Will ERP be on cloud ahead of PLM?

July 31, 2012

What do you think about PLM vs. ERP competition? Err… Good question, right? In my view, PLM sales people are long time jealous about ERP sales success. The mainstream adoption, CxO focus, the amount of money organizations are spending on ERP and many other factors. PLM companies felt like a step child in front of ERP success. I have to say, situation changed a bit for last 3-5 years. The adoption of PLM is growing enterprise companies more often mention PLM as a strategic investment. Nevertheless, the question of the potential overlaps between PLM and ERP functionality is not unusual when it comes to discussions about Bill of Material, Manufacturing planning, Supply Chain and some others.

Cloud is trending these days. I’m following many discussions about cloud, enterprise software and cloud PLM, specifically. The topic is still very far the consensus. Opinions go sometimes in opposite directions from total adoption of cloud computing and cloud enterprise systems and up to significant concerns about security, performance, licenses and availability. Nevertheless, “cloud” made me think about “what if…”, PLM software can use cloud as “a secret weapon” to outperform ERP companies?

Thinking about that yesterday, I stumbled on the following blog post from CloudAve – Cloud ERP Starts to Break Out–NetSuite Reports Good Numbers. The article speaks about NetSuite. For many people NetSuite doesn’t say much. I’ve been following NetSuite cloud product offering for the last few years and find it very interesting. CloudAve article shed some lights to NetSuite financial performance. Here is what I learned first:

  • Subscription and support revenue was $61.0 million, a 27 percent increase on an annual basis
  • Cash flows from operations were $15.2 million, up by 80 percent from Q2 2011

The increase of subscription for 27 percent sounds to me like a very healthy performance. Remember, we are talking about cloud systems where subscription is the main source of revenues. Article also hints that such a good performance of NetSuite can be a foundation for a future acquisition by Oracle and confrontation with SAP. Here is the passage:

With NetSuite reporting such good numbers, and its success in moving up the food chain, even more credence is given to the “two-tier ERP” notion it’s been evangelizing. I’ve long said that it was only a matter of time before Oracle swoops in to acquire the company (especially so given the fact that Larry Ellison is the biggest shareholder already) and more tightly integrates it in with core Oracle offerings. The acquisition of SuccessFactors by SAP and the corresponding disruption it brings have brought both oracle and NetSuite some breathing room. I suspect however that new SAP Cloud Tzar Lars Dalgaard is working hard on a credible two tier and cloud plan and oracle and NetSuite need to plan for when this comes to fruition.

What is my conclusion? In my view, the jury is still out to judge cloud enterprise offering. Even such companies like Salesforce.com can be considered as well-know leaders of cloud enterprise systems, the coverage of ERP and PLM offering using cloud systems is still very low. Will PLM company miss an opportunity again and lost cloud battle to ERP giants? This is a very valid and important question to ask.

Best, Oleg

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PLM Supply Chain – Go Big Data or Go Home

July 30, 2012

For many people PLM is associated with Engineering. At the same time, it is not true. Very often, major portion of product design, development and manufacturing is delivered by partners (suppliers). Value chain management, supplier integration during different phases of a product-development process is very important. These days with growing trends in globalization and interest of companies to optimize and product cost, it became even more important than usual.

Many companies are looking how to innovate in product development. I’d like to talk about an interesting trend in supply chain optimization related to Big Data. In information technology, big data is still very loosely defined term. The following report caught my attention few days ago – ‘Big Data – Go Big or Go Home’ by Lora Cecere of Supply Chain Insights. I downloaded Big Data report via this link. Report is talking about Big Data as a new concept in Supply Chain. I recommend you to read this report. I found it quite insightful. It made me think about many problems in a supply chain PLM systems are trying to solve.

I captured few interesting passages. One of them is about solving business problems. Very often, I can see PLM vendors are talking too much about technological pieces related to data exchange between OEM and suppliers. At the same time, companies are losing focus of business problems.

For the business leader, it is not about data. It is about solving the business problem. In fact, as supply chain leaders try to tackle new problems, most do not realize that they are entering into the world of Big Data, it just happens. The term is not in their vocabulary. They just want to do more, and solve new problems, with new forms of data. They are frustrated with current systems.

