Product Lifecycle Management Market Trends


Product Lifecycle Management Market Trends










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Product
Lifecycle Management
Market Trends

by Rochelle Shaw

Copyright 2018, Faulkner Information
Services. All Rights Reserved.

Docid: 00011218

Publication Date: 1801

Report Type: MARKET

Preview

Product lifecycle management (PLM) is a process that consists
of managing a product’s utility from conception through disposal. Typically, the
core functions of PLM systems are computer-aided design (CAD) and
computer-aided engineering (CAE), product data management (documenting
and sharing information about product designs), and decision support
(particularly related to the cost of parts and materials). Vendors are
now expanding the capabilities of their PLM applications, adding
functionality such as document management, regulatory compliance
assurance, and the ability to analyze whether products under development
will meet consumer demands.

Report Contents:

Executive
Summary

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Product lifecycle management (PLM) is a process that consists
of managing a product’s utility from conception through disposal. Typically, the
core functions of PLM systems are computer-aided design (CAD) and
computer-aided engineering (CAE), product data management (documenting
and sharing information about product designs), and decision support
(particularly related to the cost of parts and materials). Vendors are
now expanding the capabilities of their PLM applications, adding
functionality such as document management, regulatory compliance
assurance, and the ability to analyze whether products under development
will meet consumer demands. 

PLM
software is available in several forms: as standalone tools; as part of a
comprehensive enterprise system; and the most recent form, as cloud solutions. Solutions
encompass a broad area of technologies that can include many types of
software involved in creating, releasing, and supporting a product.
Applications help manage lifecycles by providing data warehouses for all
information affecting products, by automating product-related data
management, and by integrating the data with other business
processes. 

Designed to help customers more efficiently and effectively control
product development processes, this software is used primarily by major
companies in a variety of market sectors such as aerospace, automotive, consumer products, medical
devices, packaged food and beverages, pharmaceuticals, and chemicals. Those tending to benefit most from PLM include organizations that
develop complex products, frequently release new versions, and have
geographically dispersed teams working on those products.

Market
Dynamics

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PLM came into existence in industries that stressed safety and
control such as aerospace and the military. Typically, early PLM
products were standalone applications with a narrow range of
functionality, usually focused heavily on CAD and CAE functionality.
Although many standalone offerings still exist, applications have tended
to grow more comprehensive in recent years, addressing a much more
complete range of the product lifecycle. As a result, PLM has become an
enterprise application that spans multiple departments and often reaches
across multiple organizations.

Analyst firm IDC divides PLM applications into three segments: computer-aided
authoring, which includes CAD, CAM, and CAE; discrete
manufacturing, which addresses industries including aerospace, automotive, high
tech, medical devices, heavy machinery, and shipbuilding; and process
manufacturing, which covers industries such as chemical, drugs, oil and gas,
food and beverage, and paint development.

According to the Web site Product Life Cycle Management,
benefits of PLM software include:

  • Faster
    time-to-market

  • Improved
    cycle times

  • Fewer errors

  • Greater
    productivity

  • Improved
    design efficiency

  • Better
    product quality

  • Decreased
    cost of new product introduction

  • Insight
    into critical processes

  • Better
    reporting and analytics

  • Standards
    and regulatory compliance

  • Improved
    design review and approval processes

  • Better
    communication

  • Reduced
    product cost and greater profitability

  • Better
    resource utilization

  • Improved
    integration and communication with extended supply chain

PLM technology has tilted toward enterprise customers largely because
major companies in the automotive, high technology, heavy manufacturing,
medical device, and pharmaceutical sectors have outpaced the original
industries that had been the biggest users of the
technology. In these industries, the complex, rapid product development
that PLM is designed to address and offer to organizations is standard
operating procedure.

