DIY Cloud PLM using Aras Innovator

November 14, 2014

diy-cloud-plm

I’m continue to explore the topic of cloud PLM options. My last blog post about it covered delivery options for cloud PLM. It raised few interesting discussions showing that vendors are closely following up any opportunity to leverage a combination of existing PLM platforms and cloud infrastructure. IaaS is a technical buzzword behind this option. It researched by many PLM vendors. I discussed one of them in my Azure Cloud Box blog post.

Today, I want to speak about another option. My attention caught Minerva blog post – Tutorial : How to start an Amazon EC2 cloud server all prepared to install Aras Innovator! It provides step by step instruction how to make your first step in cloud PLM strategy. As I mentioned many times, Amazon Web Services (AWS) is remaining one of the most widely used option to deliver IaaS strategy. If your cloud PLM vision is mostly focused on how to reduce a burden of IT and infrastructure, you may consider "Do It Yourself" cloud option by deploying your existing PLM system to Amazon based servers. The following passage below says it is sometimes tricky to install Aras, but if you will follow steps explained in this blog, in 1 hour you will have Aras running from AWS cloud.

The Aras Innovator install is still extremely simple. Of course I say that because I already tried to install other solutions and I went in some training for other solutions and it has always been a disaster to uninstall these. The first day, you spend it installing the solution, the day after you copy the virtual machine of another trainee as it failed… This doesn’t happen in an Aras training. But Aras Install can fail sometimes, it always rely on your windows server and IIS configuration. But as long as you follow the tutorial you should be just fine. In less than 1 hour you should have Aras Innovator Up&Running starting from scratch!

The idea of Aras on AWS made me think again about IaaS approach in cloud PLM. The biggest advantage – you can get rid of infrastructure and IT by moving to Amazon. Aras Innovator is an interesting option. If you opt out Aras subscription and limit yourself to Aras enterprise open source, the cost of solution will be equal to your Amazon bill. Of course, I’m not counting implementation cost and cost to handle Amazon servers. It can give you some idea about fundamentals of cloud PLM economic related to potential of infrastructure sharing and servers utilization.

What is my conclusion? In the past, I’ve been discussing "DIY PLM option" by combining Excel spreadsheets, email and multiplying it by some database development skills. That was DIY PLM circa 1995. These days, cloud PLM also has its DIY option – to reuse existing PLM software from IaaS based cloud servers. This is a very real option you can explore to learn about benefits and pitfalls of cloud PLM. Just my thoughts…

Best, Oleg


The definition of cloud PLM

November 7, 2014

cloud-plm-def

PLM industry is moving towards broader adoption of cloud solutions. More people these days are asking how to implement cloud. It becomes more and more clear that devil is in details and cloud environment can be very different. It comes in variety of aspects related to infrastructure, support of browsers, the need to have elements of software installed on your desktop and mobile devices. It depends on many options. I’ve been touching some of them in my earlier blog – PLM cloud options and 2014 SaaS survey.

As part of overall eduction about cloud technology, it is not unusual to get a question about what is definition of cloud solution in general and more specifically – cloud PLM. I’ve been reading CIMdata commentary – Next Generation Cloud-Based PLM Solutions. I found the following passage as a good summary of cloud PLM definition:

1- On-demand solutions with new cost models that have lower upfront costs for software licenses, subscriptions, or rights-to-use, allowing smaller companies to afford PLM

2- Hosted computing services and environments that do not require investments in infrastructure, providing access to information for anyone at any time while minimizing administrative overhead

3- The ability to add and increase scope of capability and the performance of the solution and processes without requiring additional investment in the underlying IT infrastructure

4- Global access to required application functions, information, and processes

CIMdata’s cloud PLM definition combines some technical aspects blended with business and licensing characteristics of PLM solutions. In my view it is clear indication that cloud PLM story is not pure technology. Customer demands are to find solution that solves multidisciplinary problem of system – technological, business, licensing. It is also shows the fact customers are dissatisfied with today’s business practice of PLM software licensing.

