Open vs. Closed PLM Debates

June 24, 2010

I read Fortune CNN Money Blog article by Jon Fortt – Chrysler’s Engineering Software Shift. In the competitive world of PLM software it raises again the question about what is the better choice – Open or Closed? The context of this article is leaked information about Chrysler’s movement from CATIA to NX or, maybe more from DS PLM product lines to Siemens PLM. However, author made a nice association between the engineering software story and bigger story related to the strategy of closed platforms such as Apple, Oracle and Cisco. It made me think how I see the future of Open vs. Closed routes in PLM.

CAD Openness
The debates about openness of CAD and later PDM/PLM software is not a big news in the industry. From the early beginning, CAD applications tried to protect themselves, by creating a proprietary format to store geometrical models and drawings. For the long period of time and until now, practically all leading CAD vendors are using closed file formats. It created a separate industry of companies working on translators and supporting so called “interoperability”. The discussion about CAD openness and interoperability is probably the longest one I can remember in the history. I’m not sure we’ll be able to see the end of this story. The current situation reflects clearly the conflict of vendor’s business models and user interests. CAD industry veterans outline the future of CAD (MCAD) will remove this barrier and make CAD product more open. You can take a look on my blog post – CAD Future: How To Liberate Data.

PDM/PLM and CAD Integration
In the beginning, PDM was about just managing meta data about CAD File. It started from revision management and release control. Most of PDM system in the market managed to have multi-CAD integration strategy by supporting multiple vendors. However, customers were interested in more integrated products. Evolution of PDM product into PLM, including their ability to manage a diverse set of product data and processes, just added more fuel into development of future PLM Platform strategies. It was a time, when vendors started to think seriously about how to create completely integrated product suites. Dassault V6 is a first kind of system that introducing CAD/PLM system bundle.

CAD vs. PLM Openness
What is the difference between CAD and PLM Openness? In my view, it is an interesting turning point in the overall story of engineering software. In the real world, customers are working with a diverse set of tools. In the world of pure CAD, their decision to work with multiple CAD products was hard, but doable. Many of the customers (especially big ones) worked historically with multiple CAD products. PLM is adding new flavors in the old story about CAD openness and interoperability. This is the place where the world of CAD files ends and companies are starting to think more about how to manage all engineering and enterprise data assets.

The Future Is Open?
The most important question is how we can move into the future where data will be more open. I think, many of the companies, are thinking how to solve this problem. It looks like a very promising future to make data open. However, the business reality is different and companies are continuing to make profits from closed platforms. The following quote from Fortune article is the most important, in my view:

When the closed strategy works, it can yield outsize profits — Apple’s recent financial results being a prime example. But it can backfire, too. If a company’s bundle of products doesn’t work together well enough to justify the added cost, customers can get turned off. That’s the danger for Dassault. Joe Barkai, analyst at IDC Manufacturing Insights, says that in this age of consolidation, automakers are more likely to be looking for flexible design systems that can easily share data with a new partner or supplier.

What is my conclusion? I think, we are going to see more and more stories related to development of Open startegies. There are clearly two possible options: 1/To create excellent integrated product suites and sell them to customers (i.e. Apple story) or 2/To develop open strategies. My take – I think Open game is hard. However, the prize can be big. Just my thoughts…

Best, Oleg


How To Disrupt PLM Price with Technologies?

June 21, 2010

My post “How To Manage ECO Without Paying $1’500 Per Seat” raised a very interesting discussion on Zero-Waite State blog about PLM price. Thanks Stephen Porter for doing that. I recommend you to get inside and have a read. This post made me think about the future of PLM price trajectories and an impact of technologies on the future of PLM price.

The Future Disruption

I hope you had chance to read the book by Chris Anderson – Free: The Future of a Radical Price. I’d call it the modern “Bible of Free”. One of the important points, in my view is the following – “information and technology cost is trending towards zero”. As part of this, my own believe is that we are going to experience an influence of this trend, including an influence of free-price-market in various fields. The potential weak elements in the chain of highly priced software products are those that have a serious customer dissatisfaction or a very high price/value characteristic. What happens with PLM? In my view, this is a definitely weak chain. The complexity, over-promising during a sale process and history of acquired products and companies created a place that needs to be disrupted. I can see potential PLM disruptors PLM disruptors – Open Source (Free Distribution) of Aras, few on-demand products and PTC SharePoint business. The last one is trying to ride SharePoint adoption and Microsoft strength in the enterprise market. Who will be more successful in the future PLM disruption? A very interesting question…

PLM Technology Weakness

Where I see a weakness in PLM technology we have today? The current technological approach was born 15-20 years ago. We are continuing to SQL our future. The development of most of PLM technological platforms are balancing to co-exist between existing customer commitments and future product development. Platform fundamentals are the same regardless on the type of user interface or modern marketing terms. This technology is vulnerable in front of new development that happened during past ten years in Web 2.0. To understand the scope of the last ten years and the potential influence is very important.