Codex of PLM Openness

The joint development of a Codex of PLM Openness
(CPO) was initiated in 2011 under the auspices of the ProSTEP iViP Association.
Founded in 1993, the ProSTEP iViP Association is an international association
with the goal of developing modern processes for efficient product data
management. The CPO version 1.0 was developed in cooperation with BMW, Daimler,
Dassault Systèmes, IBM, Oracle, PTC, SAP, Siemens PLM, T-Systems, and
Volkswagen. Now that the current CPO version is 1.4, the Core Team
comprises Airbus, Atos, AVL List, BMW, CONTACT, Dassault Systèmes, PTC,
Siemens PLM, Theorem, T-Systems, Volkswagen, and xPLM.

The CPO defines
criteria for the openness of IT solutions used in product lifecycle management.
The objective is to ensure that once data is created within a company it can be
used throughout the entire product lifecycle.

The criteria for PLM solutions include
interoperability for efficient communication, the ability to integrate (for the
infrastructure), and functional extensibility. The
CPO
community includes IT vendors, IT integrators, and IT customers. Figure 1
indicates the key aspects of PLM openness.

Figure 1. Key Aspects of PLM Openness

Figure 1. Key Aspects of PLM Openness

Source: ProSTEP iViP Association

Market
Leaders

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The PLM market has consolidated, with larger PLM-focused vendors
acquiring smaller ones, and large enterprise vendors acquiring the
traditional pure-play vendors. Acquisition has affected many leaders in this category.
Cloud-based solutions have now entered this arena.

Autodesk

Founded in 1982 as an AutoCAD software company, Autodesk acquired PLM vendor Inforbix in 2012 and announced at that
time that it would incorporate Inforbix technology for indexing,
search, personalization, and data visualization into what it then called
Autodesk PLM360. 

The product name was changed to Autodesk Fusion Lifecycle in 2016. Fusion
Lifecycle includes product data management capabilities, making it the first
end-to-end PLM solution in the cloud.

The applications are geared to small and mid-size
businesses who haven’t previously been able to afford the requirements,
including cost, of traditional PLM product lines. Since Autodesk already
has other cloud offerings, the vendor has established credibility and
reliability in that area.

Autodesk continued to expand by acquisition during 2016; the company
acquired two companies: SolidAngle, creator of "Arnold"
rendering software; and Cadsoft Computer from Premier Farnell. However,
it made no additional acquisitions during 2017.

Dassault Systèmes

Based in France, Dassault Systèmes boasts over 190,000 enterprise customers in
more than 140 countries and 100 million online users. The company offers a variety of design and
simulation products that include 3D design software, 3D Digital Mock Up,
and PLM solutions. Two products are specifically for PLM: Delmia PLM
Express, a version of Dassault’s digital manufacturing and production
software geared to small and medium-sized manufacturers; and Catia PLM
Express, a version of the Catia CAD/CAM/CAE suite also designed for PLM
use by small to mid-sized companies. Over the last several years,
Dassault Systèmes has based its PLM strategy on its 3DEXPERIENCE
platform, which allows customers to select the product development
solutions they wish to use. 

Dassault Systèmes and IBM have a tight, long-standing partnership to
cooperate on developing and marketing PLM software and services.
According to IBM, the two companies collaborated first in 1981 and later
jointly created and marketed the concept of Product Lifecycle
Management. Dassault ‘s products leverage IBM WebSphere, Tivoli,
Information Management, Lotus and Rational software, and IBM systems in order, as IBM puts it, “to provide clients with a 3D vision of the
entire lifecycle of their products.” Their long-standing partnership
includes financing options, PLM-on-the-cloud, combined infrastructure,
software and services solutions, and a competency center for
industrialization of Dassault’s solutions on IBM infrastructure. The
alliance even has its own Web site.