What is my conclusion? The technology and business are going together. Cloud PLM is about to solve customer problems in different aspects – improved business models, low cost and better experience. However, in my view, an interesting part of cloud PLM innovation can be related to the part of PLM system implementation. For many years, implementation was one of the most complicated element of PLM. It takes time to adjust system, capture business processes and set up tools to run and optimize product development. The first PLM vendor who will crack how to leapfrog PLM implementation using cloud business model and technology can gain a significant competitive advantage. Just my thoughts…

Best, Oleg

photo credit: JD Hancock via photopin cc


Cloud PDM hack with Google Drive and other tools

November 6, 2014

google-drive-app-launch

Earlier this week I talked about future of ubiquitous CAD cloud drives. My hunch CAD and other engineering software companies will be trying to use new cloud technologies to improve the way people collaborate on design. The question what tool to use for CAD file collaboration is not simple. I discussed it last year – Top 3 pros and cons to have a special CAD file sharing tool.

Engineering software vendors are trying to bring values such as collaborative viewing, redlining and even project collaboration. At the same time, companies focused on generic file sharing and collaboration are in a full swing to improve their mainstream solutions as well.

Some interesting news came from Google yesterday. Read Google blog post – Launch desktop applications from Google Drive in Chrome. The story is quite simple – Google is chasing Dropbox in the way how to make Google Drive even more transparent to work with desktop tools.

But here’s the catch: when it comes to browsers and installed applications working well together, they aren’t quite on the same page. To change that, today we’re launching a new extension for Chrome that lets you open files from Google Drive directly into a compatible application installed on your computer. This includes apps like advanced image and video editing software, accounting and tax programs, or 3D animation and design tools. So, no matter what you keep in Drive, using the web to access and manage files doesn’t mean you’re limited to using applications that only work in your browser.

Unfortunately, CAD files are not in the list of supported file types. I guess, it may change in the future. A transparent sync of files between cloud and local file storage can open a new opportunity and hack the way to simplify future cloud PDM solutions. Still, majority of tools used by engineers today are desktop tools.

One of the biggest challenge I can see here is speed of synchronization and work with multiple dependent files. It can create an opportunity for cloud PDM vendors to innovate. Some of these problems can be solved by software technologies – cloud PDM and Dropbox Streaming Sync. CAD vendors are looking how to innovate in cloud PDM as well. Example – Autodesk adds PDM functionality to PLM360. Alternatively, I can see some potential in hardware solutions to create virtual cloud file system. Here is one possible example of such solution – Panzura Global File System.

What is my conclusion? Cloud to desktop transparency is a big deal. There is no magic. If you want to use desktop tool you need to sync files. However, technology that can make it transparent can simplify user experience and make users unaware about actual location of files and the way files are going to be synchronized. It will allow to use existing CAD tools but and manage and collaborate using cloud. Just my thoughts…

Best, Oleg


The path towards ubiquitous CAD cloud drive

November 4, 2014

cad-files-cloud-drive

I’ve been talking about future of cloud file system and CAD data trajectories the other day on my blog. It goes back and connected to multiple discussions about future of file system. What will be future of file systems and file paradigm. Can we announce the death of file system? So, file system is dead, long live cloud file system. The cloud eco-system is developing fast and I wonder how CAD companies will keep up with the speed of changes, environment, technologies and adoption. One of the things is related to cloud storage. Navigate to one of my earlier posts to read more – CAD companies and cloud storage strategy. One of the main points – storage is a temporarily market.

It looks like CAD companies are certainly following the trend. Autodesk just recently released a completely refreshed version of Autodesk A360 Team version of project based collaboration tool. Navigate here and you learn more about how to share documents and cloud storage. Here is a short passage, which summarize A360:

Our customers are in the business of creating things and they organize people and data around their business and their projects. A360 is a tool that brings together people, design and project data, ensuring everyone is informed and involved.

a360-1

a360-2

My attention was caught by another announcement few days ago – MySolidWorks Drive. According to SolidWorks blog MySolidWorks drive provides a way to collaborate on data located on public cloud – Google and Dropbox.

Connects cloud-based file storage services, such as Dropbox and Google Drive with MySolidWorks. MySolidWorks Drive enables SOLIDWORKS users to view their designs online with the eDrawings online viewer and easily share large designs files with manufacturers, colleagues and vendors from anywhere.