What is my conclusion? When Stephen is asking – The Price Is Right?, I’m thinking about sales lessons I learned in the past. The right price is one customer will be ready to pay. Since PLM sales these days are not similar to sales of iPhones and iPads, I think we have a problem. We won’t be able to solve it since the problem is not in the price, in my view. The problem is broader and related to all main components of PLM delivery to customer – price, technological complexity and high price customer need to pay by installing, customizing, modifying software and training people. To make PLM cheaper, to provide a more flexible PLM pricing model, or even give PLM away can definitely provide some pain-relief, but will not give a radical change to the industry.

Just my thoughts.
Best, Oleg


Mid-market PLM: Smashed Or Transformed?

April 5, 2010

I’m following PLM for mid-market trends Jos Voskuil’s virtualdutchman blog. This weekend, I had chance to read his PLM for mid-market mission impossible post: PLM for the mid-market – mission impossible. Jos figured out two main characteristics of PLM:

[… There are two main characteristics for this mid-market:

Sales and implementation of software is done through Value Added Resellers and not through the vendors or big service companies. The software revenue per customer does not justify high expenses for global consultants with additional high expenses due to travel costs (and sometimes the local language issue). The local VAR is supposed to be the point of contact.

Mid-market companies do not change their main company processes. Depending on the type of core process, let’s assume ETO or BTO, they have sales and engineering working close together on product/solution definition and they have manufacturing planning and production working close together on product/solution delivery. In term of functionality a PDM focus for sales/engineering and an ERP focus for manufacturing…]

I found the combination of these characteristics interesting. Because they are presenting how orthogonal is everything in mid-market to the successful PLM implementations made for large enterprises. Mid-market journey for PLM companies was important for two obvious points- (1) to expand market; (2) to establish the strategy for supply chain – place where FTP and USB drive is leading. However, vendors tried to push PLM in a very straightforward way. Costly direct sales were replaced by optimized indirect channel (VARs) and costly customization, implementation and services were replaced by optimized out-of-the-box solutions. It seems to me the results are pretty much smashed. It doesn’t work.

What is my take on Product Lifecycle Management for smaller companies? There are two important words I want to think about – granularity and transformation.

The history of successful software is a history of transformation. If you remember CAD history or PDM history, you will understand that at the time when a significant failure or dissatisfaction happened, new technologies and solutions came and presented their capabilities and values. 15-20 years ago 3D CAD systems moved from big workstations to PC – we know what happened then. 10-15 years ago PDM projects moved from the state when they required compilation and build to manage customer data to more flexible SQL-based data modeling running on Windows and later Web solution. Clearly current PLM state of the art systems requires re-thinking and change.

I like this word. For me, it means first of all precision and understanding. As I mentioned few months ago, large monolithic PLM implementations are a thing in the past. To find PLM solution for smaller customers will require to go and understand what these customers are doing on the very granular level. The best demonstration of granularity for me is the web. Combined from a huge amount of granular data pieces it represents a solid and well functioning system.

What is my conclusion today? Trying to replicate big ideas sometimes requires more than a company financial interests. The distance between racing cars and mass-production is huge. Technology is a tricky issue in the enterprise and when you are trying to scale it down might become broken. I think, last 3-5 years presented a very interesting try in implementing PLM solution for a smaller organizations. Today is a time to analyze results and think about future transformations.

PS. So, how PLM for mid-market story should end? The following video is just one idea…


How PLM Vendors Can Listen To Competitors?

January 17, 2010

Last week I had chance to read Forbes’s article (Listen To Competitors — Not Customers), which made me think more about competition in Product Lifecycle Management. I read this article few times, and, I think, found why I felt not comfortable with position of author. The definition of customers is simple. Those people or organizations which consume products your organization manufactures. If you think about new markets, it is very simple to identify who are that organization or people you need to talk to. However, with competition the situation is not as simple. The definition of competition is subjective. You can consider the specific company (or product domain) as a competitive, but in fact, this is false reality.

In my view, today’s situation on the PLM market characterized by a very small amount of vendors that fight on the lucrative space of the specific services. At the same time, mainstream adoption of PLM is still a very significant problem. For the last decade, number of companies playing on PDM/PLM market decreased due to competitive acquisitions. If you will be listening to the PLM marketing, you can be confused by similarity of offering and messages. So, to realize a potential listening to the competitors the process of competitor’s selection need to be much different and going beyond Gartner Magic Quadrant.

So, what is my conclusion today? Discovering multiple ideas surrounding Product Lifecycle Management, I found many times that customer’s perspective on technology and product positioning is quite different from mainstream marketing presentations. Thus, you can find something, I’d call “alternative” and not “competition” to PLM. So, with such correction, I think, PLM companies need to watch alternatives to their solutions- it will create more balanced view and will focus on the competitiveness and ways to provide value to customers.

