A new generation of cloud computing models aims to address
In the spirit of most enterprise applications, PLM requires some heavy lifting from a deployment standpoint. It spans a variety of related applications, demands cross-functional buy-in and cooperation, prescribes a hefty dose of business process transformation, and more often than not, requires a sizeable investment in outside consultants to oversee both the technical and organizational aspects of the implementation.
There is also the cost barrier to PLM deployment. As an enterprise application, PLM requires a significant investment in server and networking infrastructure as well as an IT staff that is trained and available to administer the system and deliver support. As with any traditional on-premises enterprise product, PLM incurs substantial licensing and maintenance fees.
Putting PLM in the cloud has the potential to change that equation, according to its proponents. While PLM's transition to the cloud has been slower than most enterprise platforms, a fresh wave of built-from-the-ground-up cloud-based offerings from newcomers and many of the stalwart PLM vendors is starting to build momentum for the new delivery model. According to research by TechNavio, the PLM market is expected to hit a 9.7% compound annual growth rate between 2011 and 2015, with cloud-based PLM applications driving much of the activity.
Solving PLM challenges opens doors for SMBs
Small and medium-sized companies, in particular, are good candidates for cloud-based PLM because on-premises systems have been historically out of their reach, noted Tom Davis, CEO and founder of Solair, an Italian startup offering a cloud-based PLM product.
"There are plenty of studies showing the benefits of PLM, but the problem is how to make those benefits accessible to more people," Davis said. "A lot of companies don't have the money to invest upfront in the hardware or consulting required for PLM. They don't have large IT organizations. They don't have several years to get an implementation working. That's part of the cloud value proposition."
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MariCorp U.S., a company that builds marinas, was exactly at that crossroads. With engineers and sales people constantly on the road, the 30-person company needed to establish a centralized platform for its design information while facilitating collaboration across of chain of external and internal project stakeholders, according to Luis Cuestas, the company's IT manager.
"We were not a candidate for traditional PLM," Cuestas said. "We are still a young company, thus couldn't think in terms of an enterprise solution on that scale."
What did work for MariCorp was Autodesk PLM 360, a cloud-based offering that enabled non-engineering users to conduct design reviews and collaborate with customers, all from within a standard Web browser. "From an IT perspective, there are a million less headaches," he said. "And presenting the tools within a standard Web browser helped overcome a lot of potential hesitation and dragging of feet to adopt new technology."
PLM challenges remain
Many potential users still have some questions surrounding PLM in the cloud, specifically related to uptime and the security of a company's core design intellectual property. "So few applications running in the cloud have the same set of functionality you come to expect from CAD or related products," explained Monica Schnitger, president of Schnitger Corp., a market research firm specializing in the areas of PLM, computer-aided design (CAD) and computer-aided engineering. "There are issues related to refresh and latency."
Security, historically the number one barrier standing in the way of any cloud deployment, is quickly becoming a non-issue as companies get more familiar and comfortable with the cloud as a software delivery model, according to Jim Brown, president of Tech-Clarity, a consulting firm.
"Most companies can't afford to hire the kind of security experts the cloud companies can afford to hire," he said. "Most companies will find that cloud companies are more secure than what they can do in house."
While overall interest in the cloud is escalating, Brown and others contend, it's just another delivery model for PLM. They say it's not the only option for companies looking for easier and more effective ways of promoting innovation and collaboration on product development, compared with what's been possible with traditional on-premises software.
"I don't think there's any PLM vendor out there that isn't in some way, shape or form taking advantage of the Internet," Brown said. "There are lots of ways to collaborate over the Internet that are not officially cloud. Does it make it easier and more inherently social when it's a cloud-based PLM application? Yes. But the cloud isn't required to do that -- it's just a modern technology infrastructure."
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This was first published in December 2013