Current Trends In The Plm Market


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Current Trends In The Plm Market

  1. 1. Current Trends in the PLM Market Thursday, April 12, 2007 Penn Club, New York Alan Mendel , Managing Partner, Focus 20, LLC                                                                                                                                    
  2. 2. <ul><li>Council Member Biography </li></ul><ul><li>Alan Mendel, Managing Partner at Focus 20, LLC, is a seasoned </li></ul><ul><li>international business professional with nearly two decades of experience </li></ul><ul><li>working with small to large fortune 1000 companies. Mr. Mendel is a </li></ul><ul><li>recognized worldwide authority on methodologies and technology solutions </li></ul><ul><li>for product lifecycle management (PLM) throughout the extended </li></ul><ul><li>enterprise and supply chain. Mr. Mendel has consulted internationally with </li></ul><ul><li>organizations from many industries and solution/technology suppliers on </li></ul><ul><li>the development, use, implementation, and market for solutions to address </li></ul><ul><li>the product lifecycle. He has worked with PLM suppliers to define their </li></ul><ul><li>product and service offerings, business and marketing plans, establish </li></ul><ul><li>distribution channels and partnerships, and identified potential acquisitions </li></ul><ul><li>and merger opportunities. Prior to founding Focus 20 in 2001, Mr. Mendel </li></ul><ul><li>spent eight years as an industry analyst and consultant establishing the </li></ul><ul><li>internationally recognized PLM consulting firm, CIMdata, Inc. </li></ul>
  3. 3. <ul><li>Table of Contents </li></ul><ul><li>What is the future of the PLM market? </li></ul><ul><li>What are the key customer market drivers? </li></ul><ul><li>How are the major players positioning themselves? </li></ul><ul><li>Can we expect more consolidation/partnerships in the near future? </li></ul>
  4. 4. Evolution of PLM Market Product Data Image/Document Management View & Markup PLM Simulation & Mock up Enterprise Application Integration Web Portals Product Realization Project Mgmt Requirements Traceability Management (RTM) 1985+ 1990+ 2000+ 1995+ Data Mgmt File Vaulting Basic Workflow Multi-CAD BOM Change Mgmt Configuration Mgmt Product Structure Mgmt Process Mgmt Web Architectures EAI Tools Applications Solutions & DMU Env 2005+ NDPI Portfolio Mgmt Innovation Mgmt Analytics Mechatronics EAI = Enterprise Application Integration EDM PDM CPC
  5. 5. PLM Market Comparison Source: Data from AMR Research, 2005 <ul><ul><li>PLM - $7.3 billion market by 2009 </li></ul></ul>
  6. 6. Enterprise Application 5yr CAGR Source: 2004-2009, Data from AMR Research, 2005 * CAGR: Compound Annual Growth Rate
  7. 7. PLM Major Messaging <ul><li>Collaboration </li></ul><ul><li>Product Portfolio Management </li></ul><ul><li>Program/Project Management </li></ul><ul><li>Mechatronics </li></ul><ul><li>Compliance </li></ul><ul><li>New Product Introduction (NPI) </li></ul><ul><li>Product Innovation </li></ul><ul><li>Digital Manufacturing </li></ul>
  8. 8. PLM Future Directions <ul><li>Process Innovation </li></ul><ul><li>Business Innovation (PLM-ERP-SCM…) </li></ul><ul><li>Mechatronics (expanded) </li></ul><ul><li>Process PLM </li></ul><ul><li>Industry Specific PLM </li></ul><ul><li>Digital Manufacturing (expanded - Factory) </li></ul><ul><li>Business Application Expansion </li></ul><ul><li>PLM Costing </li></ul>
