PLM Open Source Future – Cloud Services?

February 17, 2014

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For the last few years, open source was one of the major disruptive factor in tech. Open source powers world’s leading tech companies. Tech giants like Google, Facebook, Amazon and many others would not exist without open source. The success of RedHat put a very optimistic business projection on the future disruption of industry by open source. Since then, we’ve seen many companies that started their business trajectory as “Red Hat of XYZ” with the objective to disrupt a particular industry segment. Many of them became very successful in what they do. However, what happened with their “open source” messages?

My attention was caught by two articles speaking about current trajectories of companies building their business model around Open Source software. Peter Levine, partner at Andreessen Horowitz started this conversation in his – Why There Will Never Be Another RedHat: The Economics Of Open Source and ReadWrite article was following TechCrunch article – Why Open Source Is Disappearing From Open Source Companies? Have a read – good articles with lots of interesting examples and data points. According to the Peter Levine, the main reasons why open source companies cannot compete successfully with their proprietary rivals are simple – money and inability to keep stabilized roadmap development. Here are two notable passages from TechCrunch:

There are many reasons why the Red Hat model doesn’t work, but its key point of failure is that the business model simply does not enable adequate funding of ongoing investments. The consequence of the model is minimal product differentiation resulting in limited pricing power and corresponding lack of revenue. As shown below, the open source support model generates a fraction of the revenue of other licensing models. For that reason it’s nearly impossible to properly invest in product development, support, or sales the way that companies like Microsoft or Oracle or Amazon can.

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And if that weren’t tough enough, pure open source companies have other factors stacked against them. Product roadmaps and requirements are often left to a distributed group of developers. Unless a company employs a majority of the inventors of a particular open source project, there is a high likelihood that the project never gains traction or another company decides to create a fork of the technology. The complexities of defining and controlling a stable roadmap versus innovating quickly enough to prevent a fork is vicious and complex for small organizations.

ReadWrite article brings list of companies started as “open source” and moving now towards different messages.

In 2010, SugarCRM’s main landing page prominently advertised itself as open source. Today? Not a single mention. In February 2009, Alfresco declared itself “the open source alternative for Enterprise Content Management.” No mention of open source on the home page today. The same goes for Acquia, the Drupal company (see 2009 vs. today), and most every other significant company that sells support or software around an open-source project.

PLM industry has their list of open source companies. You can count several product today branded themselves as “PLM open source”. The most notable, Aras created innovative model called “Enterprise Open Source”. To core part of Aras was never open sourced. However, Aras developed significant community network of supporters implementing Aras Innovator software and building applications on top of Aras core platform. Aras keeps fairly large reference customer base supporting and advocating for Aras enterprise open source strategy. According to them, it brings predictable license cost model combined with open software platform, which differentiate Aras from other PLM companies.

TechCrunch article made me think what will be the future turn in development of PLM open source? Would “cloud services” become a future strategic exit for Aras and other open source PLM companies? According to Mr. Levine, SaaS and appliance business model can be a good match to Open Source projects. Here is a formula:

This recipe – combining open source with a service or appliance model – is producing staggering results across the software landscape. Cloud and SaaS adoption is accelerating at an order of magnitude faster than on-premise deployments, and open source has been the enabler of this transformation.Beyond SaaS, I would expect there to be future models for Open Source monetization, which is great for the industry.

What is my conclusion? There is no clear conclusion today. In my view, PLM industry is still waiting for big “disruption moment”. Will it come from cloud PLM alternatives, open source PLM provided as cloud services or just service projects using open source software? Time will show. It seems to me “value” and “maturity” are two main differentiations PLM companies need to focus these days. Just my thoughts…

Best, Oleg


PLM, Platform Wars and Software Renaissance

March 12, 2013

Technology is one of my favorite topics. Imagine you want to develop a completely new PLM system. Not a new version of existing PLM product from vendors like Dassault, Siemens PLM, PTC and even Autodesk. Imagine you don’t need to be limited to any restrictions – existing software, historical choices, customer base. What will be your "platform decision"? Even 10 years ago, this question was easy. Microsoft dominance was almost absolute. Windows was considered as a universal platform. The decision variation was around database technology (Oracle, MS SQL or DB2) and few options of web servers and middleware.

