Saas: PLM & the Extended Enterprise

I have written two pieces already, discussing the Extended Enterprise:

– SaaS: Webex and the Extended Enterprise

– SaaS: CRM and the Extended Enterprise

In addition, I wrote CAD / PLM Shuffles, discussing the changes in the Product Lifecycle Management marketplace.

In this article, I want to discuss the opportunity for the CAD / PLM industry to reorganize itself around the Extended Enterprise trend.

To comprehend the full magnitude of this opportunity, you have to understand how Globalization and Outsourcing have created a multi-tiered design chain up and down the product lifecycle at almost all industry segments where products get built. Be it Automotive, where this phenomenon is mature, and a multi-tiered supply chain has been in place for decades already, or elsewhere, where the phenomenon is more recent, the fragmentation is only becoming more acute.

To add to the complexity of the product lifecycle, there is a distinct other trend: electronics and mechanical used to be two distinctly separate industries, that are now converging, and Electromechanical designs are becoming more and more ubiquitous. This includes not only Consumer Electronics and Automotive, but also Industrial Manufacturing.

Thus, Collaboration in this fragmented Design / Supply Chain is essential, at the same time, infinitely complicated. Each tier of designers / suppliers have their own individual sets of file / data / document / application / desktop sharing needs, security concerns, compliance requirements, etc. One of the biggest challenges in this picture is the fact that CAD files are inherently large, and CAD applications are heavy.

So far, the existing PLM vendors are still operating in the old model, with disjointed chasms of communication and collaboration between enterprises and their design / supply chains.

On top of this phenomenon, there exists the additional issue of CAD being a desktop software, versus the more contemporary SaaS model.

So, the industry is faced with two major sets of discontinuities: SaaS and the Extended Enterprise.

It is entirely unclear at this point which of the current vendors can respond appropriately to the changes in the marketplace. It is, however, very clear, that whichever one does, has a huge opportunity ahead to leapfrog.

This segment is a part in the series : Saas