PLM Competition Toolbox

May 14, 2012

Normally, I’m trying to avoid the topic of PLM competition. Not very often, readers or attendees at conference are approaching me with the blunt question – what is better? TeamCenter vs. Enovia? Aras or Windchill? My typical answer – there are no “absolute advantages” for a specific PLM system. Enterprise and manufacturing companies are complicated environments. The level of complexity, strategy and current context can create a situation where each specific product will have his own advantages and disadvantages.

However, today, I want to talk about competition from the standpoint of PLM vendor. In other words, what can make PLM vendor competitive strategy more successful? To make this discussion interesting and provoking, I will use some examples of what happened in PLM market for the last 10 years. In the world where PLM buzzwords are getting very similar, I will try to answer on a single simple question – what can make PLM vendor competitive nowadays?

I can see four major strategies that can be used by vendors – discontinuity, marketing and branding, partnership and competitor’s mistakes. These are not specific characteristics for PLM companies and can be used for everybody. However, I will try to fill them with PLM context.

Discontinuity

Enterprise software is a complicated beast. PLM cannot be excluded from that list. It is complex, requires long time planning and implementation cycle. Once implementation it works for a long time,  replacement cost is high too. Add to this last 10 years of acquisition in this field and large vendor platform transformation and you will have a perfect place to play with discontinuity. Formally, nobody is discontinuing PLM/PDM products. Pro/PDM, Eigner, SmarTeam, Metaphase – all these products are supported and maintained by vendors on a certain level. Practically all PLM vendors are building a support network to deal with customers running outdated and retired systems. Therefore, these customers can become a strategic asset for competitors that will be able to propose them an interesting offer. Once the decision made, to change it will be even more complicated because of long processes, politics and corporate ego. Therefore, discontinuity play can be powerful and dangerous.

Partnership

To have good partners in business is like to have good friends in your life. If you have trusted and powerful partners, you can use it as an advantage in your competitive war. In PLM business, I can see two types of strategic partnership – service and sales channel partner (eg. IBM was such for many years in business with Dassault Systems), the parent company (eg. Siemens for Siemens PLM) or another business division (eg. SAP, Oracle, Microsoft). To develop and keep right partnership is very important. To know how to drop partnership is also one of the elements of a competitive game.

Marketing

To build a perfect marketing and branding story is another way to beat competition. Yes, I know… you are smiling and maybe even thinking – who is buying marketing PowerPoint presentations these days. Believe me or not, it happens all the time. If you are powerful and strong brand with billions of dollars in revenue, your marketing story can be very compelling. It will take time, resources and effort to sort it out. Yes, you are in danger to buy a dream. But it can be a very nice and well packed marketing. So, take it seriously. It can be 3D Experience, High Definition PLM, Instant On – dreams is an important weapon too.

Competitor’s mistakes

Last, but not least- the mistakes (or in this context – presents) made by your competitors. You need constantly and permanently watch your competitors. Low quality of a release, compatibility failure, channel problem – all these mistakes are weapon in your arsenal to build your marketing expansion.

What is my conclusion? The PLM competitive landscape becomes more dynamic than before. I can see some movements done by large companies (eg. Autodesk), smaller established companies with very innovative strategies (eg. Aras) and startup companies. As I said in one of my previous posts – PLM is a fun place again. Just my thoughts…

Best, Oleg

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PLM Competition 2010s and Anti-cloud PLM rap?

March 6, 2012

For a very long time, the PDM /PLM market was boring. Not so many events were happened during the decade of 2000s. It was mostly about “acquisitions” of smaller companies by bigger companies. Obvious, large acquisition made historical records – Agile Software, MatrixOne and some others. For me, the interesting PLM innovation of the past decade was Aras Corp. and the idea of Enterprise Open Source back in 2007.

However, it looks like things are going to change now. Something big is really going to happen. The major catalyst is Autodesk. In my view, Autodesk announcement about cloud PLM – Autodesk PLM 360 was a critical mass that changed direction of the market. I recommend you to read Jim Brown’s post – A time and a reason to talk Cloud PLM (thanks, Jim for your kind words about my cloud PLM writing). Here is a short passage that summarized Jim’s position:

The time has come to take a look, at a minimum. Now there is more to look at than vapor, there are some real options to consider. Will they meet your needs? Given the number of options available my guess is that you will find something that can help you improve your business.

