PLM Open Source Tradeoff

I’m continuing to hear comments about importance of Open Source for PLM. It comes to me multiple ways during the last year, and I have to say that the overall knowledge about what means Open Source in various aspects related to software code, different type of licenses, customer communities. I think that PLM Open Source industry conversion is growing. Today, I want to figure out what is a potential tradeoff in Open Source PLM implementation. In my view, if a customer is thinking about Open Source, he needs to make a potential tradeoff in the context of the following three aspects: Business, Community and Technology.

The Business
Every manufacturing company is thinking in terms of their core business. What are the areas of innovation and how they can develop their market competitive advantages? Product Lifecycle Management has a direct impact on the development of company competence via providing services and tools to develop products, provide service and optimize engineering and manufacturing processes. For many years, making business with IBM was considered as a safe business decision. As soon as you put your core development processes into IBM safe deposit box, you will be ok. In my view, it is a still right way. And if you company is ready to pay a premium price for making business with IBM-like providers you can do it. However, you will need to play according to the IBM (and other rules). In every business, you have multiple risks and to choose how to manage them is your own choice. Your tradeoff with Open Source PLM is to choose a more vulnerable solution. You are taking definite risk stepping into this pathway. Even so, you can find appropriated options to compensate your risks by hiring more knowledgeable team or paying subscriptions. This is your choice, of course.

The Community
This is a very interesting aspect. In general you can consider a community contribution as a tax. Do you like taxes? This is a very good question :). My answer is – it is depending on how it will be used. If I think about old days standard creation communities presented sponsored by vendor and targeted to produce sort of a common denominator between different vendors. Nowadays, we can see a significant change in the way community can be created, valued and in the end monetized. To be a member of a community today means to have the most trusted relationships and information about what is going on. The common opinion of community members (vendors, customers, industry professionals) can have a different level of trust in comparison to the opinion of a single vendor. When you work with a specific vendor you can think in terms of committed relationships. This is an important for business and provide definite value. However, you can exchange this value and have a community opinion about what is trusted way to implement PLM that will be proven by community members. You won’t be able to convert to the legal terms, so it will be your decision in the end. So, this is another tradeoff, in my view.

The Technology
I had chance to write some topics about innovation and PLM technologies before. The technology is certainly matters, and you want to use the best one to help you to develop innovative products. I think all PLM vendors these days have an impressive technological development. You can choose the best one for you and use it. The importance of this option should not be underestimated. This is still the most straightforward way to use technological development in production. On the contrary, I can say that technology innovation of well established software companies is following a particular pattern driven by multiple customer, business and product commitments. So, you are paying tax to have a committed technological roadmap. However, what if you want to have a risky business decision to drop this commitment in exchange of being involved into the community of technological and product innovation. This is a tradeoff. However, it may pay off by getting an access to something that well balanced and diversified due to community involvement.

Here is my simple take on PLM open source. I’m trying to think about industry and not about a specific vendor. Most of the debates I’m hearing about PLM open source is too focusing on a comparison between PLM software that coming from mindshare PLM leaders and Aras PLM. I think this is a wrong focus. In my view, we need to be more focused on customers and benefits of the industry. I certainly see lots of customers that will not have benefits from open source. However, I see many customers that can consider open source tradeoff as an appropriated way and will try to get a value from open source and an ability to build a wide community of customers related to PLM implementations.

Just my thoughts and the decision is yours.
Best, Oleg

About these ads

8 Responses to PLM Open Source Tradeoff

  1. Oleg,

    Interesting thoughts, but I believe this topic is much bigger than a PLM topic.

    I’m old enough to remember when the safest decision in computing was IBM, and it truly was the best decision. They had great technology, very loyal employees who provided excellent customer service, and IBM made long-term comittments to their customers that spanned decades.

    I can also remember when new engineering graduates would start work at a company, and spend their entire (happy) careers at this one company.

    But the situation has changed. Maybe it is because of the short-term pressures of the stock market, or the internet, or who-knows-what. Anyway, it’s kind of sad.