Dassault has also expanded by acquisition. In 2006 Dassault Systèmes
completed its acquisition of MatrixOne, then a leader in delivering
collaborative PLM solutions. That acquisition gave Dassault a boost into
additional markets, such as high-tech electronics, semiconductors,
medical devices, and apparel. Following the close of the MatrixOne
purchase, the firm was integrated into Dassault’s ENOVIA PLM
Collaborative Environment family of solutions. Dassault announced its
acquisition of Seemage, a developer of 3D interactive product
documentation, in 2007, with the intention of integrating Seemage
technology into its enterprise solutions. In 2008 Dassault announced the
acquisition of Engineous Software, planning to add its capabilities to
its SIMULIA product line. In October 2011 Dassault
announced its acquisition of composites simulation and advanced draping
simulation technology provider Simulayt Limited; formerly, the two
companies had collaborated in Dassault’s CATIA solutions. Additionally,
in November 2011 Dassault announced an alliance with French firm
Capgemini around the integration of Dassault Systèmes’ PLM Version 6
solutions; the partnership will focus on France and Europe at first,
strengthening Dassault’s presence there. 

In 2012 Dassault acquired
Netvibes, vendor of dashboard intelligence technologies, and Gemcom,
vendor of a line of mining software solutions which Dassault renamed
GEOVIA. During 2013 Dassault announced its acquisition of Realtime
Technology AG, vendor of high-end 3D visualization software, marketing
solutions, and computer-generated imagery services. During 2014 Dassault
acquired Quintiq, provider
of on-premise and on-cloud supply chain and Operations Planning and Optimization
software, and Accelrys,
provider of scientific innovation lifecycle management software for chemistry,
biology, and materials. During 2015 Dassault acquired Modelon
GmbH, maker of systems modeling and simulation content; also in 2015 the company
changed its legal status to Societas Europaea (European Company), which, it
claims, provides Dassault with a recognized and unified corporation status
throughout all countries within the European Union. In 2016 the company
purchased Computer Simulation Technology AG (CST), vendor of electromagnetic
and electronics simulation. Dassault stated at that time that it would integrate
CST solutions into its 3DEXPERIENCE platform.

The company’s most recent acquisition was in September 2017
when it announced its purchase of Exa Corporation, vendor of simulation software
for product engineering.

Oracle

In May 2007 Oracle acquired PLM pure-play vendor Agile. Now billed as
Oracle’s Agile Product Lifecycle Management, the product was updated in
June 2009 to version 9.3. This update included analytic enhancements
that include Supplier Risk Analysis, Part Risk Analysis, Product Quality
Risk Analysis, and Product Design Volatility Analysis. Other
enhancements included an enterprise PLM backbone, user productivity
tools, and additional enhancements to processes across all modules
including Product Collaboration, Engineering Collaboration, Product Cost
Management, Product Governance and Compliance, Product Quality, and
Project Portfolio Management.

Oracle tends to update Agile PLM annually; the most recent update,
v.9.3.6, was released in January 2017, and another update is expected
shortly. The product is available on Oracle Software
Delivery Cloud. Additionally, the company offers Oracle Product Lifecycle Management (PLM) Mobile for Agile,
which allows accessing PLM data on the Apple iPad.

Agile PLM’s sister product, Oracle Product Lifecycle Analytics,
provides integrated performance management, operational analytics, and
reporting, as well as pre-built best practice analytical capabilities.
It is also available on Oracle Software Delivery Cloud.

PTC

PTC offers numerous products that relate to PLM, including document
sharing tools and several computer-aided design and engineering
applications. The company’s PLM solutions feature its flagship product
PTC Windchill, which is also available in a mobile
app for iPhone and iPad. Other related applications include PTC
Integrity, an application lifecycle management that manages all global
software development processes and connects all software engineering
artifacts, and PTC Creo, a suite of design apps.

In November 2015 PTC announced PTC Windchill 11. Enhancements include
role-based apps; a new multifaceted search function; and the
incorporation of OSLC standards for easier collaboration with other
systems. PTC Windchill 11 is enabled by PTC ThingWorx technology (from
PTC’s 2013 acquisition of ThingWorx, creators of a
platform for building the running applications for the Internet of
Things [IoT]) to integrate data from physical products, Web-based
resources, and enterprise software systems.