Cloud PLM and back to PLM competition

I’m sure everybody knows famous Carl Bass anti-PLM rap? You can see it here. With the new cloud PLM initiatives, we can see how competition is taking defensive statements. The first signal I’ve heard was during PLM Innovation Congresslast month in Munich during my panel discussion about PLM future business models. The conversation between Autodesk and PTC representatives was about PLM and “apples to apples” comparison. I captured it as following:

During the last AU, Autodesk made a very bold statement that Autodesk cloud PLM will be x10 time cheaper compared to traditional PLM offering. On contrary, the position of PTC is that we are not comparing “apples to apples” and there is no single definition of PLM. The hint was that Autodesk probably delivers “a different PLM”.

Another interesting competitive statement was made by Peter Schroer of Aras Corp. Navigate your browser to the following blog – The Cloud Won’t Cure What Ails You. Peter is talking about “cloud” as a technology, that won’t change much and even so, Aras can run their software on the cloud “when a customer is ready“. Here is my favorite Peter’s passage:

At Aras, we’re cloud-ready if and when you are. If you want to deploy your PLM solution in the cloud, that’s no problem. If you want us to host it, we can do that too. If you want it right down the hall, that’s fine with us. We can even do a little of each, if that’s what you’d like. The point is, it’s not about where you’re running, it’s about what you’re running. And companies that don’t get that are destined to wind up with their data locked down in some proprietary cloud configuration with less access and bigger problems than they had before.

In my view, Peter’s passage can be compared with Carl Bass’ anti-PLM rap back in 2007. The question about “some proprietary cloud configuration” is clearly an open call and needs to be answered by cloud vendors.

Enterprise IT and Cloud PLM

In my view, everything that happens now around cloud PLM will finally put Enterprise IT on fire. There is no “business as usual” anymore. Companies will be curious about how they can take advantages of cloud PLM and IT will have to provide an answer. This is will be a moment of truth. The question how Enterprise IT will compete with Cloud architecture and what is not less important – cloud cost. Cost makes a difference these days. Getting back to Peter’s note, it is not about “where do you want to set up your server” question. It is about how to provide a IT infrastructure that can solve two problems at the same time – reliable data access everywhere and low cost.

What is my conclusion? It is an interesting time now. As Jim Brown stated, there are some real options to consider. Data access, mobile and IT cost will become real competitive advantage cloud companies will provide. How fast PLM cloud story will be growing? It is an interesting question. Everything is going faster online. Remember where FB was 5-6 years ago? I’m sure we learn later this year. It is going to be a lot of fun, I’m sure. Just my thoughts…

Best, Oleg

Note: Stay tuned, Autodesk granted me access to PLM 360, and I’m looking forward to sharing my impression very soon.

picture credit digitalart / FreeDigitalPhotos.net

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PDM/PLM and Future Competition

August 19, 2011

Google-Moto deal created a lot of fuss and speculation. At the same time, it created an example of cross-domain innovation, which in my view, worth being analyzed. I’ve been reading Forrester blog earlier today -What Signal Does The Google-Motorola Marriage Send To Product Strategists? Thinking about PLM future, I found the following strategic guidance important:

1. Forget what you know about traditional competitors. If you think you have a rock-solid understanding of your biggestcompetitive threats — think again. You’re probably wrong.

2. Learn as much as you can about adjacent innovations. Look around the fringe of your organization and yourindustry. There are likely to be several pockets of adjacent innovations all around you. If you can’t see them, you’re not looking hard enough. In fact, the next big disruption in your industry will be the result of the unexpectedconvergence and application of those adjacencies.

3. Learn how to control the chaos of idea overload. If you calibrate your R&D spend to stay within your traditionalindustry guardrails, you will fail to see the big adjacent opportunities that may be staring you in the face from theoutside. To be clear, this doesn’t mean to spend more on product development. It means to spend differently, in otherwise unexpected ways.

PDM/PLM eco-system today dominated by a small number of giant providers associated with either large CAD vendors – Dassault, Siemens PLM, PTC and large ERP vendors – SAP and Oracle. The number of smaller companies in this space decreased significantly for the last few years as a result of acquisitions and retirements. I decided to put some of my thoughts related to the potential future of PDM / PLM product, technologies and market space.

Innovation and Consumer IT technologies

I think, manufacturing companies these days are facing a very interesting and even maybe a unique situation. I want to name two most important trends – globalization and cross-organizational optimization. Product cost is the issue on the table, in my view. Because of the current economic situations, companies are not ready to follow the solution path they used before. At the same time, in order to have an ability to decrease product cost, companies are looking how to introduce new solutions, which will be different from what companies have been doing last 10 years. It requires the next level of IT development. Today’s systems are squeezed to the highest level of their potential. Existing PLM software is too expensive and relies on the technologies developed 15-20 years ago. Consumer and web technologies is a potential place where future innovation can come from.

