Computational and Storage Horses

I see a significant potential in application of cloud technologies to remove the limitation in both directions – computing power and storage. Despite the strong trend making CPU and Storage cheaper everyday, I think cloud can propose something different in this space for CAD and PLM applications. Software manufacturers need to re-think design, analyzes and simulation solutions and sees how to surf on top of potential availability of hundreds servers for the specific engineering task. The same about storage – think big, you can store whatever you need and have it accessible at any time.

Global Availability

Cloud can bring to small companies and individuals luxury of availability without limits. What was available yesterday only to the big corporations as part of WANs and other exclusive network services, can be now part of the global net in the cloud. It can change work habits of engineering companies in the way can manage their workforce, optimize supply change. Such global availability can open new markets for applications that before had limited availability to be distributed to end users.

Power of Integration

Cloud can be an opportunity for PLM companies to step into the integration process. I wrote few days ago- Do I need an invitation to CAD/PLM Cloud?. Integration of data and engineering information can be much easier when information will be available online and in more webish form. However, this is also the political issue. Today companies see integration in the very protective way. I believe influence of web and available web technologies can make shift in this area too.

Building Business Case of Cloud for PLM

And finally, what about money? How PLM companies and customers will be able to shift into new business models. What is clear for me, this is going to be a significant change. Cloud opportunity will provide cheaper resources and as a result new companies can use it as a threat for existing big vendors. The potential of new business models can be in renting and using services on demand. It can create some very interesting business cases. As a result, I can expect increased competition in the space that was heavy impacted by M&A of smaller companies by bigger vendors.

So, what is next?

I think PLM industry needs to spend some time to digest cloud revolution. Stop saying – we are doing it for years and also wait and not claim engineers as last people that will move their IP and information on cloud. I think dynamic of the next 2-3 years will be very interesting and will expose some emerging trends in cloud adoption by CAD and PLM.

Just my thoughts…
Best, Oleg

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PLM: Backward Evolution Into Lifelike 3D

February 11, 2010

Recent presentation on SolidWorks World 2010 about evolution of PLM drove me to think about what is the future of 3D and PLM in longer term. For those who haven’t had chance to see these materials, please take a look on the slide below. What we can see is the strategic move from the world of PLM to the world of (3D) Lifelike Experience


Does it mean PLM vendors is moving back to their 3D roots? Does it mean for PLM to be less involved into overall product lifecycle and processes? Maybe this move will allow better balancing between operational efficiency of ERP to manage corporate resources and combine it with the ability of PLM to manage a comprehensive set of product data?

Historically, PLM grew up from the ability to manage 2D and 3D geometry data. In the beginning, it was about CAD files. Ability to manage product data was the obvious strength of PLM in comparison to material-purchasing world of ERP. Unfortunately, PLM clashed with ERP on their interest to manage engineering product data and interest to drive processes in the organization. PLM made significant efforts to take over management of organizational processes around product design, planning, manufacturing and support. Nevertheless, “money talks” and PLM is still considered as a “step-child’ when you present this solution to CIO in comparison to ERP. In my view, by moving focus into Lifelike experience and Virtual 3D, PLM can become dominant in the overall product creation (from the requirement to material behavior) and leave ERP with operational responsibilities.

Does it mean PLM gave up? I don’t think so. In my view, move towards Lifelike experience, shows transformation from the process-focus into the end-to-end product-focus. PLM will be able to manage a complete set of product information. This is a very interesting move that can change enterprise system landscape. PLM (or 3D Lifelike Experience?) will be more focused on product engineering including all aspects of product requirement, design, manufacturing and user experience. ERP systems will be more focused on the processes and resources.

What is my conclusion? Move from PLM to advanced 3D can remove long term clash between ERP and PLM in the process management domain. ERP will expand into process management focus and PLM will be taking their position in the product engineering management with big emphasizing of 3D, Realistic Design and Manufacturing. Sounds like a rational decision to me.

Just my thoughts… What do you think about that?
Best, Oleg

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First PLM Lessons From Google Buzz

February 10, 2010

Google introduced a new product yesterday – Google Buzz. It is still very new, but I think, the message is clear. Google finally decided to step into massive social place allocated today by multiple social nets and communication tools. It is too early to say how Google Buzz will evolve in the open internet space. It is even harder to predict how Google Buzz will impact enterprise space. However, during the event, Google mentioned that they will roll out Google Buzz also to enterprise apps and will make it available inside of Google apps.