  9. 9. PLM Market Forecast (non-tools) Source: Adapted from CIMdata, Inc. PLM Market Press Release, April 2006 cPDm Market subsection of CIMdata’s PLM Market (includes Tools) cPDm equivalent to AMR Research PLM non-CAD Market
  10. 10. PLM Mid-Market <ul><li>Represents 49% of PLM software market in 2005 ($786M) 1 </li></ul><ul><li>PLM mid-market adoption drivers 2 </li></ul><ul><ul><li>Demand for shorter product lifecycles (49%) </li></ul></ul><ul><ul><li>Globalization of markets and/or supply chains (43%) </li></ul></ul><ul><ul><li>More complex design or distributed design environment (34%) </li></ul></ul><ul><ul><li>More complex products (31%) </li></ul></ul><ul><li>Top strategic actions for SMEs to improve product development 2 </li></ul><ul><ul><li>Improved product data management (40%) </li></ul></ul><ul><ul><li>Improved project/program/product development execution (39%) </li></ul></ul><ul><ul><li>Collaborative design (35%) </li></ul></ul><ul><ul><li>Project Collaboration (29%) </li></ul></ul>1 Source: AMR Research, 2006 2 Source: AberdeenGroup, March 2006 SME = Small & Mid-Sized Enterprise
  11. 11. Agenda <ul><li>PLM Market Past and Future </li></ul><ul><li>Key PLM Market Drivers </li></ul><ul><li>Major Market Players & Positioning </li></ul><ul><li>Market Dynamics Moving Forward </li></ul>
  12. 12. Executive Interest in PLM Grows <ul><li>Business Environment </li></ul><ul><ul><li>Economic challenges, changing global security, globalization </li></ul></ul><ul><ul><li>Increased competition, limited capital funding, product customization </li></ul></ul><ul><ul><li>Outsourcing scope widening, consolidation, and market shakeout </li></ul></ul><ul><li>Enterprise Objectives </li></ul><ul><ul><li>Drive short-term profitability and cash reserves </li></ul></ul><ul><ul><li>Increase market share and product demand </li></ul></ul><ul><ul><li>Strengthen customer satisfaction and loyalty </li></ul></ul><ul><ul><li>Increase quality, reduce costs, and speed time to market </li></ul></ul><ul><ul><li>Manage increased product complexity </li></ul></ul><ul><ul><li>Optimize disparate supply chains </li></ul></ul><ul><ul><li>Design, build, and maintain anywhere and anytime </li></ul></ul><ul><ul><li>Build end-to-end processes and systems </li></ul></ul>
  13. 13. PLM Business Focus <ul><li>Drives, facilitates, and captures innovation </li></ul><ul><ul><li>Facilitate innovation through process enablement and reduction in non-value-added activities </li></ul></ul><ul><li>Manages complete product lifecycle </li></ul><ul><ul><li>Captures and maintains corporate intellectual assets </li></ul></ul><ul><ul><li>Establishes product collaborative teams across the enterprise and throughout supply chains </li></ul></ul><ul><ul><li>Establishes a common integrated product definition and change management environment – “single version of the truth” </li></ul></ul><ul><ul><li>Integrates with value applications and enterprise systems </li></ul></ul><ul><li>Accelerates New Product Introduction (NPI) process </li></ul><ul><li>Brings together information, processes, and people </li></ul><ul><li>Plan, manage, and execute programs and resources more efficiently and effectively </li></ul>