During the last 10 year, the enterprise IT was very busy working on existing software assets and implementations. After Y2K, the enterprise PDM and PLM space wasn’t a place where people focused their innovative ideas. However, last 10 years accumulated huge amount of technologies coming from the web and consumer web space. Web 2.0, online games, social networks, photo-sharing services, e-commerce. This is only a short list of places where real innovation happened. Open source and technological platforms are coming from this place. Manufacturing companies and stagnated enterprise data management deals can be a place to apply these technologies. Focus on how to decrease the cost of change and low TCO can create a future shift in this industry.

What is my conclusion? I think, there is a significant pain in today’s PDM / PLM market status quo. We can see some movements made by existing players on the market. However, in most of the cases, they just put a "lipstick on a pig". To change existing platforms and business models is very costly and painful. Not every business can afford to do so. Especially when you have lots of existing customers and revenues. As it usually happens, outside players can get in and disrupt the space. Do you think it will be possible? I want to know your opinion. Speak your mind.

Best, Oleg

Image: renjith krishnan / FreeDigitalPhotos.net

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“True Cloud” Solution and PLM Competition

July 2, 2011

CAD, PLM and engineering software world is very competitive. Time ago, CAD vendors competed on the number of features. It is not unusual to see lists that comparing features and functions. However, nowadays the competition on features becomes useless. In the era of iPad apps and Web 2.0, you can just say that this application isn’t cool enough :) . I’m almost not following competitive conversations online, and you can rarely see such a type of topics on my blog.

The following Vuuch blog article struck my attention – Vuuch is the first "true cloud" PLM application. Take a time during your 4th of July long weekend and read this article. My good fried, Alex Neihaus is taking the conversation to the level combining some competitive statements mixed with really geeky and cloud language. Here is my favorite passage from this blog:

…despite lots of strategy talks with customers and high-concept keynotes at user conferences from the big PLM vendors, the first company across the finish line with a true cloud application for the PLM community is Vuuch…

…To be a true cloud app, it’s not enough to have a web portal that users access. That’s what Gmail is. Instead of your messages being stored on an internal server behind a corporate firewall, they are stored on Google’s servers. Big deal. That ain’t what we call cloud. To really be a cloud app, the application must have an API that can be called remotely. That is, it must not only have UI, it must be callable from other applications, using cloud technologies…

I found this definition a bit shocking and decide to provide some clarification about cloud technologies that can help to readers to translate this from geeky to normal.

Cloud Computing in Various Forms

First of all, I’d like to point readers to Wikipedia’s article about Cloud Computing. It is educational and provide a comprehensive analyzes of multiple aspects of cloud applications.

Cloud computing refers to the use and access of multiple server-based computational resources via a digital network (WAN, Internet connection using the World Wide Web, etc.). Cloud users may access the server resources using a computer, netbook, pad computer, smart phone, or other device. In cloud computing, applications are provided and managed by the cloud server and data is also stored remotely in the cloud configuration. Users do not download and install applications on their own device or computer; all processing and storage is maintained by the cloud server. The on-line services may be offered from a cloud provider or by a private organization.

Modern development of cloud qualifes three levels of cloud based solution – SaaS, PaaS, IaaS.

SaaS (Software as a service) is a software deployed over the internet, available to the end user as and when wanted. It is also called sometime "software on demand". Payment is per-usage or subscription. SaaS can be considered as the oldest and mature part of cloud computing. Examples of SaaS are salesforce.com, Netsuite, Google Gmail and some others.

PaaS (Platform as a service) is a combination of a development platform and solution stack delivered as a service on demand. It provides the infrastructure that can be used to build a new software application or extend the existing ones without underlying cost of buying and deploying additional hardware and software. Sometimes, PaaS is used to extend the capabilities of existing SaaS solutions. Examples are Force.com (from Salesforce.com); Google App Engine and Microsoft Azure.

IaaS (Infrastructure as a service) delivers computer infrastructure, typically a platform virtualization environment. It includes service, software, data-center and network equipment available as a single bundle. The best known IaaS environments are Amazon EC2 (Elastic Compute Cloud) and some others.