    I think you are attributing too many positive attributes to large companies, that just are not true anymore:
    ** Customer service has been outsourced to increase profits
    ** Manufacturing has been outsourced and the cheapest possible materials used to increase profits
    ** Design has been outsourced to increase profits
    ** Long term job prospects and job satisfaction have been compromised by constant cost cutting

    I think the discussion should not be about open source versus proprietary software company. This might be a large software vendor versus small software vendor discussion. Which company is most innovative? Which one will provide best customer support? Which company’s employees are most committed to being and doing the best?
    I believe these best attributes are now found in the smaller companies. Or maybe it’s the private companies versus public companies? What do you think?

    I’ve spoken with many PLM users at conferences over the last decade, and there is a very clear message that they are disappointed in the PLM vendors. Customers make expensive investments in specific products, and then those products or platforms are cancelled. They make expensive investments in consulting, but the implementation projects never get completed. Years later, and most end-users have barely got CAD file management working properly. The vision of what PLM could be, has never been realized. The vision wasn’t wrong, it just was poorly executed, by these same big software companies that you hold up as the “safe” option.

    So I clearly disagree that the large vendors represent a “safer” or even “better” solution.

    Is Open Source the answer? My bet is yes. A business relationship in which the customer only pays for success is bound to drive better results.

  2. Evan Yares says:

    Open Source is an answer. But what is the question?

    “Users,” whether you construe them as companies or the individuals who work at those companies, just want to make their processes work better, and get a little work done. Preferably without a lot of risk.

    For this simple need a bunch of vendors offer a “solution” (consisting, it appears, of software, services, and promises) which they call PLM.

    Suppose a user asks a vendor “so, what is it that you’re really offering?” You (and the other PLM vendors), say “Well… we won’t tell you that. It’s kind of a black box you can’t look inside of. But here’s what it looks like from the outside, and here are the things you can do with it…”

    This is sort of like trying to buy a car, and having the manufacturer tell you that you can’t look under the hood — because what’s under there is a trade secret.

    The Open Source PLM vendors have a different answer. To draw an analogy, if they were car manufactures, they’d say, “Feel free to look under the hood, or even take the car apart. In fact, we’ll give you all the prints for the car. And we’ll give you the car for free.”

    The enterprise open source model is a pretty honest approach to business. It recognizes that few customers are going to want to poke around “under the hood,” but that having the option to do so helps them mitigate risk. Since the vendor only gets paid only for maintenance and services, they are highly motivated to perform. If they don’t, the customer can find someone who will, without having to start from scratch. In short, enterprise open source creates a balanced trust relationship between the parties.

    Yet, not all PLM vendors are in the position to offer their software as open source. Dassault, for example, has a very significant investment in its direct sales channel. An open source business model can’t generally support that sort of overhead (Indeed, Aras, as a part of going to open source, fired their direct salespeople.)

    Let me go back to my car analogy. Suppose a car manufacturer told its customers that it wasn’t going to give then all the prints for the car, nor would it give them the car for free, but it would let the customer look under the hood, and would also provide all of the interface specs needed to “bolt on” after-market parts? (Turns out, this is exactly what car manufacturers do.)

    In the software context, the equivalent to this is “open interoperability”: publishing a product’s API and data file format specifications. (Or, alternatively, providing open source file format read/write/view libraries.)

    From a customer’s perspective, open source and open interoperability provide the same benefit: risk mitigation.

    Sadly, for users at least, companies that are trying to protect their “walled gardens” (including major PLM software vendors) are no more likely to embrace open interoperability than they are likely to embrace open source.

    So, what is the trade-off, for customers, between open source and closed source PLM? It is apparently the choice between an small vendor who acts in a trustworthy manner, versus a large vendor who says it’s trustworthy, but doesn’t do what it takes to show it.

  3. [...] PLM Open Source Tradeoff « Daily PLM Think Tank Blog [...]