I captured few screenshots showing more details about MySolidWorks drive from Michael Lord’s blog.

solidworksdrive-1

solidworksdrive-2

Both examples made me think again about transition of design environment to the cloud. The biggest challenge here is to operate in the environment with mixed data. Existing design data is heavily persisted on engineers desktops and company shared network drives. At the same time, new products are providing customers with the opportunity to improve design collaboration using new modern cloud environment. The third factor is related to mainstream cloud providers. Cloud storage is a temporarily market and cost of storage is decreasing very fast.

Autodesk and SolidWorks examples are not unique. Recently, on my blog, I was talking about cloud file sync features developed by Kenesto. In addition to that, you might remember by discussion with Hardi Meybaum of GrabCAD about CAD file sharing collaboration tools.

What is my conclusion? We are coming to the point of potential collision between CAD vendors strategies and giant cloud vendors strategies. Customers are tempted to move their data to Dropbox, Google Drive, Microsoft One Drive, Box.com and other non-CAD specific cloud storage. At the same time, CAD and other engineering software vendors are developing cloud collaboration software with specific value proposition tailored to engineering and CAD specific data. How new CAD collaboration and data management products will navigate in such environment? This is a good question to ask. My hunch, cloud file collaboration will be in a focus of all CAD vendors in a near future. Just my thoughts…

Best, Oleg


PLM cloud options and 2014 SaaS survey

October 24, 2014

plm-cloud-options-2014-saas

The number of SaaS businesses is growing these days. You probably had a chance to read my CAD, PLM and Top 500 cloud app vendors list few months ago. However, one size doesn’t fit all. This is certainly true about engineering software and PLM. As PLM companies are moving to the cloud, we want to learn more about possible options and strategies of how do we move to the cloud. Below you can find a list of my previous articles covering the diversity of cloud strategies from major CAD/PLM vendors – Autodesk, Dassault, PTC and Siemens PLM.

PLM vendors, large manufacturers and public cloud

Dassault is going to support all PLM cloud options by 2015+

Siemens PLM Analyst Event and PLM Public Cloud Strategies

The challenging face of dual PLM clouds

PLM Cloud Switch and PTC Final Click?

In my view, CAD and PLM companies are in a very active stage looking how to build cloud technologies and products. We can make an initial comparison of cloud PLM strategies of several CAD/PLM companies. Autodesk and Arena are fully embraced cloud as a primary way to deliver PLM solutions to customers. Siemens PLM and PTC are following IaaS strategies. Dassault Systems strategy is to support all cloud options by 2015. Aras plan to leverage cloud from both technology and business strategy.

PLM companies are joining growing population of SaaS businesses. It means we can start gathering some statistics about these companies, their performance and technical aspects of cloud delivery. If you considering to build your future PLM strategies around cloud, this is can be very valuable data point for your research.

My attention caught by 2014 SaaS Survey published by for Entrepreneurs blog by David Skok (@BostonVC). If you are in SaaS business, it is must read article. The following two charts caught my special attention. It gives you a perspective on how cloud (SaaS) applications will be delivered:

saas-2014-plm-delivery-options-2

Another one shows how delivery method changes as SaaS business is growing.

saas-2014-plm-delivery-options

Today, cloud PLM is only part of the business for all major CAD/PLM companies. It is hard to statistic from the research above to these businesses. However, it clearly gives you some perspective on business performance and aspects of how cloud PLM business will be developed in the next few years.

What is my conclusion? Cloud is here. There is no escape path. Manufacturing companies should look how to optimize their IT infrastructure and application delivery methods. I’m pretty sure, cloud PLM will become part of this optimization. It is probably a good idea to make yourself familiar with the aspects of performance of SaaS companies to create a foundation for future strategy meetings. A note for PLM IT managers and PLM architects. Just my thoughts…

Best, Oleg


Why to ask cloud PLM vendor about Devops and Kubernetes

October 23, 2014

dockers-containers-cloud-plm

I want to continue the theme of how do we move to the cloud. While Amazon remains one of the major providers of elastic computing services, other options are emerging too. If you consider to move your PLM initiatives to the cloud, you might do some analysis about how actually cloud PLM can be made. Few weeks ago I was talking about large manufacturing and public cloud. Public cloud is an interesting option. At the same time, regulated manufacturing and companies with significant security restrictions can question this path. One of the alternatives for these companies can be just announced Azure Cloud System from Microsoft/Dell. It will take time for PLM vendors to support it, but Cloud PLM In Azure Box can become a reality soon.