PLM on the Cloud

The idea of PLM on the cloud isn’t new. The first company pioneering cloud deployment in PLM space was Arena Solution (former Bom.Com). Nowadays, vendors are talking about cloud solutions. I can see different PLM vendors are taking various strategies related to the cloud. Among 4 main companies in this space, Dassault is leading with their cloud offering based on utilization of AWS and placements of V6 platform on EC2. Autodesk strategy seems to be interesting too. On one side, Autodesk Buzzsaw is a mature application service (SaaS – according to classification above). On the other side, Autodesk is trying "cloud water" with multiple applications – some of the utilize cloud infrastructure (i.e. Amazon EC) and some of them are focusing more on mobile (AutoCAD WS). Siemens PLM and PTC are more neutral in this cloud game. Vuuch, as I learned from Alex Neihaus’ blog, is now joining PLM on the cloud race.

What is my conclusion? Competition is a tough thing. Especially, when it comes to technology. Customers are not interesting in technologies and more focused on applications these days. I’m a very happy customer of Google Apps and I don’t care if Gmail is "true cloud app" or "false cloud app". I see PLM and engineering software lives in the world of SaaS. Efficient leverage of PaaS and IaaS can be PLM cloud apps successful. Just my opinion, of course. YMMV.

Best, Oleg

*pictures are courtesy of Wikipedia and Vuuch blog

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Aras PLM lines up against Windchill, Enovia, and TeamCenter

May 7, 2011

A week ago, I came back from ACE 2011 (Aras Community Event 2011), which took place in Detroit, MI. Let me propose a very provoking statement: Aras Innovator is on move to replace full fledged PLM products such as TeamCenter, Enovia / MatrixOne and Windchill. Over the 3 days, Aras presented technology, vision and community of people working with Aras Innovator. You can get the highlights and download presentations by navigating to the following link.

Aras: Business Changes and Customization

In the keynote session, Aras’ President and CEO, Peter Schroer, presented the vision of open PLM platform with the ability to maintain a consistent pace of changes during the implementation cycle. Changes are inevitable. For the last years PLM vendors developed strategies to provide out-of-the-box PLM implementations. Aras put focus on “supporting organizational change”.

In addition to that, Aras put a significant focus on their support of Software Customization. Customization of PLM software (and not only PLM), is an important factor impacting PLM implementation TCO. Aras is focusing on how to support customization, and it relates to the Aras Innovator platform capabilities.

Aras and Integration Stories

Integration is an important element of every PLM strategy and implementation. There are multiple aspects of integrations – desktops, CADs, PLM systems and ERP systems. Aras presented a very broad scope of integrations and integration technologies. (note: I was a bit surprised to see existing PLM systems defined as “legacy”).

Aras Innovator introduces multiple APIs and technologies to support integration with different products.

Aras Platform Vision

Started as Windows and Microsoft only, Aras is introducing a broader support of the databases, browsers and other platform-related elements. It was presented as a mix of reality and vision, which not allows you to see what is really happening today. It is clear, Aras is moving towards Linux and broader support of browsers and mobile devices.

Aras Platform and Community

Community and collaborative development are a very interesting aspect of Aras growth strategy. Few slides below shows Aras platform strategy, vision and way to grow solutions by involvement of “community” of partners. As you remember Aras Enterprise Open Source allows to everybody to develop and deploy solutions on top of Aras Innovator. License hassle is minimal.

What is my take on ACE 2011 and Aras Innovator?

Aras is definitely moving towards crossing paths with PLM like Windchill, Enovia, TeamCenter. Is it possible to displace large PLM system with Aras today? My answer – it depends. The PLM implementation scope is varied, and every implementation can be different. Therefore, I specially liked the community oriented approach of development. This is something that can make a difference. On the side of platforms and integrations – time will show if Aras will find a balance between throwing resources and effective delivery. This is a big challenge. Just my thoughts…

Best, Oleg

Disclosure: Aras paid for my trip to ACE 2011.

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Closed Thoughts About PLM Openness

June 29, 2010

My post Open vs. Closed PLM Debates last week and related Fortune CNN Money Blog article by Jon Fortt – Chrysler’s Engineering Software Shift created some very interesting experience for me. The level of interest, especially the amount of comments, is one of the things that drive my analyzes after actually post published. The special experience I’ve got with this blog post was that I got most of the comments by email and not on the blog website. It made me think, may be about additional issues related to the “openness and PLM” that I didn’t discover before. So, I decided to pull some of my thoughts about PLM and Openness here and see if we all can generate a reasonable discussion about that.