At the same time, we need to admit that data is growing exponentially in the enterprise and global value chain. Here is another interesting passage highlighting the scale of data growth:

Data is Growing in the Enterprise. Today, 8% of respondents have a Petabyte of data in a single database. It is growing. It is a concern of survey respondents. 47% of companies responding to the survey either have or expect to have a database with a petabyte of data in the future. It is higher for those currently having Big Data initiatives underway (68%). The petabyte is the new terabyte.

Until now, I can see how PLM vendors are mostly focusing on "transactional data". Nowadays, a lot of additional data sources are coming into play of product development and supply chain. Take a look on the picture I captured form the same report – transactional data is only small piece of information need to be used to optimize supply chain.

Another interesting aspect is the relation between supply chain and product data. Analyzing the ability of a company to use various data sources for supply chain, we can see "product data traceability" as one of the top 3 factors. It leads me directly to the data located in PLM and other engineering systems.

What is my conclusion? Big data is one of the big things PLM can use to optimize supply chain, in my view. PLM vendors need to switch gears from supply data exchange towards supply chain optimization. In order to do so, PLM vendors need to bring additional capabilities to analyze supply chain, related information. It is an important topic to for coming years. Just my thoughts…

Best, Oleg

Image: FreeDigitalPhotos.net

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PLM Think Tank – July Top 5

July 29, 2012

Usually, we expect some relaxation during summer time. Even we are still in end of July, this summer already provided lots of events, news and surprises. Last week was dominated by news about financial activities of Dassault Systems and PTC. Week before was marked by Autodesk acquiring SocialCam for 60 million dollars. I can see lots of activity and innovation happen in engineering and manufacturing software. One of these innovations is introduction of modern browser techniques to the space of CAD and Viewer collaborations. Companies like Sunglass.io and GrabCADannounced their viewing capabilities available. I will continue to monitor the industry from "beyond PLM" viewpoint and share this news with you. Now, let me move to the traditional top 5 stories.

What is the future of PLM databases?

Database technology is a fundamental part of everything in enterprise software. However, after 25 years I can see some changes demanded. The complexity of product lifecycle problems brings the need of new concepts in data modeling and data management. One of the main questions – how to break the boundary of a single database? This is a key question, in my view. It will solve the problem of logical scalability and provide a platform for future information discovery.

Why Engineers don’t like company private social networks?

In my view, Facebook IPO put some cold water on some ‘social heads’. I think, PLM companies are missing some points in the space of social networking for enterprise. Here is my list of suspects – complicated user experience created by social PLM pioneers, anti-social engineering nature, engineer’s focus on “cool stuff” and ignorance of corporate oriented tools.
Co-browsing and future of CAD design collaboration

Collaboration in design is endless topic for innovation. I think the idea of collaborative browsing can “hold the water”. How many times you worked with shared screen on your computer? I did it many times. To have multiple engineers working on the same design can be an interesting option in your future CAD application in the browser.

"Alte-Zachen" PLM and new business models

In my previous life, ‘Alte Zachen’ person was taking old stuff away. I never knew what happens to this stuff after. The same about “second hand” PLM software. What will be the value of re-selling and buying existing licenses? I can some interesting work for lawyers to be done in this space. The main personage of “Pretty Woman” movie was buying companies having financial troubles and sell them apart for a significant profit. Will future PLM innovators buy existing PLM alte zachen for their future profit? A good question to ask… Just my thoughts.

PLM Dress Code Factoids

The dress code of PLM events is different from CAD and consumer events. Few people in PLM industry are still dreaming about how to follow ERP success. PLM companies and event organizers are dreaming about how to bring more executives to their events. They are key players in PLM strategic decision making. Dress code is part of the agenda to make PLM event comfortable for execs. I guess CIOs and other corporate execs feel wrong sitting next to engineers in blue jeans. I also believe some country and location specifics can be considered too. I rarely see suits and ties during events in Israel and California. At the same time, it looks quite appropriate in Germany and some other places in Europe.

Best, Oleg

Image: FreeDigitalPhotos.net

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PLM? Whatever Dude… Just Get Access to Data.