PTC continues to expand via acquisitions pertaining to PLM. In December
2007 PTC acquired CoCreate Software, a provider of product development
solutions, stating its plans to integrate CoCreate solutions with its
Product Development System manufacturing product line. Interestingly,
Co-Create was founded as part of HP to help in its design of
copier/printer systems; it became independent in 2000 via management
buyout. A year later, in December 2008, PTC announced it acquired
Synapsis Technology, a privately held company providing environmental
regulatory compliance solutions to manufacturers. This “green”
acquisition will help PTC’s customers to improve their environmental
compliance; the company states its plans to integrate Synapsis’
technology into its Windchill platform. In 2009 PTC acquired Relex
Software, vendor of engineering software; in 2010 it acquired Planet
Metrics, whose product was billed as “pioneering environmental
impact software to help companies effectively improve environmental
performance, reduce costs, and mitigate risk”; and in 2011 PTC
purchased MKS, whose product, Integrity, is a Software System
Lifecycle Management (SSLM) solution and 4CS Service Suite, a product
that integrates warranty, service, support and service parts processes
for durable goods manufacturers, distributors, supplier and service
providers. In 2012 PTC acquired Servigistics, an
Atlanta-based firm specializing in service lifecycle management.

In August 2014 PTC acquired Axeda, developer of solutions that
connect machines and sensors to the cloud; PTC says that Axeda
complements its ThingWorx business. Also in 2014 PTVC acquired Atego,
developer of model-based systems and software engineering applications.
PTC says the acquisition enhances its portfolio of PLM and application
lifecycle management (ALM) solutions. Two additional acquisitions took
place in late 2015: PTC bought the Vuforia business, an augmented
reality (AR) technology platform, from Qualcomm; and the company
acquired Kepware, a software development company that provides
communications connectivity to industrial automation environments, so
that Kepware’s KEPServerEX, which connects disparate devices and
control systems, can become a component of the PTC ThingWorx IoT
technology platform. 

SAP

Enterprise software market leader SAP includes a PLM module in its
SAP Business Suite. Dubbed SAP PLM, formerly mySAP Product Lifecycle
Management, the offering is an enterprise caliber package whose
capabilities include CAD, project management, inter-enterprise
collaboration, quality assurance, asset management, and regulatory
compliance.

SAP released SAP Business Suite 7 in May 2009, which also updated all
of its various components, including SAP PLM. Additionally, the vendor
laid out its “road map” for PLM in 2008, stating it would improve
the application from 2008 to 2010 “by building on existing
functionality.” In April 2010 SAP added three modules to its PLM
family, including Portfolio and Project Management 5.0, Enterprise
Project Connection applications, and an application with the code name
“Edison,” an “idea management” module that helps
companies manage, evaluate, and search for ideas. The company released v.7.01 in March 2011; it is
delivered with SAP enhancement package 5 and supports alignment of the
design and development processes, embedded product compliance, and
integrated product development that includes a new user interface for
recipe management. By 2012 SAP moved all of its applications to its HANA
platform, changing the name of the suite to “SAP Business Suite
powered by SAP HANA.”

Siemens

In May 2007 Siemens AG announced its acquisition of UGS, formerly the
largest pure-play PLM software company and originally part of EDS, which
sold off the unit in 2004. Now renamed Siemens PLM Software, the unit is
part of Siemens’ Industry Automation Division and claims approximately
70,000 customers worldwide.