I’m sure, at the time you’ll read my post Google Buzz will be already available on your accounts. So, the simplest way, click on this link and try this out. You can watch some videos too. The following one is short and nice. I liked it.

However, I wanted to share with you some of my impressions and first “PLM lessons” from Google Buzz.

Communicate Easy
The same lesson repeatedly. People’s collaboration is all around their emails. When you try to create multiple streams by adding a new collaboration tool, you are in real danger to create frustration. Since, people are following emails much easier than other messaging systems Google decided to bring Buzz to the Gmail. I think, PLM made an enormous effort by trying to shift people’s way to collaboration from the email. Not sure this is the right thing to do.

Connect to Existing Processes
This is sort of continuation of the email story. How people can find right peers to work with? Buzz came with the simple idea – just ramp up on top of gmail accounts as a social net. Later, you can improve. PLM put huge effort on how to establish right processes and how to model processes in the organization. However, I think the missing point was about how to connect to existing processes in the organization. Since, in most of the cases, PLM comes to the existing company, they have processes set in place. To capture them is probably the most important thing to do.

Remove Walls
You can see how easy Google Buzz connects to the environment -web, pictures, twitter… What they are trying to do is to remove walls and artificial barriers in the organization. I think, this is the important lesson, PLM needs to learn. When I’m hearing voices like “who is more strategic in the organization?”, I can see huge barriers built around. Is it the right way to work in open social place?

I think, Google Buzz has a long way to go. However, this is a very interesting experience and lots of lessons to learn from how Google Buzz will be competing with existing social network giants – facebook and twitter. I will try to focus more on potential of Google Buzz in enterprise space and specifically related to PLM.

What is your opinion? Have you made your first Google Buzz steps?
Best, Oleg

PS. It is obvious to say, but Daily PLM Think Tank is coming to Google Buzz too. I will see you buzzing there :) …

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PLM, Design Quality and Cost of a Product

February 9, 2010

I want to continue the topic I started yesterday about Value Engineering and discuss how PLM can be potentially used to manage cost of a product. In my view, cost is a very sensitive and complicated topic in the organization. When PLM is normally mentioned as a tool that allows us to manage and optimize product cost, in practice I see the cost topic as pretty complicated. Before discussing what practices I can apply in PLM to manage product cost, I want briefly review product cost components.

Product Cost Elements
There are quite many cost elements. I made some diagram to figure out them below. The main total product cost combined from Direct cost and Indirect cost. The major part of direct cost is material cost. Additional components of direct cost are purchased parts, labor and tooling. Indirect cost combined from Overhead, Selling Expenses, profit and discount. Direct and Indirect costs together can be presented as a product list price.

There is additional cost classification terminologies that apply to elements I just mentioned. Manufacturing cost is  combined of variable and fixed cost. Total cost combined from manufacturing cost and selling expenses. Finally, there is the selling price combined from total cost and profit.

Product Cost, Design Cost and PLM
If we will analyze all cost elements and compare it to the design cost, we can learn that design cost is insignificant in comparison to the manufacturing cost. And this is a very important observation, in my view. On one side, design cost, itself is very small. However, on the early design stages, we have a very significant impact on manufacturing and total product cost. It means that by improving design cost, we can get significant improvements and decrease product cost. It also means, that if the company is using PLM system that allows to estimate a final cost of the product on the early design stages, it can be huge benefits and can influence overall product design and manufacturing.

What is my conclusion today? I think, cost analyzes is something that should be considered as an important part of PLM system implementation. PLM has a potential to become a system to handle all cost related data and provide total cost estimation based on current design options. From what I know, such implementation happens rarely today. My hunch is that PLM implementations and technologies today are struggling to integrate systems that responsible for the cost related information – design, ERP, requirements, supply. I’d be interested to hear what are your practices in the cost management during design phase and later? Does it seem as an important issue for you?

Just my thoughts.
Best, Oleg

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PLM and Value Engineering

February 8, 2010

This weekend I was thinking about Value Engineering and how it can be supported in Product Lifecycle Management. So, just to bring everybody on this same page – Value Engineering. Value Engineering is taking origins in General Electric in WWII and focus on systematic approach of product improvements. For me, Value Engineering is representing a very interesting problem.