July 27, 2012

The discussion around SolidSmack’s article PLM Should Be Like Google. Really? is heating up. My PLM blogging buddy and well-known analyst Chad Jackson of Lifecycle Insights just published his view on the topic. Navigate to the followinglink to read – PLM is Just Data Management… Whatever Dude? Well, when Chad gave me such a great softball, I could not resist. I decided to put some of my thoughts about the topic related to Data Access.

PLM vs. PDM debates

The discussion around troubled TLA – I can hear more and more voices with questions about "what is PLM"? My short answer – PLM disruption. Check my earlier post PLM Perfect Storm 2012. The disruption in PLM is driven by the following drivers – cloud, new business models, open source. In my view, the main topic debated among PLM vendors and industry watchers these days is how to get to the next level of adoption. Expansion towards industry segments, approaching SMB customers with cloud solution, mobile, consumerization and green field – all these trends are signs of next PLM wave.

Last year, I presented the following slide during Eurostep 2011 conference. I think "data perspective" is important when we speak about PLM and PDM these days.

PLM vs. PDM

Why Data Access is Important?

We are creating a huge amount of data these days. The discussion about big data and growth of global data is just in the beginning. According to IDC, data volumes will grow 44x times from 2009 to 2020 to 35zB. I tried to find some numbers about data growth inside of enterprises and found the following chart interesting – Data Growth Trends (Chute, Manfrediz, Minton, Reinsel, Schlichting, & Toncheva, 2008):

Data Growth Trends (Chute, Manfrediz, Minton, Reinsel, Schlichting, & Toncheva, 2008)

I think, there is dis-balance between tools to create data (design, simulation, analyses, projects, manufacturing) and tools to consume data by all people in a company. To focus on data access seems to me very important these days. The following passage from Chad Jackson’s blog is another confirmation to that:

The argument against the separation of PDM from PLM is that decisions in a process might be based on the wrong data, which leads to downstream errors… In a granular IT ecosystem, there needs to be a ‘light’ integration between systems. Although it wasn’t clear what form that should take. In my opinion, the key is getting people to the right data.

What is my conclusion? Control vs. Access. I think, this is the next big challenge for all PLM vendors nowadays. Historically, data management (PDM and PLM included) was focused on how to get control of the data. To provide access to data was considered as obviously important, but secondary. I want to get back to Google story. Why Google matters? Because it is one of the best lessons of how value can be created on top of open and uncontrolled data. How to disconnect data control and data access? This is a question PLM vendors need to ask today. Important, in my view….

Best, Oleg

Disclosure: I’m co-founder of Inforbix – company focusing on how to simplify product data access.

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PLM, Mobile Devices and Capturing Input

July 25, 2012

Any mobile device these days is an extremely powerful capturing tool. With the latest development of front and back end cameras, the ability of the mobile device to perform as a scanner, image and video recorder becomes second to none. The ability to capture photo and video open lots of opportunities to innovate. One example – look on the statistics of camera usage on Flickr:

Another example. Just think about latest acquisition made by Autodesk – SocialCam, company focused on social video sharing. One of the fundamental capabilities on SocialCam app was to capture video by a mobile device (like iPhone or Android).

I can potentially imagine many other (fewer socially fancy scenarios) where using a camera can significantly change and even disrupt existing processing many manufacturing companies have in place these days. Think about maintenance, support, operation, manufacturing problem reports, field construction reports and many others. It also can be applied in analyses and other CAE tools. The most interesting "capturing capability" I’ve seen was in Autodesk ForceEffect application.

Another example of content capturing and merge is 3DVIA mobile app:

I think about two capabilities PLM/PDM systems lack today – ability to capture input from mobile devices and the ability to manage a significant amount of media content. Let me speak about them a bit more.

Capturing Media Input (Photo, Video)

It sounds like a simple task, but in fact, it lacks almost in all PLM tools (even those that claim they are HTML5 mobile browser compatible). Welcome to engineering reality. You can see applications running in the mobile browser, but it lack of proper support for camera and other capturing capabilities.