Are We Open?
I think, CAD/PLM lives in the world of competition on openness. The question “Are We Open?” sounds as a wrong question to me. In my view, there is no Black & White in openness. The issue of openness needs to be related to the specific characteristics of software that can be measured. The examples of such characteristics are – Open API, support for existing standards, availability of software for customization and extension, ability to publish or exchange information about data models and file formats, etc. I think, we can collectively come and find more characteristics. A special characteristic of openness is the open source, and it needs to be analyzed separately, in my view.  So, in order to get an answer on the question “Are We Open?”, we need to come and analyze various aspects of software.

PLM and Integrated Software
I’d like to emphasize the topic of “integrated software” in the context of discussion about openness. It is a tricky one. Enterprise Software, in general, as well as CAD and PLM software specifically is growing and the question of integrating different pieces of software becomes more and more important. Customer demands are to have a better integrated software and software vendors (especially a big ones) are focusing on the questions how to make it happen. Sometimes it comes to the point where pieces of software that before had a weak connection becomes tightly integrated and dependent. Is it a good thing? I think, it depends… The latest debates about DS V6 platforms and tight connection between CATIA and ENOVIA are actually coming to this point, in my view. I think, the intent of DS is to provide “best integrated software”. Does one size fit all? I think, DS engineering wizards definitely had in their mind a question how to create a next level of CAD and Data Management functions in a single box. I can see similar trends also coming from other CAD/PLM vendors.  The best non-PLM association I’d like to come with is Apple platform. When it comes to the unique experience customers are having with Apple product, you can make a compromise on openness of the platform. Will it continue for the long run, I don’t know? However, I see these strategies work for Apple these days.

PLM Openness and Customers
I think, this is a real measure of your openness. Whatever you do is for customers and not for competitors. Customers need to have an ability to define what are their openness needs. The reality I see on a customer side is that nobody is using CAD and PLM software coming from a singe vendor. The maturity of industry will be measured by the ability of vendors to come to the compromise of how to serve customers with the best performing software. How vendors can achieve it? It is a very good question… However, it shows the overall maturity of the industry.

What is my conclusion? I think, openness is ready hard. To play this game right, you need to see both worlds at the same time – customers and competitors. And this is the exact order how to see it. My bet is that openness wins for the long run. I think, we will see more software that will be measured by how it performs for customers. One of the performance characteristics will be how information managed by the software can be open and available for Pull (I’m going to post more about the “Pull” in the future) . It will be the end of “openness competition”. Just my thoughts…

Best, Oleg

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PLM Competition and “MEH”?

June 11, 2010

I’ve been reading SolidSmack post – Jim Heppelmann. Dassault Arrogant Competition. Siemens Invisible. This post made me think more about competition.  Competition is very important and this is a part of any healthy industry. So, I want to suggest a short discussion about PLM competition and modern competitive strategies. The way companies behave, can show what are their motto, believes, technological position.

Blue Ocean Strategies
If you haven’t had chance to read this book, I highly recommend you to do so. In my view, it can be considered as a modern “bible of competition”. You can find lots of interesting examples from the past and present about how companies managed their competitive strategies. The blue ocean metaphor explains the world of competition-less, where companies are focused on untapped market places, new opportunity for growths and compare it with the dominant competition strategy (red-ocean) of finding ways to cut costs and growth by taking a market share from competition.

MEH and Competition
Relax, ‘MEH’ is not a new PLM  TLA (three letter acronym) for a new super technology that will outperform all other competitors. Take a look in urban dictionary definition of “meh”. It states for “Indifference; to be used when one simply does not care.” It seems to me, MEH is going to be a new way to compete in the world when software will be available for PULL and vendors will stop PUSHING it to potential customers. I want to credit Steven Arnold KMWorld article about Google and their MEH strategy in mobile phone space. Time will show if Android will be able to outperform iPhone and RIM. This is an interesting perspective, though.

PLM Competition
PLM and associated space of CAD, CAM, CAE is not simple from a competition standpoint. In my view, the most problematic aspects of PLM-related competition are customer’s lock-in on software, sotware versions, data formats. Cost of change (or switch to a competitor’s solution) is another thing that plays as a competitive factor. On the other side, customers are starting to be tired of such competition and looking for alternatives to get the job done.

What is my short conclusion today? I think, PLM market is too focused on competition and less focused on customers. To be able to listen to customers is probably the first tool to win a competition game. PLM competition needs to learn from how to win over customers and not over competitors. This is not a simple shift. However, this is one that needs to be done to make PLM associated industry stronger.

Just my thoughts..
Best, Oleg

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