Since the acquisition, Siemens announced enhancements to many of the
PLM products, and the Siemens PLM Software product line now comprises
the following:

  • Teamcenter – A suite of enterprise software applications
    spanning the entire product lifecycle. Teamcenter Express is geared to small- and mid-size
    manufacturing organizations; Teamcenter on the cloud is the
    company’s latest iteration, which uses an Infrastructure as a
    Service (IaaS) model, moving some or all PLM computing
    infrastructure to a third-party cloud service provider.
  • Fibersim – A suite of software that supports all of the
    unique and complex design and manufacturing methodologies necessary
    to engineer innovative, durable, and lightweight products and parts
    made of advanced composite materials.
  • LMS – A portfolio of products and services for
    manufacturing companies to manage product development by
    incorporating model-based mechatronic simulation and advanced test
    in the product development process.
  • NX – Streamlines and
    accelerates electromechanical systems design with a solution that
    integrates mechanical, electrical, and electronic components.
  • Tecnomatix – Manufacturing process management (i.e.,
    “digital manufacturing”) tools for specific industries.
  • PLM Components – A series of individual tools for functions
    such as visual modeling, collaboration, CAD, CAE, and simulation.
  • Seat Design Environment (SDE) – Software that is fully
    integrated into commercial 3D CAD systems, for designing and
    manufacturing innovative transportation seat systems and interior
    components.
  • Syncrofit – A family of specialized engineering products
    for designing and manufacturing complex assemblies and large
    aerostructures that allows users to author and manage the assembly
    interfaces and hundreds of thousands of fasteners that are typical
    in an airframe.
  • Velocity – A unified CAD and PDM environment with full
    associativity between CAM and CAD, as well as embedded CAE in CAD,
    comprising Solid Edge with Synchronous Technology, which combines
    explicit modeling with a history-based system; Femap, a PC-based CAE
    modeling solution and finite element analysis (FEA) component; and
    CAM Express, a full function, CAD neutral, NC programming system.

In June 2010, Siemens announced a bundled PLM solution,
pre-configured, operated, and serviced by Siemens IT Solutions and
Services, with a cloud-specific “pay as you go” pricing schedule.
Called “Dynamic PLM Service,” it includes a bundled suite of
industry-specific PLM configurations based on Teamcenter (which is
licensed separately), hosting, operation of the necessary IT
infrastructure, and ITIL-compliant support services. The solution is
aimed at mid-sized industrial companies with the need for a mature PLM
solution who wish to avoid a lengthy on-premise implementation with the
usual costs and perils. In December 2012, Siemens announced it was
releasing a new 3D CAD editing tool, 3DSync, temporarily free to the
mainstream market, based on synchronous technology, which has been shown
to increase productivity by a factor of ten or more when working with
imported CAD data. In October 2013, Siemens announced the latest version
of NX, NX9, with new capabilities that include synchronous technology
for 2D to ease 2D data editing, fourth generation design (4GD)
technology to enhance design productivity, and NX Realize Shape software
with a freeform design toolset.

In 2015 Siemens acquired Polarion, developer of the first browser-based application lifecycle
management (ALM) enterprise solution. Siemens has stated its
intention to add
the Polarion offerings to its Teamcenter software. Most recently, in
2017 Siemens acquired design automation and industrial
software provider Mentor Graphics; Mentor is now  part of the PLM
software business of Siemens’ DF Division.

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Estimates of market size of this segment vary, depending on what source one
uses. For example, market research firm Transparency expects the global PLM
market to reach US$75.87 billion by 2022, growing at an annual rate of over 8
percent. 

Analyst firm CIMdata offers another opinion. They say that in 2016 the total size of the PLM market
was about $40.6 billion, up 5 percent in US dollars over 2015. In 2016 the
Americas had 37.6 percent of the PLM market, with EMEA at 34.1 percent, and
Asia-Pacific with 28.3 percent. CIMdata forecasts that the Americas region will
grow at a CAGR of 6.4 percent to reach $20.9 billion in 2021. EMEA and
Asia-Pacific will have CAGRs of 6.7 percent and 7.3 percent, respectively. EMEA
will grow to $19 billion and Asia-Pacific will reach nearly $16.4 billion in
2021.