Content Management and Storage

Once captured, image and/or video needs to be handled and managed well. It starts from the initial storage and transmission. Then it goes to the ability of PDM/PLM system to manage this content, which can be significant in size, requires the ability to be sorted, search, applying meta-data, relating to other information sources and many others. You hardly can find these capabilities in most of the available PDM/PLM systems. They are not adjusted for such a type of content.

What is my conclusion? Most of CAD, PDM and PLM vendors today are claiming mobility and support for modern devices. However, in many cases, it is about taking "existing system" and saying – it is available on a mobile platform. I wrote about it in my post – PLM mobile gold rush. Did vendors miss the point? At the same time, not to miss small details becomes so important. This is something PLM vendors need to learn from mobile app developers in consumer space and web. Extra-click and bad user experience can destroy the future of your app. Just my thoughts…

Best, Oleg

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Yahoo! has some PLM problems… Really?

July 24, 2012

I’m not using much Yahoo! products these days. Actually, I do. When I need to find some graphic for my blog, I use Flickr and filter results for Creative Common license I can reuse. Yahoo! made quite many splashes last week with the announcement of their new CEO, Xoogler, Marissa Mayer.

I thought the event itself wasn’t much related to PLM. However, the follow writeup made by Steve Arnold, one of favorite Google researchers – Simplicity or Just Simple: Pundits Give Advice to Yahooliganette. The article itself worth reading. Mark it for your next weekend. The following two passages caught my attention.

First passage is related to the fact Mayer is coming from product-development companies and has a development background.

By selecting Mayer over interim CEO Ross Levinsohn, Yahoo could be tipping its hand as to what users can expect. Levinsohn’s background is in content, such as Yahoo News and related offerings such as Yahoo Voices (formerly Associated Content, a publishing platform that’s been criticized as a low-quality “content farm.”) Mayer, meanwhile, comes from a product-development background. In her 13 years at Google she helped create the look of a number of services, from Gmail to Google Maps.

Another one is even more interesting. It describes "fundamental Yahoo! problem related to products":

“Yahoo!’s fundamental problem is that it has too many disparate products with no clear unifying thread that ties them all together,”analyst Shar VanBoskirk of Forrester Research wrote on the company’s blog this week. VanBoskirk, who has followed Yahoo closely, said Mayer must be open to killing the company’s lesser products as she seeks to move things in the right direction.

What is my conclusion? Yahoo! product problems sound very PLMish. I’d encourage PLM companies try to optimize Yahoo! portfolio using PLM tools. It can be an interesting challenge for PLM sales managers and top execs. Just my thoughts…

Best, Oleg

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Why Engineers Don’t Like Company Private Social Networks?

July 22, 2012

Couple of weeks ago, I discussed the potential of Yammer / Microsoft bundle to influence PLM field – Will Microsoft-Yammer kill Social PLM… Not yet. Actually, it seems to me Yammer indeed created some influence on what startups in PLM field are doing.Vuuch, last announcement introduces the ability to create company discussion groups.

In a nutshell, it looks exactly like Yammer idea. The employees of any company can register with their company emails and get an access to discussions inside of the same domain. Here is the link to a short video I found in the email from Vuuch:

Social PLM attempts

In my view, Vuuch is one of the leaders in trying to apply "social-networking" ideas in product development and enterprise. I can see similar attempts coming from large vendors too. The videos below show Dassault 3DSwYm and Windchill SocialLink experimenting with the idea of communities for product development.

Can we ask engineers to behave in a social way?

When you speak about communities, the adoption is a key. Yammer claimed 5 million users and 85% of Fortune 500 companies are using Yammer. Here is the link on Yammer’s Crunch base profile :

With a Freemium model, Yammer enables employees to voluntarily adopt the service. A premium version is available to paying customers and includes additional administrative and security controls, integration with other applications, priority customer service, and a dedicated customer success manager. More than 5 million users, including employees from 85 percent of the Fortune 500, have adopted Yammer’s Software-as-a-Service solution.

I wasn’t able to find numbers related to user adoption of social PLM tools. Are you aware about successful implementation of private social communities in product development and manufacturing? I wanted to raise a provoking question – what is wrong with social PLM communities? Is it about not attractive content, user experience, absence of interest and/or need?