The core problem of Value Engineering, as I can see it, is in the process of systematic information gathering related to product development. My short problem definition is how systematically connect product value (worth) and product costs. This is the time when I’m thinking PLM can focus on. Since PLM can connect these two in the very systematic way, it can connect “dots” of product functions in the very early design stages, manufacturing processes and consumers/end users.

So, how do you think Value Engineering is represented today in PLM. My first test is Google. Search for “Value Engineering” and PLM brings very little results. You can see them here. Your result, of course, will be local. From what I’ve seen, Aras was there in the end of the first page. However, in general, I can see, PLM is neglecting Value Engineering as a term. So, I decided to dig inside and see if does it make sense to support Value Engineering in PLM

Definition of Value Engineering
Wikipedia: Value engineering (VE) is a systematic method to improve the “value” of goods or products and services by using an examination of function. Value, as defined, is the ratio of function to cost. Value can therefore, be increased by either improving the function or reducing the cost. It is a primary tenet of value engineering that basic functions be preserved and not be reduced as a consequence of pursuing value improvements.

Value Calculation
You can calculate the value as worth of a specific product feature divided by cost of this feature development total cost. So, assuming you have all information, you can calculate the value of product you are manufacturing for your users.

Functions and Features Definition
This is something that comes very early during a product design and planning process. As every product, before you start to design it, you are facing your future customers. Based on that you can define what functions you have to put in your product. In the end of this process, you can transform your product functions into product features.

Lifecycle Cost of the Feature
When we’ve done with the initial product features definitions, we need to calculate cost of each feature. However, we need to assume total lifecycle cost including design, manufacturing, support, disposal, etc. This is a place where PLM should effectively come to play since PLM should have all lifecycle information about a product.

Worth of the feature
The most important point. You need to estimate what is the worth of each feature for customer. However, it is not a simple task. You can use historical information, get an online survey, use any other information. I have to say, that when you live in Google-era, you may have lots of alternatives to get this information than when you had before. Of course, it depends on the type of products you manufacture. You may check QFD (Quality Function Development) methodologies. I found it very practical approach. As soon as you have done with worth of the features, just go and get a balanced view of your product value.

PLM Benefits
What I think, can be ultimate PLM benefits. If you have successfully deployed PLM system, you have a good chance to have lots of information you need already in your system. If your PLM covers requirements, you need to have a functional breakdown. If you PLM is linked to manufacturing, you have a good chance for costing information to be available.

PLM Challenges
The biggest challenge, is that PLM integration with the rest of the company is somewhat that not happening in all organizations. Most of PLM systems are still focused on engineering processes and connected well to customer’s, sales, marketing and, even, manufacturing functions. However, by focusing on value engineering, we can provide additional “values” to get things done in PLM way.

What is my conclusion today? Value Engineering has obvious values and benefits for the organization. However, ability of PLM systems to manage all information is critical. What is very important is to have cost information inside of PLM. Value Engineering approach can be, in my view, used as one of the PLM strategies in the organization to solve real problems.

Just my thoughts…
Best, Oleg

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Do I Need An Invitation To Join CAD/PLM Cloud?

February 5, 2010

Last week was very cloudy in Southern California. I’m sure you understand…  I’m talking about SolidWorks World 2010 in Anaheim, CA. It was time when SolidWorks presented their technological preview and first SolidWorks PLM on the cloud (SolidWorks Product Data Sharing). However, I want to start from a very interesting twitter message I’ve got at the time SolidWorks presented.


I can understand this twitter message from Arena. Arena was the pioneering cloud PLM solutions since early 2000s. It was called OnDemand back that time.  Finally, cloud apps started to appear in the mainstream presentations of vendors like Autodesk and SolidWorks. However, read Arena’s message and blog. Arena is looking how to organize work between SolidWorks’ new cloud solution and Arena’s Bill of Material products online. And this is very interesting turn that requires future discussion and understanding.

Interoperability Tabu and Cloud Openness
This is one of the most widely discussed and prohibited topics in CAD/PLM industry. In the very competitive world, CAD and PLM companies have hard time to maintain communications, formats and data exchange to provide a solution to their customers. However, introducing of cloud can bring a new voice in the story of interoperability. Internet and cloud, obviously perceived as the most open space. It will be very interesting to see how CAD/PLM solution on cloud will develop their openness skills in the future.