Today I want to speak more about some trends in cloud computing and how it can be related to you future cloud PLM project. Remember my article What cloud PLM cannot do for you? The biggest achievements of cloud PLM today is removal of IT hassle and complexity. With cloud PLM you don’t need to think about servers, installations and even upgrades. However, here is the thing. The number of cloud applications is growing. Application lifecycle is getting more interesting these days. Large enough company can easy face the situation of management of multiple clouds – public and private at the same time. Complexity of manufacturing organization, supply chain, security or other IT-related reasons can easy bring you to such situation. These are not simple questions and it is very important to create a right strategy for your IT organization managing cloud PLM and other application providers.

Devops

You can consider “devops” as a new buzzword. It comes from a combination of “development” and “operations”. Bricks and mortar PLM software vendors were doing development only. They developed, tested and shipped CAD, PDM and PLM software on CDs and you had to hire IT specialists to install, configure and run it. Now, it is different with cloud software. By removing IT hassle from customer, software vendor is taking a role of IT too. It created a new paradigm of development+operations together. Think about engineering and manufacturing. They have to go together to make it work.

InfoWorld article Devops has moved out of the cloud speaks more about devops trend. I like the way it makes demystification of cloud by explaining how the same infrastructure can be used for both cloud and non-cloud development and IT environments. It also helps you to understand the importance of operation to achieve the quality of cloud services. Here is my favorite passage:

Many people attribute the rise of devops directly to the growth of cloud computing. The connection: It’s easy to continuously update cloud applications and infrastructure. For example, a SaaS application typically requires 1,000 lines or more of changed or added code each time you use it. Its functionality is continuously updated, which makes the cloud-delivered application, platform, or infrastructure more valuable to the users. Gone are the days when you received CDs or DVDs in the mail and had to manually update the servers. Although the cloud is certainly a better place for devops, I don’t believe that devops should be used only in cloud deployments. Instead, you should use devops approaches and enabling tools such as Puppet or Chef in most of the development you do these days — both cloud and on-premises.

Kubernetes

We need to thank Amazon EC and other IaaS vendors for incredible success of cloud computing we have today. However, technology doesn’t stay still. For the last decade public web companies learned many lessons how to manage infrastructure and software development on demand and on scale.

Kubernetes is an example how web companies can scale using cloud infrastructure. Navigate to ComputerWeekly article – Demystifying Kubernetes: the tool to manage Google-scale workloads in the cloud and spend some time even you will consider it a bit technical. In a nutshell it speaks about new technology of cloud deployment – containers, which comes to replace well-known VMs (Virtual Machines). Here is the most important passage in my view:

Kubernetes and Docker deliver the promise of PaaS through a simplified mechanism. Once the system administrators configure and deploy Kubernetes on a specific infrastructure, developers can start pushing the code into the clusters. This hides the complexity of dealing with the command line tools, APIs and dashboards of specific IaaS providers. Developers can define the application stack in a declarative form and Kubernetes will use that information to provision and manage he pods. If the code, the container or the VM experience disruption, Kubernetes will replace that entity with a healthy one.

containers-vs-VMs

While it may sounds too complex, the key issue here is related to the lifecycle of complex cloud PLM environments. At the end of the day, cloud PLM vendors will have to manage updates, introduce new features, maintain data and more. This technical example can show you the gap between new type of cloud infrastructure and opportunity to move an existing PLM server from your server room to the cloud.

What is my conclusion? We should move beyond “cloud PLM” buzzword. Enterprise software vendors are moving from shipping CDs towards selling software services. It simplifies customer experience, but creates new layers of complexity in vendor’s organization. It moves software development to devops and creates technologies that capable to manage application lifecycle easier. It ends up with the quality of PLM cloud service. Keep it in mind when you evaluate you future cloud PLM project. Just my thoughts…

Best, Oleg


PLM and Microsoft Azure Cloud In A Box

October 22, 2014

ms-azure-cloud

How do you move to the cloud? This is one of topics I’m discussing on my blog for the last year. The last time, I took a swing towards public cloud. Navigate to my PLM vendors, large manufacturers and public cloud article for more information. However, not everybody will move to public cloud. At least not very soon.