  14. 14. Major PLM Market Drivers <ul><li>Increased focus on innovation (products, processes and business) </li></ul><ul><li>Collaborative distributed teams and disparate applications </li></ul><ul><li>Process consolidation across development teams / supply chain </li></ul><ul><li>Intellectual asset management, leverage digital assets (CAx), MRO… </li></ul><ul><li>Project, program and portfolio management </li></ul><ul><li>Global quality & compliance standards (e.g., ISO 9001, RoHS, Tread Act, WEEE ELV, and RoHS) </li></ul><ul><li>New Product Development and Introduction (NPDI) </li></ul><ul><li>Integration with enterprise applications (ERP, CRM, SCM, Financial …) </li></ul><ul><li>Best of Breed verses ERP integrated PLM solutions </li></ul><ul><li>Mechatronics (mechanical, electronics, and software) </li></ul><ul><li>Mid-market PLM opportunities, Open Source entries, on Demand/SaaS </li></ul><ul><li>Industry specific PLM applications (apparel, MRO, Automotive, A&D…) </li></ul>Transportation Recall Enhancement, Accountability, and Documentation (TREAD) Act, End-of-Life vehicles (ELV) for automotive, Waste Electrical and Electronic Equipment (WEEE), Restriction of Hazardous Substances (RoHS), Maintenance Repair & Overhaul (MRO), Aerospace & Defense (A&D), Software as a Service (SaaS), Computer Aided applications (CAx)
  15. 15. Agenda <ul><li>PLM Market Past and Future </li></ul><ul><li>Key PLM Market Drivers </li></ul><ul><li>Major Market Players & Positioning </li></ul><ul><li>Market Dynamics Moving Forward </li></ul>
  16. 16. PLM Vendor Positions, 2006 Source: Data from AMR Research, 2006 Other 48% UGS 11% SAP 9% Dassault 9% PTC 6% Telelogic 4% MSC Software 3% Agile Software 3% MatrixOne 3% Geber Technology 2% Lectra Systems 2%
  17. 17. PLM Tier 1 Suppliers <ul><li>UGS </li></ul><ul><ul><li>CAD/CAE/CAM/DMU/PLM solution provider </li></ul></ul><ul><li>Dassault Systémes/IBM (including recently acquired MatrixOne) </li></ul><ul><ul><li>CAD/CAE/CAM/DMU/PLM solution provider </li></ul></ul><ul><li>PTC </li></ul><ul><ul><li>CAD/CAE/CAM/DMU/TechPub/PLM solution provider </li></ul></ul><ul><li>Agile Software </li></ul><ul><ul><li>DMU/PLM solution provider </li></ul></ul><ul><li>SAP </li></ul><ul><ul><li>Integrated enterprise solution provider </li></ul></ul><ul><li>IFS (International Fiber Systems) </li></ul><ul><ul><li>Integrated enterprise solution provider </li></ul></ul><ul><li>Oracle </li></ul><ul><ul><li>Integrated enterprise solution provider </li></ul></ul><ul><li>NEC </li></ul><ul><ul><li>Systems developer and integrator (Japan-focused) </li></ul></ul>Digital Mock up (DMU), Computer Aided Design (CAD), Computer Aided Engineering (CAE), Computer Aided Manufacturing (CAM), Technical Publications (TechPub)
  18. 18. PLM “Best-of-Breed” <ul><li>UGS </li></ul><ul><li>Dassault Systémes & IBM (incl. MatrixOne) </li></ul><ul><li>PTC </li></ul><ul><li>Agile Software </li></ul><ul><li>SAP </li></ul><ul><li>IFS </li></ul><ul><li>Oracle </li></ul><ul><li>NEC </li></ul>Typically thought of as “best-of-breed” PLM suppliers based on their focus on engineering, product development applications, and processes – Major Suppliers
  19. 19. PLM Integrated Enterprise Solutions <ul><li>UGS </li></ul><ul><li>Dassault Systémes/IBM (includes MatrixOne) </li></ul><ul><li>PTC </li></ul><ul><li>Agile Software </li></ul><ul><li>SAP </li></ul><ul><li>IFS </li></ul><ul><li>Oracle </li></ul><ul><li>NEC </li></ul>Typically thought of as “Integrated Enterprise Solutions” suppliers, including PLM, based on their common platform, data, and applications
  20. 20. PLM Implementation Options <ul><li>PLM from an independent PLM supplier </li></ul><ul><li>PLM from your enterprise solutions supplier </li></ul><ul><li>PLM hybrid approach </li></ul>
  21. 21. Agenda <ul><li>PLM Market Past and Future </li></ul><ul><li>Key PLM Market Drivers </li></ul><ul><li>Major Market Players & Positioning </li></ul><ul><li>Market Dynamics Moving Forward </li></ul>
