PLM Strategies-Resisting the Pull of the Vortex30 Nov, 2006 By: Kenneth Wong
Take the enterprise—we'll concentrate on the workgroup.
At the recent Manufacturing Solutions Media Summit hosted by Autodesk, Bob Merlo handed me his business card, coated in the shade of blue instantly recognizable as Autodesk's. It read, "Vice-President, Product Lifecycle Management Solutions, Manufacturing Solutions Division." Later, during his presentation, Merlo declared, "We're not going to go into that enterprise PLM [product lifecycle management] vortex like many of our competitors." A PLM chief with reservations about PLM? Now that's rare. So when it was time to take a look at Autodesk's lifecycle philosophy, I knew exactly who to call.
Productstream is one of Autodesk's data management solutions.
The Critical Midlife
Merlo actually sidestepped the acronym PLM when describing Autodesk products: "We have a broad range of PLM . . . well, I'll call them data management solutions," he said. All these solutions, he pointed out, are targeted at a specific phase of the product lifecycle—from design to manufacture. And they cater to a particular group—the engineering workgroup.
I couldn't resist asking him: Why is his title vice-president of PLM? Why not vice-president of PDM (product data management)? "We are in the PLM market," he responded, "but our focus today is on data management—it's a deliberate focus." He acknowledged that by concentrating on the design-to-manufacture segment, the company is excluding certain PLM components, such as market assessment during the conceptual design phase, portfolio management after product launch, aftermarket support and services and so on.
"The majority of Autodesk's installed base," he observed, "are midsize enterprises. Their view is that they need help getting to market faster, managing costs and managing innovation in engineering. They're less concerned today—they might not be so forever, but today they are—with things like market assessment, portfolio management and others." Autodesk's decision to concentrate on the design-to-manufacture portion—the midsection of the lifecycle, if you will—is driven by its customers' current priorities more than anything else.
Data Management, Autodesk Style
"Whether you talk to [industry analysts from] Gartner or AMR, they'll tell you that no one today provides the full breadth of PLM capabilities," Merlo remarked. Thus, in his view, PLM pursuits will inevitably involve products from a number of vendors. Dassault Systemes might dispute that. On the products and solutions section of its corporate Web site, the company boasts that its offerings "support industrial processes and provide a 3D vision of the entire lifecycle of products from conception to maintenance" [italics added for emphasis].
"Covering the entire spectrum of capabilities is exactly the problem enterprise PLM providers have faced in the past—forcing too much down the throats of the users," said Merlo. It is, in his words, a "top-down" approach. In contrast, "[Autodesk's] solutions are being adopted more readily and used more effectively because we supply a solution directly beneficial to the end user (design engineer) and therefore a bottom-up approach," he added.
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So rather than trying to cover the entire lifecycle at the enterprise level, Autodesk has made a conscious choice to focus on the engineering workgroups, engaging primarily in iterative design processes before release to manufacture. To that end, Autodesk gives its users two alternatives for data management: Autodesk Vault and Productstream.
Included at no extra cost with Inventor, AutoCAD Mechanical and AutoCAD Electrical, Vault facilitates the organization of engineering data in a centralized repository for easier search and reuse. Merlo said, "Customers who have a good handle on their data, those who have done a decent job of managing it in the past—they're capable of getting their content into Vault without intervention from Autodesk or any of its partners. But if they've not been that disciplined in the past and have lots of different sources, they might need to deploy content-migration services either from Autodesk directly or from reseller partners." In that case, a standard implementation package may cost from $2,000 to $7,000, depending on the complexity of the job, the volume of data involved and the level of training desired.
Vault also is a prerequisite to Productstream, a product that "automates the release-management process by managing engineering changes and bills of materials [BOMs]," in Autodesk's description. Merlo explained, "[Productstream] helps you manage the release of engineering change orders and BOM structuring." He also cautioned, "It's not an enterprise-level system—not meant to be. For customers who are looking for best practices in a box, Productstream is the right solution."
Strapping a COMPASS on Productstream
Productstream in its current incarnation is centered on items and parts, but Merlo said, "We'll expand that capability so it has a document-centric view, and we want to introduce better connectivity so design teams from disparate geographical locations can work together."
For clients who require a customized PDM solution with tight integration with other business systems and full data replication across locations, Autodesk will leverage COMPASS, from the European PDM vendor of the same name, which Autodesk acquired in 2005. Productstream COMPASS, now available in the European market, offers "replication capabilities and high-level customization features," Merlo pointed out.
Seek Out New Life, New Civilizations
Joe Barkai, program director for Manufacturing Insights PLM strategies research service (www.manufacturing-insights.com), observed, "The focus on the SMB (small to midsized business) space and moving to a subscription-based model seem to be working well for [Autodesk]. However, UGS and Dassault, as well as ERP (enterprise resource planning) software vendors, are also eyeing the SMB space. Autodesk should identify new verticals that are perhaps more typical of SMB and apply their experience and tools to create new value for these industries, which may include retail, apparel, consumer goods and others."
Autodesk's compulsory subscription model may work in the company's favor, but among users, reception is mixed, to say the least. The short release cycle (every 12 months instead of every 18–24 months) and the comparative costliness make some users grumble; for one thing, they don't look forward to the disruptiveness of yearly upgrades. (Read "Cadalyst Readers Balk at Yearly AutoCAD Upgrades" by Sara Ferris [www.cadalyst.com/daily63006] and "AutoCAD Subscription: Another View" by Steve Johnson [www.cadalyst.com/daily7606].)
And in the SMB data management space, Autodesk faces competition from the smaller, nimbler vendors such as Agile Software and Arena Solutions. Both Agile and Arena offer PLM modules as on-demand solutions at around $100 per user per month—an appealing pricing model, especially for the small business portion of the SMB space. But neither Agile nor Arena offers an authoring environment, namely the CAD portion of PLM. That's either a major deficiency or an insignificant issue, depending on how tightly integrated you want your data management and data-authoring environments to be.
Merlo said, "I think [the on-demand approach] is an interesting business model. It's something we've been looking at to determine whether it makes sense for our account base, and if it does, when."
The Shrinking, Expanding PLM Universe
Is the PLM universe shrinking or expanding? You might argue that it's doing both. Some industry watchers point to a series of well-publicized acquisitions—most notably, Dassault's purchase of MatrixOne—as proof of market consolidation. According to analysts from AMR Research, the vast PLM space eventually will be reduced to a smaller, tighter galaxy dominated by three big planets: Dassault, PTC and UGS ("MatrixOne Acquired by Dassault Systemes—PLM Consolidation Close to an End," March 2, 2006, www.amrresearch.com). On the other hand, neither the vendor community nor the analyst crowd has reached consensus about where exactly the lifecycle begins and where it ends, so everyone can stretch its ambiguous limits and exploit its commercial potentials. This borderless PLM universe can indeed be a vortex, and peripheral vendors teetering on its brink risk being sucked into it.
So Autodesk is keeping its distance from the vortex, choosing instead to remain on the terra firma known as CAD and PDM. But you can bet Autodesk is monitoring its customers' navigation patterns. The moment they show signs that they're adventurous enough to go beyond the frontiers of traditional data management, Autodesk will follow them into the vortex. After all, the vortex also holds a goldmine. By market watcher CIMdata's most recent estimate, approximately $27 billion will be floating in the vortex by 2010 (CIMdata, 2006 PLM Market Analysis Report).
Kenneth Wong is a former editor of Cadence magazine. As a freelance writer, he explores innovative usage of technology and its implications. E-mail him at Kennethwongsf at earthlink.net.