For those who is looking for alternatives, especially within private cloud zone, the last update from Microsoft can be a very good news. Navigate to the Business Insider blog – Microsoft’s Satya Nadella Just Fired A Shot At HP And IBM. Microsoft turns to Dell to create a new computer server. Here is the passage which provides more info:

The new computer is called the “Microsoft Cloud Platform System” and it will be a mini-version of Microsoft’s cloud, Azure, that enterprises can install in their own data centers. By using this server, enterprises can easily move applications from their own private data center to Microsoft’s cloud and back again. (In geek speak, this is called “hybrid computing”.)

Some more details came from CMSWire blog earlier today – Take a Seat Google, Amazon: Microsoft’s Cloud Wins the Day. So what is that Microsoft Azure Cloud in A Box. Here is the definition of a “Box”:

...new Azure-like appliance that Enterprises can deploy in their own data centers. It has been designed specifically to handle big data workloads (32 cores, 450 gigabytes of RAM and 6.5 terabytes of local solid-state drive storage). Officially named the Microsoft Cloud Platform System (CPS), powered by Dell it is, in essence, an “Azure consistent cloud in a box” with pre-integrated hardware from Dell and software from Microsoft.

I captured the following architecture shot from WinITPro article:

plm-azure-in-a-box

It made me think about what is the potential impact and opportunity for PLM vendors. For most of them, alignment with Microsoft can be very beneficial. In the case Microsoft will do hard work and promote their Cloud Platform System to CIOs of large enterprise companies, PLM can be the icing on the cake. So, on the surface it all looks good. Especially, for PLM vendors especially fully aligned Microsoft software stack. I guess Microsoft partnership programs can provide some additional benefits too.

The issue I’d like to question is related to data layer. Most of large PLM deployments today are running on top of Oracle database. Oracle has their own cloud plans – Oracle cloud PaaS will provide a magic button for PLM. The availability of Oracle DB as part of Azure Cloud Platform can be questionable and become an issue to move PLM systems to Azure.

What is my conclusion? The devil is in the details. This is the best way to describe the status of cloud PLM software architecture today. PLM vendors are developing their own cloud strategies. Manufacturing companies are looking for the easiest path to the cloud. We will see some interesting moves from both sides. A good time for PLM architects and tech advisers. Just my thoughts…

Best, Oleg

Note: I’m migrating my blog to http://beyondplm.com – you might consider to follow and comment there.


Kenesto revamp: does it change cloud PLM game?

October 17, 2014

kenesto-edm

It has been more than two years since I was reviewing Kenesto – an outfit founded by Mike Payne with the a strong vision to simplify process management. Navigate to the following article PLM, Kenesto and process experience to refresh your memories.

Steve Bodnar of Kenesto put comments on my blog about Google Drive and 3rd party apps with hints about some Kenesto functionality around file synchronization and cloud data management. It was a good alert that Kenesto is preparing some refresh. The following Kenesto press release caught my attention yesterday – Kenesto Extends Engineering Collaboration with New Vaulting and State-of-the-art Desktop File Synchronization. I found it interesting, since it moved Kenesto from process management cloud tool into something bigger – data management and vaulting. Back in 2012, I thought, that ability to handle engineering data is a big differentiation between traditional PLM system and cloud process management tool like Kenesto. The following passage from Kenesto press release can give a short description of the shift Kenesto made – it moved into data and file management space.

Kenesto today announced the full availability of its latest innovations – file vaulting and a pioneering file synchronization service – to enable mainstream design and engineering firms to more easily and effectively collaborate and manage their data. Kenesto’s latest capabilities also work well in conjunction with such design tools as Creo®, SolidEdge®, SolidWorks®, and Spaceclaim® for manufacturing customers and also Revit® for AEC customers, to enable file management and sharing across design workflows. This is all done while also ensuring proper handling of updates to component and assembly models connected to items and bills-of-material, for example.

I made a trip into Kenesto website. It presents a broad range of solutions – engineering design management, change management, procurement and supplier collaboration, program and project management. These are traditional PLM suspects. However, some of solutions are clearly outside of typical PLM domain – management of marketing program, PR and advertising, idea management.