  22. 22. PLM Market Consolidation <ul><li>UGS (Acquired by Siemens AG, 2007) </li></ul><ul><ul><li>Acquired SDRC, EAI, Slate… </li></ul></ul><ul><li>Dassault Systémes </li></ul><ul><ul><li>Acquired MatrixOne 2006 </li></ul></ul><ul><li>Axon </li></ul><ul><ul><li>Acquires Zytalis </li></ul></ul><ul><li>Tata </li></ul><ul><ul><li>Acquires INCAT </li></ul></ul>
  23. 23. PLM Functional Overlap ERP CRM SCM SRM PLM
  24. 24. PLM Overlapping Trend <ul><li>Business focus </li></ul><ul><ul><li>Share many common business objectives and benefits </li></ul></ul><ul><ul><li>Synchronization and integration are important to achieve benefits </li></ul></ul><ul><li>Processes </li></ul><ul><ul><li>Some overlap, some butt, some must climb walls, some are duplicated, etc. </li></ul></ul><ul><li>Data </li></ul><ul><ul><li>Much is in common </li></ul></ul><ul><ul><li>Much gets duplicated </li></ul></ul><ul><ul><li>Much gets manually reentered </li></ul></ul><ul><li>Technology </li></ul><ul><ul><li>Software technology common </li></ul></ul><ul><ul><li>Architectures grow more similar </li></ul></ul><ul><ul><li>Functional components similar/duplicate </li></ul></ul>
  25. 25. Consolidation Trend for PLM <ul><li>PLM business objectives, benefits, focus, and applications overlap more with other enterprise application domains </li></ul><ul><li>Suppliers of enterprise applications have naturally expand their scope to incorporate the domain of PLM </li></ul><ul><li>Analysts also see and recognize this trend and have adjusted their positioning and vision for PLM as they look into the future </li></ul><ul><ul><li>For example, Gartner, AMR Research, and IDC </li></ul></ul>
  26. 26. PLM Market Summary <ul><li>PLM market & investments continue to grow </li></ul><ul><li>Consolidation expected to continue for products and services </li></ul><ul><li>Continued business focus for PLM (innovation, NPI, quality, compliance…) </li></ul><ul><li>Overlapping capabilities with enterprise solutions yields continued market challenges </li></ul><ul><li>Best of Breed verses Integrated Solution battle continues </li></ul><ul><ul><li>ERP vendors business to lose? </li></ul></ul>
  27. 27. <ul><li>About GLG Institute </li></ul><ul><li>GLG Institute (GLGi SM ) is a professional organization focused on educating business and investment professionals through in-person meetings. It is designed to revolutionize the professional education market by putting the power of programming into the hands of the GLG community. </li></ul><ul><li>GLGi hosts hundreds of Seminars worldwide each year. </li></ul><ul><li>GLGi clients receive two seats to all Seminars in all Practice Areas. </li></ul><ul><li>GLGi’s website enables clients to: </li></ul><ul><ul><li>Propose Seminar topics, agenda items and locations </li></ul></ul><ul><ul><li>View and RSVP to scheduled and proposed Seminars </li></ul></ul><ul><ul><li>Receive a daily briefing with new posts on your favorite tickers, subject areas and from trusted Council Members </li></ul></ul><ul><ul><li>Share Seminar details with colleagues or friends </li></ul></ul>
  28. 28. <ul><li>Gerson Lehrman Group Contacts </li></ul><ul><li>Nick Goodman </li></ul><ul><li>Vice President </li></ul><ul><li>Gerson Lehrman Group </li></ul><ul><li>850 Third Avenue, 9th Floor </li></ul><ul><li>New York, NY 10022 </li></ul><ul><li>212-750-1878 </li></ul><ul><li>[email_address] </li></ul><ul><li>Christine Ruane </li></ul><ul><li>Senior Product Manager </li></ul><ul><li>Gerson Lehrman Group </li></ul><ul><li>850 Third Avenue, 9th Floor </li></ul><ul><li>New York, NY 10022 </li></ul><ul><li>212-984-8505 </li></ul><ul><li>[email_address] </li></ul>
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