Will CFO like “cloud PLM”?

Cost is one of the aspects all cloud PLM providers bring to the table these days. The demand and the expection is that that PLM (or any other software) on the cloud will become cheaper than on-premises’ alternative.

Earlier this week, I’ve been reading an article from CIO magazine –Why CFO and Cloud Computing Have a Love-Hate Relationships. The article is worth reading. Author is talking about different aspects on how CFO in a company perceive advantages and disadvantages of cloud solutions. According to the author, there is no confirmation about cost-competitiveness of AWS. Here is an interesting passage, in my view:

The author evaluated the historical price changes in AWS S3 storage vs. on-premises, disk-based storage and concluded that AWS isn’t cost competitive. Moreover, he asserted that AWS storage isn’t realizing (or at least, isn’t passing on) the benefits of Moore’s Law, since its prices aren’t dropping as rapidly as on-premises storage pricing.

Later in the article author discussing "love" and "hate" aspects of cloud computing from the standpoint of CFO. The basis of resource consumption is related to the most "hated" behavior. On the side of "love" is clearly the ability of the cloud to turn your company capital investment into something that will be considered as "pay-as-you-go-service".

I wanted to bring some examples of Cloud PLM cost. Today, I can see it mostly around two companies and products –Arena Solutions and Autodesk PLM 360. Arena is a long-time player for OnDemand, SaaS and cloud PLM. It wasn’t simple to find pricing page for Arena PLM on their website. Finally, I found it. Here is the link. You can start with Arena at 79 per-user per-month. In addition to that you have a menu to get a quote.

At the end of the last year I took my first attempt to discuss it. Navigate to my post – PLM, Cost and Enterprisey Clouds. The example of PLM cloud deployment for 200 people presented at AU2012 stated 10x difference between so-called "Traditional PLM" and Autodesk.

The new version presented during Autodesk Media Summit two weeks ago presented even bigger distance between traditional PLM and Cloud PLM.

What is my conclusion? The best interest of cloud providers is to set up and an aggressive pricing strategy. As we all know from the public web, the usage is the first important thing towards winning a competition battle online. In my view, actual usage is clearly missed today for Autodesk PLM 360. Arena is probably operating with some historical examples, but I have never seen them published. I also don’t expect vendors to share cost structure publicly. The absence of examples and pricing reflecting "consumption rates" for storage or computing resources hints to the fact that cloud PLM is still far from maturity. So, I can see everything that happens now as very interesting and promising experiments that clearly can make CFO happy in the cloudy PLM future. The jury is still out…

Best, Oleg

7 Responses to Will CFO like “cloud PLM”?

  1. Oleg – In my dealing with some CIO and CFO types, the idea of an SOA architecture is ideal, so long as it’s private (at the data center). I think as a culture we still see risk in placing our corporate IP on the cloud, although it could be argued that a lot of corporate IP is already being distributed to supply chain and customers via Google Docs, DropBox, YouSendIt, etc. I think this is an emotional response, the things you’ve brought up are certainly the objective software thinking. My two cents.

  2. Michael, I think you answered on your question. There are lots of corporate IP already in the cloud. Some of the companies will adopt faster, and some of them will prefer “private cloud”. However, it will be coming – sooner than later. Thanks for commenting! Best, Oleg

  3. Jos Voskuil says:

    I see a risk when the CFO starts to be involved in the PLM selection process. The current clould PLM offerings are not comparable with ‘classic’ PLM offerings.

    PLM is for me a business strategy (in my upcoming post I will address also the misconception that PLM = PLM ) – Most pains from the past come from the fact that PLM was introduced as an IT strategy

  4. Jos, PLM is both- technology and strategy. I think to take one of the sides is equally dangerous. Part of PLM strategy is to choose the right technology with the right cost. This is a very critical moment. Just my thoughts… Best, Oleg

  5. Jos Voskuil says:

    I agree it is both technology and strategy. But strategy should lead and not sometime the focus on certain IT-standards. I do not believe technology is the crictical differentiator in a PLM selection process, there is so much more to gain first in changing the business

  6. clieu says:

    Hi Oleg,
    Please see the updated pricing page for Arena — they have made it easier to find and hopefully clearer as well!


  7. clieu, Thanks for sharing! oleg

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