How Many Clouds Do We Need?
This is the question that I had in my mind when I’m thinking about future PLM cloud solutions. What will be the communication in the cloud and between clouds? How customers using SolidWorks will be able to use Arena PLM solutions? How SolidWorks on cloud will work with apps from Salesforce.com? How multiple CAD systems on cloud can be connected to the cloud solution from PLM and ERP vendors that I’m sure will depart to the cloud universe?  Those and many other questions I have in my mind. I’m sure we are about the right time to start discussing it.

What is my conclusion today? In my view, the cloud time is coming. We will see massive introduction of first solution on the cloud from CAD and PLM vendors. However, I hope we will not create multiple “PLM clouds” in the way we created multiple CAD files and PLM Databases. I hope, we’ll find a better solution to do so. Just my thoughts…

I’m looking forward to have more cloud-related discussions with you. And I posted about cloud before. If you haven’t had chance to see them, take a look below:

Cloudy PLM: Roadmap Into The Future

PLM Architecture: Get Off My Cloud?

Where is PLM on Industry Cloud Map?

Where is the PLM shortcut to the cloud?

Should PLM take Excel to the Cloud?

Host PLM Data using Cloud Services

How will PLM applications change when they move to a cloud?

Best, Oleg

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Do We Need To Manage CAE Data in PLM?

February 4, 2010

I want to discuss CAE today. CAE is considered as a technology to support engineers in tasks such as analysis, simulation, design, manufacture, planning, diagnosis, and repair. CAE considered as a mainstream technology applied for design and manufacturing. In my view, CAE is one of the major sources of engineering information in the organization.

CAE coverage includes:

  • Stress analyzes
  • FEA
  • CDF
  • Kinematics
  • Event simulations
  • Process simulations

However, the topic I want to discuss today is an intersection of CAE and PLM. To be more specific about what system supposed to manage CAE related data? In my view, this topic is heavily missed in most of PDM and PLM systems. Most of them are completely focused on CAD models, drawings and, lately Bill of Materials. At the same time, CAE, as a massive producer of engineering information about a product is not covered. What I found that high-end CAD systems have a more dedication to this topic, but still not enough, in my view.
What are the aspects of CAE that need to be covered by PLM as a data management platform:

  • Keep references on results of calculations and analyze. It will allow to have all relevant product records in one place.
  • To support variation of product data in case of work on alternative designs, configurations, etc.
  • Keep the historical record of analyzes for audit, regulatory and solving customer’s critical situations.

I found these capabilities undervalued and will be interested to hear about your experience and opinion.

Best, Oleg

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How To Clean PLM From Complexity Disease?

February 4, 2010

This short prompt today was driven by presentation on SolidWorks World 2010. What is the evolution path of PLM? For the last time, we heard lots of statements that PLM came to the maturity point. Now customers can understand and see PLM value for businesses and for industry. However, as we can see from this chart, the next thing after PLM is “Lifelike Experience”.

Is it something that will take towards the COOL trend? On the other side, may be this will be the way to take off PLM buzzword and release the PLM business from the complexity disease?

Just my thoughts… What is your opinion?

Best, Oleg

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Faltered Licenses and Future PLM Business Models

February 3, 2010

In my view, we are observing the major disruption of enterprise software business models ever. Since yesterday’s post FREE and COOL trends in CAD/PLM I had chance to have quite many discussions with my colleagues about possible new innovative business models in product lifecycle management. I have to say, that COOL option seems something that considered as simpler one. However, FREE option is something that raising many interesting questions and opinions. In my view, the most powerful business models need to be dumb simple. Let think about that. The PLM business fundamental, as a typical enterprise business today is presented by ability to sell licenses, maintenance and services.

Licenses. These are the basics of enterprise software business – expensive licenses and focus on the business value proposition. This model worked well for many years. This is still the most used business model in the enterprises.

Maintenance. In my view, this is the first source of revenues for enterprise software vendors in the bad economy. It is obviously depending on how your customers hold back against recession, but maintenance revenues is definite pain relief for many vendors these days.