These days, the situation is completely different. The amount of "platform choices" is growing exponentially. I’ve been reading TechCrunch article – Bring On The Platform War. I found it interesting. Take few minutes and have a read. You will discover endless list of buzzwords and platform name. Here is the passage I specially liked:

Nowadays, though, while the tools and technologies we use have improved enormously…imagine, God forbid, that you’re building some sort of web service. Should you use Ruby on Rails? Node.js? Python and Django? PHP and Drupal? .NET? Any of the panoply of Java servers? Something new and cool like Go or Scala? And how/where will you host your code? Amazon? Heroku? App Engine? Joyent? EngineYard? Force.com? How about your app? You’ll have an app, right? On which platforms? Native code? Hybrid HTML5? Cross-compiled with Xamarin? And then there’s your database

The mind gibbers and reels with analysis paralysis. It’s almost enough to make me miss the bygone days of Microsoft’s dominance. Is a mediocre standard better than an industry splintered into a dozen excellent fragments? Is a single authoritarian government better for its citizens than a dozen city-states set against one another in perpetual civil war? And, wait, isn’t better software supposed to make life simpler?

I made me think about PLM development these days. Most of PLM platforms and products were developed 12-15 years ago. These products have long lifecycle, customer base and long list of commitments. Nothing wrong with that. Customers are always good. However, on the opposite side, the real challenge for all these vendors is to take an alternative parallel path and develop new products with a new technologies. Lifecycle is not only about manufacturing product management by PLM software, but it is also about PLM software itself. Software becomes old and requires re-write. It is like a house that you can remodel, but once in a while, you need to demolish the house and build a new one.

What is my conclusion? I agree with TechCrunch article – we live in software renaissance era. It related to software platforms, databases, web, programming languages. The years of "refurbished remodeling" are in the past. Now it is a time to come with a new options and build a new stuff. The biggest challenge in PLM (as well as other enterprise software) is long lifecycle of products and system implementations. The bigger company – the longer PLM software lifecycle. Smaller companies have low barrier to change and they can experiment with new software, platforms and packages. The same I can say about makers revolution – these people and companies are open to choose new tools. Just my thoughts…

Best, Oleg

Image courtesy of [thephotoholic] / FreeDigitalPhotos.net


Investors are looking for “cool PLM kids”

January 30, 2013

For many years, enterprise was considered as a boring space. It was so much fun to talk about web, gadgets, Google and many other "cool" things. Why to get worried about enterprise application? Most of the people might think enterprise isn’t sexy thing. Isn’t it just about ERP, finance, big bosses and decisions that taken somewhere on the management floor? What was visible for the last ten years is huge technological development in the space of web, internet, mobile and consumer applications. This is what people were blogging and talking about. This is where all efforts and technological minds were striving. Consumer IT was "on fire" during the decade of 2000s. Our life and state of mind changed with web, mobile devices and other cool apps. Last year, I posted – PLM: Ugly vs. Cool. Quite many people approached me after that post. It was very enlightening to see how big is demand of people for usability, ease and simplicity of enterprise software.

Nowadays changes are coming to enterprise space too. There are many confirmation about that. I was reading TechCrunch article – The Enterprise Cool Kids. Author is speaking about growing interest of investors to enterprise space and brings long list of startup companies focuses primarily in enterprise space. Here is my favorite snippet:

But the hype is changing. Conversations about “the next Instagram” at Coupa, The Creamery or on Caltrain have been replaced with staid assessments about the future of Big Data, storage and the cloud. The mobile, social, local gold rush of 2011 has been put on pause, at least as far as consumer Internet is concerned. VCs are staffing up with enterprise experts to handle the sharp shift in focus. We’ve even heard someone was working on something described only as, “a Path for enterprise.”

Some of the technologies developed by these companies can be relevant for manufacturing, product data management and PLM. Take your time and read the article. The examples of companies and use cases are very interesting. I captured three top common differentiators among these companies – ease of use, low cost and "coolness factor" in the way these companies are solving existing problems.

What is my conclusion? I see enterprise as a very interesting place these days. The amount of unsolved problems in the enterprise space is skyrocketing. Think about mobile phone 10 years ago. Then compare it with iPhone or Android. The majority of manufacturing companies are running software developed 15-20 years ago. Excels are everywhere. Now, imagine the potential to change it. Investors are looking for enterprise experts. I didn’t find companies associated with manufacturing and PLM in the TechCrunch list of enterprise cool kids. So, quest is open. We are going to see "cool PLM" coming sooner or later. Just my thoughts…

Best, Oleg

picture courtesy of TechCrunch article.


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