PLM Cost and Enterprisey Clouds

PLM is a costly piece of software. Software licenses, installation, implementation, support, services. All these components of PLM software make the decision of manufacturing companies to adopt PLM software questionable. In the past, out-of-the-box solutions promised by software vendors claimed to decrease PLM software TCO. However, it was only a promise. These days "cloud" perceived as something that can make this change. If you listened to Autodesk Buzz Kross recently, you probably noticed the following passage from Autodesk Nexus 360 announcement:

"Our approach to PLM is a sharp contrast to the decades old technology in the market today," said Robert "Buzz" Kross, senior vice president, Manufacturing Industry Group at Autodesk. "Autodesk 360 for PLM will enable customers of all sizes to achieve the full promise of PLM with a scalable, configurable and intuitive solution.

The following slide presented a month ago during AU 2011 shows that Autodesk approach is to provide much more affordable PLM solution.

Cloud and IT’s bluff

I was reading blog article by David Linthicum. One of the topics discussed there was related to efforts made by cloud providers to provide solutions acceptable by enterprise companies. The questions of security and data replications are probably on the top of the list by many providers. One of the solutions mentioned was Google’s high availability data replication (so-called high-Replication Datastore). At the same time, according to David, introducing multiple "enterprisey" features can remove a potential to provide affordable enterprise-cloud solutions. Here is the passage:

The problem I have with this process is that much of what’s valuable in the world of cloud computing is the simplicity and cost advantage — which is quickly going away as cloud providers pile on features. The good news is that enterprises won’t have an excuse not to move to cloud computing, and adoption will accelerate in 2012 and 2013. However, as cloud offerings appear to be more and more like enterprise software, the core cost advantage of cloud computing could be eroding.

What is my conclusion? The key to make cloud solution cost effective is to keep the right balance between enterprise IT requirements and capabilities of cloud-based software. Some of these "enterprisey" cloud requirements are reasonable, and some of them are typical "red-herring". We are going to watch the process of balance finding in the next few years. Just my thoughts…

Best, Oleg

Image: scottchan / FreeDigitalPhotos.net

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2 Responses to PLM Cost and Enterprisey Clouds

  1. rory says:

    Oleg,

    As move to our second generation of cloud solutions, we struggled with balancing simplicity and a traditional just throw in the kitchen sink syndrome. As we worked with customers, we found that most of our cloud business processes were largely isolated or granular. By not attempting to completely intergrate these granular processes into PLM or ERP, the processes were very simple and effective. At the point the business object was approved, we published into PLM and several enterprise applications. In several of our blogs, you have mentioned the concept of granularity. While some traditional application companies may overload their cloud solutions, customers will prefer more loosely coupled and granular business processes. You can continue to add additional business while staying true to the value of cloud based solutions.

    rory

  2. Rory, Thanks for commenting. What you are saying make sense – granularity. However, I’d be interested to hear more examples about how you developed the isolation. Actually, in many situations, accesses to data in other systems are essential in order to run processes. Can you bring some real-life examples, please? Best, Oleg

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