Services. The ultimate way to customize your product and support all customer needs. The relative weight of services in each industry shows, in my view, the maturity of products and adoption level for mainstream deployment.

Before talking about the possible options, I want to bring some very interesting article in UK’s Independent. You can see it here. Oracle is suing small rival providing services for Oracle customers. Without going in details, my hunch is that services become a more important component of enterprise business. Similar to what happens with IBM when they were enforced by Microsoft to re-build their business around services, we can see similar signals in the current enterprise business outfits.

So, what are possible directions in the future business models I can see?

Subscription Models
In my view, the most straightforward. You are not paying for licenses, but pay for subscriptions. The obvious advantages are to simplify user adoption and decrease upfront cost for customers. On the dark side of this model is customer’s feeling to “pay for bug fixing”, which moves customer satisfaction level down. This model is actively discovered by providers of Open Source and Free Software providers.

Reverse Models
This is something that can really improve the subscription model. Let’s make subscription model to work in reverse. In this case, customer will pay a subscription fee if software works. What will happen in case of problems? Yes, customer stops paying. Does it sound weird? Maybe, but I found similar models are working in different industries like, for example, in medical services in China.

Advertising Models
This is the most fascinating one. I think, relationships between advertising and enterprise need to be researched from the beginning in 2000s. There are several factors that will drive the future change in this space: cloud applications, subscriptions and online business. My hunch is that advertising money can be turned toward payment for enterprise software vendors and PLM’s unique potential, here is in the ability to manage complete product information including interaction with customers and suppliers during the whole product lifecycle. Yes, to prevent some comments – it may not work for all industries. However, industries like consumer products, telecommunications, high-tech, apparel has a huge potential to use it in the future.

So, what is my conclusion today? We are going to see continues disruption of enterprise software business soon. These are my thoughts. Does it make sense to you? I’m looking forward to our future discussion.

Best, Oleg

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FREE and COOL Trends in CAD/PLM

February 2, 2010

I want to propose an unusual theme for our PLM discussion. Let’s talk about trends related to manufacturing and software development. Few months ago, I prompted about “Free” as a best future price. If you haven’t chance to see this post, you can find it here. During the past years, we can see significant changes in the market about how people are looking on consuming products and software. It drove me to think about two major trends we can observe these days: FREE and COOL.

FREE Trend
I think, Free became much stronger for the past few years. Internet played a massive role to the transition of market to different variants of “Free Models”. The biggest driver, in my view, is that Internet made a lot of things available for much lower cost. It is related to the ability to provide services, long tail market, freemium business models. If I’m looking on the software market, Free trend, developed a massive awareness toward “free software”. Google as an absolute leader in providing various types of free software and services created the perception for increased availability of “software for free” and alternative business models for business software.

COOL Trend
This is another, opposite to free trend. Market of “cool stuff” is growing and manufacturers of the product and services on this market drive significant attention. People want to use cool gadgets, software and other products. Part of this “cool” trend is increased interest to the market of custom-developed products, etc. It is absolutely clear, that manufacturers of cool stuff (doesn’t matter computer devices, other products or software) are getting increased market share and exposure. What is adjusted to the “cool stuff” is also premium price for all these products. The obvious leader of “cool” trend for me is Apple .

CAD and PLM Market
Now let’s back to CAD/PLM. On one side, everything that related to CAD and 3D is obviously and absolutely COOL! The potential of 3D is huge and software manufacturers drive people to additional exposure of cool 3D stuff. When it comes to the combination with cool devices (such as Apple computers) we can see a magnification of “coolness effect”. On the other side, market of enterprise software impacted by a significant influence of free business models. “Open Source”, not efficiency of today’s software production, deployment and maintenance, high cost of custom implementations and adjustments. Enterprises are looking for alternatives to today’s business models and Free drives their attention. Enterprise PLM is definitely impacted from this trend.

So, what do think? What will be leading trend for tomorrow’s CAD/PLM? Cool or Free? If you are listening to the company like Dassault Systems, cool is a clear leader. On the other side, Aras, providing free license (or open source) drives increased attention from customers and analysts in PLM domain. What will be the final combination of cool and free? I think we are going to discover it during the next few years and this is going to be COOL and FREE show :) …

Just my thoughts. What is your opinion? Are you on the FREE or COOL side of the world?
Best, Oleg

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