According to CIMdata, three trends continue to influence this market:

  • The cloud
    is changing how IT resources are bought and maintained.

  • Mobile
    devices are changing rules of engagement.

  • Emerging
    technologies, like 3D printing and the Internet of Things (IoT), are creating
    new innovation opportunities in many industrial segments.

Of
these, there is little doubt that the cloud exerts the most influence on the
PLM market. Cloud portfolio
management vendor RightScale claims that 87 percent of organizations are using
a public cloud. During 2016 market research firm MarketsandMarkets estimated
that the cloud-based PLM market size would grow from US$18.65 billion in 2016
to US$40.55 billion by 2021.

Analysts appear to agree that the more cost effective and
collaborative PLM tools in the cloud will continue to influence vendors
and buyers alike in this market segment. According to Arena Solutions, a
firm that claims to have invented cloud-based PLM applications, reasons
for this are three-fold:

  • Traditional PLM tools are stressful and expensive.
  • Cloud PLM tools help reduce cost and cycle times.
  • Increases in product complexity mean that more departments within
    a given organization will require fast and realiable access to PLM
    tools.

Strategic
Planning Implications

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Research firm Gartner states that the
key to improving product life cycle performance is to
focus on one or two primary improvement goals at a time. Therefore, the
first step in making a buying decision is to determine which of an
organization’s top priorities should be improved upon.

When evaluating PLM software,
compatibility with tools currently in use is a major consideration.
Depending on the tools already in place, some organizations will be able
to implement all the functions of a PLM system by implementing
standalone applications that provide missing capabilities. Organizations
should also consider how well PLM products integrate with other types of
software in use, such as ERP applications. These complementary
technologies may be complex to integrate, requiring detailed
definitions, data mapping, and data synchronization.

Industries whose product development and management efforts stand to
receive the most benefit from PLM include the automotive, high-tech,
heavy manufacturing, medical device, and pharmaceutical sectors.
This is because the more complex a product’s design is and the more
often it is modified and re-released, the greater need its manufacturer
will have for PLM software.

Companies with comparatively simple products that rarely change will
typically find that comprehensive PLM software is unnecessary, even
burdensome. Such companies may find it beneficial, however, to use CAD
applications or other tools with specific functions that fall under the
broad definition of PLM. There are some comprehensive PLM applications
designed for small to mid-sized customers. Companies of this size may
find such applications beneficial if their processes are highly complex.
Additionally, now that PLM software is increasingly available in the
cloud, small and midsize businesses may find it more practical and
affordable than buying it outright.

PLM products are becoming increasingly comprehensive, and many
customers may consider having all PLM functions in a single, enterprise
application a strong advantage. Potential advantages include simplifying
support by using just one vendor, sharing data easily among different
functional areas (e.g., design, customer support), and the use of a
single, shared interface. These factors belong in a buyer’s
decision-making process, but there are some drawbacks of comprehensive
systems to bear in mind. Many customers may already have some PLM-related
tools in place, and these applications may be better – or at least more
suitable for that particular company – than the corresponding
component of a comprehensive system that would replace it. Making such a
replacement could also be expensive and require users to learn a complex
new application. Another possible drawback is that some vendors have
created comprehensive systems by acquiring other companies whose
software filled a gap in their own product suites. Many of these
acquisitions have been recent, so although companies may offer a
complete line-up of tools, these separate components may not be as
tightly integrated as expected.

Another consideration is whether the PLM products being considered
have templates meant to represent common processes for certain
industries, such as the automotive and pharmaceutical industries. Before
making a purchasing decision, customers should determine whether the
products under evaluation have such templates and whether these
templates are a reasonably accurate depiction of their company-specific
processes.

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About the
Author

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Rochelle Shaw is a Web designer and freelance author who has
been tracking high technology for over 30 years as a writer,
editor, and industry analyst. She is a frequent contributor to Faulkner
Information Services.

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