Just my thoughts…
Best, Oleg

Key Success of SharePoint – What Should PLM Learn?

January 6, 2010

I’ve been thinking about Microsoft SharePoint success in enterprise organizations. For the last few years Microsoft leapfrog in their ability to provide SharePoint-based solutions. I will put below few points that in my view are the foundation of this SharePoint success.

1. Basic solution for share files and portal availability.
2. Initial licenses embedded in Windows Server.
3. It doesn’t require huge upfront implementation and service efforts.

What I can conclude is that most of SharePoint deals were down without huge IT involvement and, of course, CIO approvals. I’m sure that many CIOs even don’t know how many SharePoint instances they have in their organization. The conclusion – no CIO involvement can simplify your solution path to the organization.

Now, I’m thinking back about PLM. For the last half decade, the most important message from businesses and sales I heard about – we need to sell PLM to C-Level. This is so called ERP lesson. This is the way ERP was sold to many organizations. My question today – is it something that PLM need to continue pushing forward? No, I don’t think so. Don’t take me wrong, I don’t see any problem in selling enterprise solutions to CIO in the big organization. However, when you think about mainstream adoption, ability to expand the solution in the organization, to get some end user commitment will be very beneficial.

So, what is my conclusion today?. PLM needs to learn how to play Trojan Horse in the organization and start flying below CIO radars. This is what SharePoint did, and, I think, it was successful. Of course, after implementing such strategy you will be invited to CIO too. However, your position will be different.

Just my thoughts. YMMV.

Best, Oleg

Top Five PLM Software Challenges for 2010s

December 27, 2009

We are coming to the new decade, and I found interesting to drop my thoughts related to what I’d expect in 2010s from Product Lifecycle Management. I think last 10 years were the period of initial introducing of PLM concepts on the market. Initial came in early 2000s as a transformation of Engineering Data Management and Product Data Management, PLM emerged as an integrated information oriented approach to manage a product lifecycle.

1.  Find Simple Solution for Complex PLM Problems. Most of the people in the industry today agreed about the need to manage a product lifecycle. However, opinions about what should be a way to do so are very different. This is in my view the biggest PLM problem today. PLM considered as a complex, expensive, service-depended software initiative. Established PLM brands as well as newcomers are trying to explode complexity of PLM. I think it will be the biggest challenges PLM companies will try to resolve in coming years.

2. Explore New Business Models
. Life is going to be different in the next ten years in everything that related to business models. PLM will not be able to continue existing business model with mostly direct sales, heavy reliance on the service offering by partners and marathon of new product releases with new features. What will come next? Open Source, Online / SaaS services or maybe even “Free” options. Time will show…

3. Processes beyond Engineering. PLM is very much about what engineering is doing. Most of products became mature in design and engineering. At the same time, there is no significant presence of PLM products related to disciplines outside of R&D departments.

4. Internet Technologies Adoption.
Majority of PLM systems was created based on previously available EDM/PDM and CAD products. Some of the products related to ERP offering inherited lots of ERP technologies. However, nature of PLM products drives Product Lifecycle Management into areas where Internet technologies demonstrated clear differentiation – scale of data management, integration, collaboration, information sharing. PLM needs to stand in front of complicated decisions about how to adopt various internet technologies to keep tecnological leadership.

5. Develop Open Strategies.
For the long period of time CAD (and PLM too) considered as not open products. This is come initially from low interest to share product data information, integration, etc. In my view, current status quo served as very bad characteristics of CAD and PLM software. I think, many organizations these days understand it and require a change in existing CAD/PLM products.

So, these are my 2010s predictions, and I’m looking forward to you comments and thoughts.

Best, Oleg

Will Mashups Grow Up In PLM?

December 23, 2009

Short prompt to think about before Holiday break. Mashups. First coming to us with the world of Web 2.0 and dynamic web site content, mashup becomes an interesting function in many web applications. I think mashups are still very tiny business industry, but this technology was very successful in my view for some of applications like Google Map and not only.

Here is Wikipedia definition of Mashup:
In web development, a mashup is a web page or application that combines data or functionality from two or more external sources to create a new service. The term mashup implies easy, fast integration, frequently using open APIs and data sources to produce results that were not the original reason for producing the raw source data. An example of a mashup is the use of cartographic data to add location information to real estate data, thereby creating a new and distinct web API that was not originally provided by either source.

You can find some interesting ideas related to Enterprise Mashups and development around that in the recently created Open Mashup Alliance. Take a look on the following white paper:

So, my question today is as following. How do you see Mashup advantages in building of product data services and improvement of PLM applications? In my view, the technological foundation of mashups can be an interesting choice when moving PLM application to become more open and available in the way of online services.

Just my thoughts.


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