CIMdata Releases New PLM Market Report

Market watcher sees growth in markets traditionally not associated with PLM.

• Module 1, overall market statistics and an analysis of PLM suppliers' performance in 2007

• Module 2, a summary of the 2007 revenue results and forecasts from 2008 to 2012 by geographic regions and industry segmentation

In April, CIMdata published a complimentary report titled "PLM Market Growth in 2007, A First Look in March 2008 — Exceeding Expectations." In it, the authors observed that the worldwide comprehensive PLM market experienced a stronger-than-expected 13.5% growth rate to reach an estimated $24.3 billion in 2007 for software and related services, and that mainstream PLM growth was expected to continue its steady climb over the next five years, increasing at a compound annual growth rate of just over 10% and expanding the market size to more than $25 billion by 2012.

Ken Amann, CIMdata's director of research, said that part of the growth is driven by "good strength in the process industry, utility, and growth in nontraditional markets, such as finance, services, retail, and footwear and apparel."

According to CIMdata's supplier ranking by revenue, Dassault ranks first, followed by Siemens PLM, PTC (listed with its new acquisition CoCreate), SAP, and Oracle (listed with Agile). The report's authors note, "The revenue generated by IBM's Dassault-based PLM services business is a significant contributor to Dassault's market presence."

"Smaller companies like Arena Solutions continue to grow," said Amann. "We're seeing a greater shift to the mid-market [comprising companies with annual revenues of $1 billion or less], which is becoming a greater segment. Vendors are more aggressively going after this marketplace. The smaller the company, the more focused the solution has to be, and the more complete the package has to be, because these companies have very little money to spend on services and support."

In regional breakdown of the market, CIMdata's report attributes 39% to the Americas (up 9.4%), 38% to Europe, Mideast, and Africa (up 7.5%), and 23% to the Asia Pacific (up 11.7%) sector.

"We think AP will continue to grow," Amann predicted. He noted AP's growth would be conditioned on "how fast they adopt certain technologies and how far they would go to ensure IP protection — like paying for everything they're using." For sweet spots in Eastern Europe, he advises PLM vendors to pay attention to Russia.

Just one week after CIMdata's market report is released, another sign of U.S. economic struggle appears — the U.S. government's takeover of mortgage lenders Fannie Mae and Freddie Mac.

CIMdata's report for the next year is still in the making, but Amann acknowledged, "In the later part of the second quarter of 2008, we see that deals are slowing down. It's not that they are not closing; they just take longer to close."

For now, the PLM market sails on, buoyed in part by what Amann sees as vigor in simulation and digital manufacturing and in nontraditional markets.