Recently, GrabCAD raised quite many splashes in the engineering space – 250,000 engineers, 45,000 CAD models and 3M downloads. However, GrabCAD is not in the business of private communities for product development. Taking into account their latest announcement, I have to say "not yet". Another interesting example of community building is Local Motors – the place for people (engineers included) to create influencing vehicles together.

What is my conclusion? I think, PLM companies are missing some points in the space of social networking for enterprise. Here is my list of suspects – complicated user experience created by social PLM pioneers, anti-social engineering nature, engineer’s focus on "cool stuff" and ignorance of corporate oriented tools. These are just my guesses and thoughts… I’m interested in your opinion. Speak your mind…

Best, Oleg

Image: FreeDigitalPhotos.net

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Why Cloud PLM will dominate in superior UI experience?

July 20, 2012

Let’s talk about User Interface today. Something that we call UX (User Experience) nowadays. The importance of user experience can be hardly undervalued. The days when a user interface wasn’t important gone, and customers are demanding from software vendors to provide a different level of product usability.

What is the path to a good UX?

Well. We agreed – user experience is a very important thing.Take a look on the picture below. I’m sure, many of you, reading now this blog post and watching this picture can go in your product development, PDM, PLM system and find some similarity with this UI.

However, how practically we can achieve these results? One of my favorite online publications, UX Magazine, published an interesting article – Overhauling a UI Without Upsetting Current Users. I recommend you to have a read. I found to the concept of “redesign by evidence” interesting and valuable. However, my favorite passage is related to “usability testing”:

Usability testing is very different from beta testing. In beta testing, users will typically only report usability problems that make it very difficult for them to accomplish a task—in other words, things that are very clearly bugs. They typically won’t report that they found something challenging or unintuitive. People don’t always like to admit that they failed at something. Also, beta testers (or at least the ones who take time to report issues) are often fans of the product, and are therefore also power users. They may have already learned to work around or ignore usability issues.

This is a key, and many PLM systems failed to accomplish that. To test systems with “mainstream users” and not only “product fans” is very important.

Cloud PLM and Usability Testing

In my view, cloud product architecture and development introduces new opportunity to develop a better user experience. Cloud is eliminating long development cycles and making software to be available on demand. It creates a possibility to experiment with individuals as well as user groups in a very granular form. It allows to achieve a next level of usability testing almost identical to the level consumer web brands have these days.

What is my conclusion? Cloud product development opens new horizons for PLM. Cloud product development and testing provide new platforms and capabilities for usability testing and variety of user experiments. As a result, PLM companies will have an opportunity to achieve an improved level of UI quality compatible with the quality of consumer and web products. Just my thoughts…

Best, Oleg

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CAD Project Cloud Collaboration… What?

July 19, 2012

The life around us is changing fast. Consumerization. BYOD. Cloud. Social. We are in the middle of the biggest technological change that happens in front of our eyes. What does it mean for engineers? Apparently engineering needs are no much different from what it was 10 years ago. The fundamental need to work together (avoid word "collaboration"), exchange design (files, data?) and see the history of changes actually remain the same for a very long period of time. However, the life and environment around us are a bit different these days. The consumer behavior influenced our mind and push us to explore new opportunities.

I was reading SolidSmack’s blog post – GrabCAD Revamps to Push Out CAD Project Possibilities. This is not the first time I’m referencing GrabCAD on my blog. The dynamic and growing startup initially focused on creating of "Facebook for Engineers" recently shifted gears toward CAD collaboration. It looks to me the idea of collaboration and usage of 3DViewer, CAD history (versions) is a way to re-think the reality of cloud work for engineers? I found the following conclusion made by Josh Mings interesting:

Where could it go from here? Competition is heatin’ up in the web-based 3D collaboration scene, and it’s likely not going to slow down. GrabCAD has huge user base, the web presence and the combination of CAD library, 3D file viewing and private sharing, which makes it a very good resource for a project space–limited to an extent, but simple to use. There is no version tracking yet, but viewing at the ‘Files’ tab shows how it’s being pushed toward more organization and file options. But is version tracking really needed?

Josh is speaking about competition. So, I decided to take a look – who is around to do a similar type of job. I found few products and technologies.