Kenesto features are covering wide range of capabilities – projects, dashboard, reporting, document management, vaulting, web viewing, workflow and task management. My special attention caught Enterprise-class File Synchronization. This is an interesting feature and it made me think about cloud PDM functionality and cloud file sharing. My blog- Cloud PDM ban lifted. What next? speaks about growing interest of PLM and other vendors to apply cloud technologies to PDM – space that traditionally tried to avoid cloud-touch. So, Kenesto just joined the cloud of cloud PDM vendors and I need to add Kenesto in the list of companies open for cloud PDM competition.

kenestoDesktopSync

What is my conclusion? It looks like Kenesto decided to change the trajectory of Kenesto technologies and moved from process and workflow management to a full scope of product data management and lifecycle solutions. I guess Kenesto prefers not to use traditional PDM, PLM buzzwords. However, Engineering Data Management (EDM) acronym made me feel a bit nostalgia… At the same time, cloud sync and in-browser office files editing tools can provide an interesting differentiation in cloud-era. Just my thoughts…

Best, Oleg

Disclaimer: Kenesto didn’t sponsor and didn’t influence content of this blog post.


PLM vendors, large manufacturers and public cloud

October 14, 2014

google-data-center

Companies are moving to cloud these days. The question vendors and customers are asking today is how do we move to the cloud. I’ve been asking this question in my post few month ago – PLM / PDM: Why the cloud? Wrong question… I discovered multiple options for customers to start their move to the cloud – mainstream cloud productivity tools to share data and collaborate, to migrate existing PLM platforms to cloud using IaaS strategies as well as to build new type of platforms and tools using new type of cloud platforms and infrastructure.

Today, I want to show the perspective on public cloud from both sides – large provider of public cloud infrastructure (Google) and large manufacturing company (GE) and to see what is the intersection between their strategies.

Google – example of public cloud platform

My attention caught Google presentation – The next generation of Cloud. Navigate your browser to the following link to watch it. Besides the fact it was inspiring by the exact same question – “How to you move to the cloud”, it provided a very interesting insight on the aspect of Google public cloud platform.

google-1

google-2

google-3

google-4

Hardware cost is declining and Google is adjusting public cloud to match economic realities. Together with economic of scale and utilization, I can see a trajectory towards decreased of public cloud cost even more in the future.

Large manufacturers move to the cloud

So, what customers are thinking about public cloud? Inforworld article just published an article presenting GE strategy to go all-in with public cloud. Presented as an interview with GE COO Chris Drumgoole, article outlines his aggressive plans to migrate to public cloud services — and how they support GE’s organizational goals. Read the article and draw your opinion. Here is my favorite passage:

Drumgoole won’t talk specific numbers, but he claims that “north of 90 percent” of the apps deployed by GE this year have been in a public cloud environment. We’re big fans of the idea that everything ends up in the public cloud utility model eventually. “Eventually” is the big caveat, because some people within GE would argue that should be tomorrow, while others would tell you it’s 15 years from now. It’s a subject of good debate. But either way, the regulatory environment we live in right now prohibits it. In a lot of spaces, when we say technically that we think something should be public, and we’re comfortable with it being public, the regulatory environment and the regulators aren’t quite there yet and we end up having to do some sort of private or hybrid cloud. That’s probably one of the biggest barriers to us moving more public.

Drumgoole speaks about connected devices, big data and analytics as a significant driver to move data to the cloud. I reminded me one of my previous posts – IoT data will blow up traditional PLM databases (http://beyondplm.com/2014/09/23/iot-data-will-blow-up-traditional-plm-databases/). The amount of data is huge and it will certainly require new approach in data management. Here is the example of how much data produced by jet engine these days:

Take one of the jet engines we make, and if it’s fully instrumented. On a typical flight, it’s going to generate about two terabytes of data. Not everybody fully instruments them, but if you instrument it the way people would like in order to get predictive data, you’re talking about 500GB per engine per flight. A flight with a GE engine takes off or lands every three seconds. All of a sudden, the data gets very, very large very, very fast.

PLM vendors and public cloud

As for today, I’m not aware about any PDM/PLM software using Google Cloud as a platform. The majority of cloud PLM software built on top of infrastructure provided by collocated hosting services and variety of Amazon cloud infrastructure. Dassault Systems and Siemens PLM made few public statements about support of diverse set of cloud options and IaaS infrastructure. It would be interesting to see future evolution of PLM cloud platforms.

