Mid-market PLM – what did I learn in 2009 ?

Like many people, the meditation of the dark Christmas days and the various 2009 reviews give you a push to look back and reflect.  What happened and what did not happen in 2009?

And what might happen in 2010?

Here my thoughts related to:

ERP-related PLM vendors

Here I think mainly about Oracle and SAP. They have already identified PLM as an important component for a full enterprise solution. They are further pushing their one-shop-stop approach . Where Oracle’s offering is based on a set of acquired and to-be-integrated systems, SAP has been extending their offering by more focus on their own development.

If you are one of those companies that require PLM, and believe all software should come from one vendor (beside Microsoft), it is hard to decide.

As there might be real PLM knowledge in the Oracle organization as an effect of the acquisitions, but is it easily accessible for you? Is it reflected in the company’s strategy ?
With SAP I am even more in doubt; here you might find more people with ERP blood having learned the PLM talk. Maybe for that reason, I saw mostly Oracle as a PLM option in my environment and very few SAP opportunities for real PLM.

I assume in 2010 Oracle will push stronger and SAP try harder.

CAD-related PLM vendors

In this group you find as the major players PTC, Siemens and Dassault Systems. Autodesk could be there too, but they refuse to do PLM and remain focused around design collaboration. All these PLM vendors are striving to get the PLM message towards the mid-market. They have solutions for the enterprise, but to my feeling, most of the enterprises in the traditional well-know PLM markets, like Automotive and Aerospace, are in a kind of stand-still due to economical and upcoming environmental crisis.

It is sure business will not be as usual anymore, but where will the sustainable future go? Here I believe answers will come from innovation and small mid-market companies. The bigger enterprises need time to react so before we see new PLM activities in this area it will take time.

Therefore all PLM vendors move in directions outside engineering, like apparel, life sciences, and consumer packaged goods. These industries do not rely on the 3D CAD, but still can benefit from the key building blocks of PLM, like lifecycle management, program and portfolio management and quality/compliancy management.  The challenge I believe for the PLM vendors is: Will these CAD-focused organizations be able to learn and adapt other industries fast enough? Where does 3D fit – although Dassault has a unique vision here.

For the mid-market, the PLM vendors offer more OOTB (Out Of The Box) solutions, mostly based on limited capabilities or more common available Microsoft components like SharePoint and SQL Server. This is not so strange as according to my observation, most smaller mid-market companies have not really made or understood the difference internally between document management and product data management, including Bill Of Materials not to be managed in Excel.

I assume 2010 the CAD related PLM vendors initially will focus on the bigger enterprises and new industries, the smaller mid-market companies require a different approach

PLM-only vendors

This is an area which I expect to disappear in the future, although this is also the area where interesting developments start to happen. We see open source PLM software coming up with Aras leading and we see companies coming up with PLM on-demand software, Arena as the first company to sell this concept.

The fact that the traditional PLM-only vendors disappeared in this area  (Eigner bought by Agile, Agile bought by Oracle, MatrixOne bought by Dassault Systems) indicates that the classical way of selling PLM-only was not profitable enough.

Either PLM needs to be integrated in companywide business processes (which I believe), or there will be PLM-only vendors that find a business model to stay alive.

Here I hope to see more clarity in 2010

Smaller mid-market companies

What I have seen in the past year is, that despite the economical crisis, PLM investments by these companies remained active. Maybe not in purchasing much more licenses or implementing new PLM features. Main investments here were around optimizing or slightly extending the PLM base. Maybe because there was time to sit still and analyze what could be changed, or maybe it was planned but due to work pressure, it was never executed. Anyway there was a lot of activity in this area not less than in 2008.

An interesting challenge for these mid-market companies will be to remain attractive for the new generation. They are not used to the classical ways of structured work as most of the current workforce is used to.
Social networking, social PLM, I have seen the thoughts, discussions and benefits, still trying to see where it will become reality.

2010 is another chance.

Sustainability and going green

This is an area where I am a little disappointed and this is perhaps not justified. I would expect with the lessons learned around energy and the upcoming shortage of natural resources, companies would take the crisis as a reason to change.

To my observation most of the companies I have seen are still trying to continue as usual, hoping that the traditional growth will come back. The climate conference in Copenhagen also showed that, we as human beings, do not feel pressured enough to adapt, by nature we are optimists (or boiling frogs).

Still there are interesting developments – I assume in the next few years we will see innovation coming – probably first from smaller companies as they have the flexibility to react. During the European Customer Conference in Paris, I heard Bernard Charles talking about the concept of a Bill Of Energy (The energy needed to create, maintain and demolish a product) As PLM consultants we already have a hard time explaining to our customers the various views on a BOM, still I like the concept, as a Bill Of Energy makes products comparable.

2010 the acceptance of Bill Of Energy

Here I want to conclude my post for this year. Thank you all for reading and sharing your thoughts and comments with this community. My ultimate conclusion for 2009 is, that is was a good PLM year for the mid-market, better as expected but the changes are going slow. Too slow – we will see next year.