Autodesk 360. New cloud tool coming from Autodesk. The idea behind Autodesk 360 is to provide unified cloud experience to people using CAD and other design tools. You can upload files to Autodesk 360, preview them and use basic collaboration.

BuzzSaw. Another product from Autodesk. BuzzSaw is focusing on collaboration around projects (mostly use in AEC and construction domains). The idea of project space and ability to upload files and make them available is a dominant one in BuzzSaw.

AutoCAD WS. This is another paradigm shift product coming from Autodesk (the WS stays for Web Services). In a nutshell, AutoCAD WS is Google Docs just working with CAD (DWG) files. It is on the cloud, and you can upload and download files. Mobile clients convert AutoCAD WS in a popular tool you can use when "on go".

n!Fuze. This is a relatively new product from Dassault Systems. Focus of n!Fuze is how to make SolidWorks CAD (but not only) files available and shareable between people.

3DVia. Online community created by Dassault System. People can upload CAD files and share them. Dassault sees 3DVia as a part of their future broad consumer strategy 3DSwYm (See what you mean). 3DVia is probably more useful when you work with CATIA. However, I’m not aware about limitations in working with other CAD systems as well.

In addition to these specific tools, I’d be mentioning few "generic purpose" technologies and products that can provide cloud, community and file sharing capabilities – DropBox, Google Drive, Sky Drive, Office 365.

What is my conclusion? I think, software for engineering industry is ready for the biggest "rethink impossible" moment these days. Challenge fundamentals. Achieve impossible by making things simple again. Will it be done by large companies or small startups? It really doesn’t matter. Winners will be companies that can adapt faster to new technological and business realities. Just my thoughts.

Best, Oleg

Image: FreeDigitalPhotos.net

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PLM Cloud and Software Licensing Transformation

July 18, 2012

The topic of software licensing is one of the most debated in the context of industry transition to the cloud. PLM is not immunized to this discussion, and I can see it happen in many forms in blogs, twitter and other social media forms. I definitely cannot bring all quotes to this post. One discussion that caught my attention recently in Ralph Grabowski’s WorldCAD Access blog. Ralph is quoting Griffin Securities analyst Jay Vleeschhouwer report from the Autodesk annual analyst meeting in New York:

For Autodesk, switching to the cloud is bigger than the ’90s switch to Windows.

Navigate to this link and have read. Don’t miss comments – they are probably as important as the article itself. In addition to traditional discussion about “security” and “cloud” danger, I found few interesting notes on the topic related to the potential danger of usage metering and other “new forms” of licensing. Here is my favorite passage:

Autodesk showed a slide indicating a progression from today’s mix of perpetual and maintenance revenues (for blended desktop and cloud workflows) to a future of per-user subscriptions and usage metering.

Cloud and Software Licensing Shakeout

This statement above made me think about the real transformation which will happen with licensing model in the cloud era. Traditional software licensing and (especially) enterprise licensing models are not suitable into cloud environment. Until now, the vast majority of enterprise software vendors use to license Servers, CPUs and Databases. With the introduction of cloud environment, most of the metrics became obsolete. How you can license server when you, actually, not really interested to know how many physical servers and/or virtual machines are running to support your environment.

Will “usage” become an ultimate licensing model?

Pay as you go. This is one of the famous and well-known slogans of SaaS (Software as a Service world). The wide adoption of this model in consumer web, raised the question if such a model will work well for the enterprise. Here are few pros and cons I can see.

Pros:

- simple model focused on “resource consumption”

- create a feeling or “fear pricing”

Cons:

- in some situations can be unpredictable

- can create a feeling of “license hostage” for customers.

What is a potential alternative to “usage” in cloud licensing? In my view, I can see 3 additional alternatives: capacity (size of the data storage), timeshare and end user (named users) licenses. All these models are implying “usage” in different forms. To pick up the right one (or combination) will be an important step for vendors.

What is my conclusion? One of the most important questions every cloud vendor needs to ask these days is how to create “a predictable licensing model”. Customers are afraid about a potential license hostage. To prevent it, vendors need to focus on transparency of cost calculations and potential alternatives. Just my thoughts…

Best, Oleg

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