What is my conclusion? The technology and economic of cloud is changing these days. My hunch, it will pull more vendors and companies to use public cloud in the next few years. Software companies will try to balance between leveraging technological platforms and cost. At the same time, customers will try to balance between regulatory requirements and opportunities to make data accessible and scale without limits. Interesting time and significant opportunity. Just my thoughts..

Best, Oleg


How cloud pricing war will affect PLM?

October 3, 2014

plm-and-cloud-price-war

Large infrastructure cloud providers are slashing prices. TechCrunch article Nobody Can Win The Cloud Pricing Wars is providing some additional details about the situation. The same article speaks about the moment when CIOs won’t be able to ignore the pricing advantage:

Earlier this week, Google lowered prices 10 percent across the board on their Google Compute Engine cloud platform . The cost is getting so low, it’s almost trivial for anyone to absorb the costs of running infrastructure in the cloud, but you have to wonder as the cloud pricing wars continue, how low can they go and if it’s a war anyone can win.

In spite of the low prices, there are still plenty of companies talking about the cloud with disdain and fear, but the fact is how long can CIOs ignore pricing as it goes this low? It doesn’t make good business sense, and whatever risks a large enterprise believe they might face with cloud services, it has to be offset by the plunging costs.

Are you confused by comparison of cloud infrastructure prices? You are not along. GigaOM article provides one easy chart that will help you to demystify cloud prices.

RBC’s formula condenses cloud services into one unit price based on “total spend per GB of RAM,” which includes storage, compute, memory, I/O and other base features. That makes it easier to compare cloud pricing across vendors. Per a research note from RBC analyst Jonathan Atkin this week, the second half of 2014 saw less price cutting than the first half — which included a round robin of competitive cuts from Google, Amazon and Microsoft in March.

RBC-cloud-price-per-GB-RAM1

The devil is in details and I’m obviously interested to see how it will impact (or not) PLM vendors. When it comes to "cloud", not all PLM vendors are the same. While most of them are publicly announced cloud strategy, the diversity of cloud solutions is pretty much high – public cloud platform, leveraging IaaS cloud layer and developing of colo-hosting solutions.

It is important to see business aspects of cloud PLM. Thomasnet article by Verfi Ogewell PLM Market Faces Challenges, Hints at Possibilities provides an interesting perspective on PLM market and impact cloud PLM created. Read the following passage:

One problem in assessing PLM investments for 2013 and beyond has to do with the changing licensing models, a matter which to some extent is connected to merging technology platforms, like the cloud. Increasingly, vendors are moving from paid-up licensing models to subscription models. Paid-up models have annual maintenance fees in the range of 18 to 22 percent of the license purchase price. Subscription models demand payment each year that is in the range of 30 to 40 percent of today’s list software pricing.

Has the hype around PLM in the cloud resulted in customer investments? So far, the answer is no. In fact, it may be the other way around. The cloud has affected the pricing and results on the on-premise market negatively, plus, while many PLM vendors have offerings, most have yet to see any real returns on their investments. Meanwhile, the discussion of SaaS (software-as-a-service) has created expectations of at least more effective pricing models. This picture may change quickly if the new business models for delivery and support of PLM act as triggers for greater investments.

So, what will cloud infrastructure price drop means for PLM vendors? My hunch, this is a good news for PLM vendors hosting their solution on IaaS infrastructure. This is very costly option, especially with existing "on-premise" single tenant PLM architecture. Lower price will allow to PLM vendor to adjust their expenses. It can be even more beneficial for vendors building optimized cloud PLM multi-tenant architecture. However, it probably won’t impact vendors focusing on private and hybrid cloud infrastructure. While regardless on PLM architecture, 50% of PLM project is services cost provided by vendors and implementers, the overall impact of infrastructure cost will have less impact.

What is my conclusion? Cloud pricing war will impact customer mindset. It will increase customer demand to lower cost of PLM solutions. It will shift CIO’s perspective on how to leverage cloud infrastructure in their business. Low cloud infrastructure cost won’t make cloud PLM software free tomorrow. At the same time, it will help PLM vendors to adjust overall cost of PLM services and implementations. Better architecture of cloud PLM solutions will help vendors leverage offsets in infrastructure cost to bring more cost effective PLM cloud services. Just my thoughts…

Best, Oleg


Follow

Get every new post delivered to your Inbox.

Join 261 other followers