  4. Peter, Thanks for your comments! My focus on a positive side of big vendors and large companies is because, I believe, the change in PLM is going very slow. Despite all facts, you figured out (and you are right btw), there are still lots of companies that making their decision alongside with strategies of big vendors. The biggest problem here is a huge (!) internal investment customers are doing when implementing PLM. They cannot replace it tomorrow in the same way we are replacing cell-phone. So, I wanted to figure out what are “points of thinking” customer need to make in order to come closer to the decision of open source vs. traditional software. When customers will be able to do it, their decision will be focused on innovation, better support, employee’s commitment, etc. Best, Oleg

  5. Evan, The question is how to manage “risks”. As you said, customer really wants it down. I love your car example, thanks! Actually, I’d like to continue it… Few people really want to open a car hood. However, you want to mitigate risks and have an option to open car hood. In this case, somebody from no-original-car-cheaper-service-provider can do the same work for half price. Or, if you are really specialist, you can do it by yourself. So, in my view, potential users can learn open source tradeoffs and decide what type of relationships with a vendor they want to have. On the opposite side, vendors, need to see how to make community support and development for FOSS. This is sort of balance I can imaging. Thanks for commenting! Best, Oleg

  6. MarcL says:

    The point of the tradeoff being made is “risk” and how to reduce it… this begs the fundamental question “what risk(s) are being reduced?”

    Is there more risk when you pay $1,000,000 – $5,000,000 for PLM licenses up-front before you have installed the system and have no idea if it will even work – or – when you can prove the PLM system out, validate functionality and ensure it will work for your specific requirements without any financial commitment?

    Is there more risk dealing with a large PLM company that forces a never ending series of expensive upgrades by end of life’ing the products your company relies on (i.e. Pro/Interlink, Smarteam, MatrixOne, Teamcenter Enterprise, Teamcenter Engineering, Agile Eigner e6, Agile Advantage, etc, etc, etc…) – or – dealing with a smaller high growth company that is committed to customer satisfaction through PLM solution excellence on a single open product?

    Is there more risk in attempting to implement the unproven next version of the major PLM vendor’s product at a substantial cost $$$$$$$$ when your company has just spent the last 5 years trying unsuccessfully to implement the previous version of that PLM vendor’s product (when they told you it would only take 6-9 months) – or – would your company reduce the deployment risk level by doing an open source PLM pilot to test and validate before hand?

    Is there more risk in committing to a PLM system which is increasingly closed, proprietary and complex where your company’s global competitiveness is held hostage by people that have no motivation, alignment or connection to your business – or – work with a PLM solution that is open and gives your company complete control over your own data and destiny?

    These are fundamental business questions that revolve around “risk”. Risk takes many forms and I submit that the current status of the PLM industry the “Risks” of dealing with a LARGE arrogant vendor are far greater than dealing with an emerging vendor with an OPEN SOURCE product (such as Aras).

    That’s just my perspective… and I suggest that anyone reading this take it with a grain of salt because I work at Aras (an open source PLM provider)… don’t listen to me or anyone else, find out for yourself; test & experiment with open source PLM, validate before you draw conclusions… that’s what engineers do, that’s how they know for sure.

    MarcL

    http://www.aras.com

  7. Marc, Thanks for your insight. I agree – for most of the business is about risk management. Therefore, IBM was so successful. You pay a lot, but you minimize your risks. The question of IBM rule of thumb decision is going to change in PLM world. One of the key questions I’d ask here is cost of change. The systems we are talking about are very complex and expensive. Nevertheless, companies are keeping going with existing systems because change is even more expensive than migration to the next version of the existing product. It explains why lots of old systems are still in production. The cost of change implies you are going to pay for old system and cost of change. I think to say “licenses are free” is not enough. So, my take is FOSS provide an opportunity. However, the realization of this opportunity in terms of changes is even more important. Just my thoughts… Best, Oleg

  8. Prada bags says:

    Prada bags…

    [...]PLM Open Source Tradeoff « Daily PLM Think Tank Blog[...]…

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.

Join 252 other followers

%d bloggers like this: