PLM evolution beyond SaaS

In my What is PLM Circa 2020s article, I talk about how I see the future of PLM development. The previous generation of PLM systems was designed on top of an SQL database, installed on company premises to control and manage company data. It was a single version of the truth paradigm. Things are changing and the truth is now distributed. It is not located in a single database in a single company. It lives in multiple places and it updates all the time. The pace of business is always getting faster. To support such an environment, companies need to move onto different types of systems – ones that are global, online, optimized to use information coming from multiple sources, and capable of interacting in real-time.

The Role of Cloud Technology

Cloud technology is now driving two important aspects: the ability to deliver products globally and to introduce a new business model of Software as a Service (SaaS). PLM first leveraged networks, allowing data to be centralized – this was a big step for PLM technologies to focus on a single version of the truth. Then hosted cloud servers made the next step of simplifying access and reducing IT work. Cloud technologies are now redefining PLM by introducing globally available applications that are shared by many companies.

Evolution – Database, Hosted Cloud, multi-tenant SaaS.

The trajectory of PLM development for the last decade was heavily influenced by cloud development. The old school database-driven architecture was migrating to IaaS and private hosting. To support virtualization was the key element during these steps of development. We’ve got existing PLM systems hosted on AWS, Azure and private hosting services. The technology worked, but it was a royal pain to manage all “tenant” servers and then “tenant” databases. Imaging 10,000 customers and 10,000 databases. It is an operational nightmare.

Multi-tenant system and data architecture solved the problem. The data as well as servers are shared now. So, customer data and customized settings are not more than just data record in the large multi-tenant system optimized to use the data. The data services also migrating from generic database usage to more specific “polyglot persistance” data management and micro-service architecture.

What is next – Platforms and Data Services

While the majority of PLM production setups are still large single-tenant PLM systems, new cloud CAD and PLM systems are using micro-service and multi-tenant architecture.

Today, multi-tenant system architecture provides significant advantages for medium-sized and small companies, thanks to unit economic and subscription business models. The remaining question is about the future trajectory of multi-tenant architecture and support of large enterprise PLM deployment and tiers of suppliers.

In my article – What PLM can do not to miss the digital future, I discuss digital identity, digital assets, and new business models. These are elements of the future PLM architectures. The current business model is to lock the data and upsell the applications and services. While it works for large enterprise systems, the question about interoperability, openness, and communications is largely unsolved. The future fundamental shift is possible by providing data services and monetization of data. Think about the data as “utility” similar to the electricity of internet services. If such a model can be discovered, it will open PLM technology development to the next spiral of cloud development.

What is my conclusion?

Multi-tenant SaaS applications will make PLM widely adopted. Small and mid-sized companies will be able to start using SaaS PLM and get rid of messy Excels. Once it is done, the transformation of larger PLM environments will start. To solve it, the problem of data sharing must be resolved not only from a technological standpoint but also on the level of business models. It will unlock a huge value of business information and provide a foundation for building intelligent engineering and manufacturing applications. It includes many mechanisms of security, data ownership, IP, and communication. The transformation will happen first by establishing clusters between OEMs and their Tiers, later moving towards global networks and data services. Just my thoughts…


Oleg Shilovitsky

Co-founder and CEO of OpenBOM developing cloud based bill of materials and inventory management tool for manufacturing companies, hardware startups, and supply chain. My opinion can be unintentionally biased.

This content originally appeared on Beyond PLM

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28th June


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