PLM This Week: PLM Investment Points Upwards – Accenture Pushes IBM Off the "Provider Throne"
Felix Nilsson posted on December 21, 2015 | | 10313 views

(Stan Przybylinski, CIMdata.)

(Stan Przybylinski, CIMdata.)

The PLM consultancy firm CIMdata published a report in August 2015 which includes analyst projections for 2015.With the year coming to a close, let’s take a closer look at the general state of the PLM market. 

While we’re waiting for the figures for 2015, we can get a good indication by taking a closer look at 2014. 

To summarize, there are three things that stand out in CIMdata’s report:

  • After three consecutive years of decreasing investment growth, 2014 broke the trend. The market grew to $37.6 billion overall, an increase of 8 percent compared to 2013. Between 2011 - 2013, the growth rate fell from 15.2 percent to 4.8 percent. However, this downward curve has turned upwards again. There are good reasons for it, claims CIMdata analyst Peter Bilello: "Companies the world over still see innovation as the best way to grow, and a PLM strategy can be the engine for supporting that innovation-fueled growth.”
  • On the PLM Service Providers Top 10 revenue generators list, Accenture not only rattled IBM, but pushed them off the throne. Accenture’s revenues grew from $550 million in 2013 to last year’s $652 million. This 18 percent increase catapulted Accenture to the top.
  • It is no surprise that Dassault Systèmes remains number one in terms of overall revenue.  Last year the company saw $4,873 billion, a 15 percent increase over 2014. However, perhaps more interesting is the fact that Siemens PLM passed Autodesk and finished second, with revenues of $3,970 billion.
(Marc Halpern, Gartner Group.)

(Marc Halpern, Gartner Group.)

If we look back a few years, PLM showed remarkably high growth numbers during 2011 (15.2 percent) and 2012 (11.6 percent). However, 2013 ended in a much weaker position when growth halved, falling to 4.8 percent. 

According to analyst Gartner, the reasons for this decreased growth came partly from a gloomy global economic outlook and partly from the high levels of growth during 2011 and 2012 which paved the way for a period of digestion.

Gartner's Marc Halpern pointed out that, "Large companies have already made significant investments in PLM, and they have less incentive to spend at the same levels as in the past until they get the business value they expected from the investments they already made." 

In short, companies have bought what they need and now it is time to "digest" and develop effective use of those purchases. 

This changed during 2014 so that the market even ”showed momentum going into 2015” claimed CIMdata in their ”2015 PLM Market and Solution Provider Analysis Report”..

The PLM Market Leaders Revenues for 2014

Below is how the PLM market looked through 2014 in terms of overall revenue, among what CIMdata calls "The PLM Mindshare Leaders.”:

  1. Dassault Systémes, $4,873 million
  2. Siemens PLM Software, $3,970 million
  3. Autodesk, $3,746 million
  4. PTC, $1,987 million
  5. SAP PLM, $1,494 million
  6. Oracle, $794 million

       (Source: CIMdata 2015)

The period of digestion that Marc Halpern refers to seems to be over, and companies are ready to develop their PLM solutions further. This is indicated by both the 2014 numbers and a strong start going into 2015. (The final figures for this year will be revealed next summer, when CIMdata publishes its annual report.)

There are two primary aspects to this. First is the need to strengthen their ability to innovate, which is one of the key drivers according to CIMdata analyst Stan Przybylinski. The second is their efforts to integrate product development and manufacturing. 

Regardless of the new technologies that have emerged during the last few years, these two basic requirements are still of utmost importance. This once again proves that among larger organizations, more sophisticated levels of seamlessness and smooth processes are needed to break down existing silos.

But there are also more economic reasons for investing in PLM: to maintain or enhance productivity without hiring more people.

None of the reasons above mean that new business models, technologies and platforms like Product-as-a-Service, smart products, the Cloud, Internet of Things (IoT), Big Data and social product development and others aren’t good investments.  

They certainly are good investments, but you can’t expect to reach a breakthrough for new smart products without having the basic parameters in place. PLM solutions and strategies are becoming even more necessary to do business in the global, connected world that companies work in today.   

There are three facts that confirm the direction of PLM investments:

  • cPDm grew more than Tools – 9.2 percent compared to 7.3 percent.
  • Furthermore, investments in cPDm services increased by 10.3 percent, to $7.6 billion (representing almost 58 percent of the cPDm market).
  • These services represented 57.7 percent of the 2014 cPDm market. In 2014, Digital Manufacturing revenues were up 11.8% to $603 million.

Together, these facts indicate that companies want to do more with their systems. This is ideally what PLM is about, ”a strategic business approach that applies a consistent set of business solutions in support of the collaborative creation, management, dissemination, and use of product definition information across the extended enterprise from concept through life—integrating people, processes, business systems, and information.” 

To get more out of a PLM investment that is already made, a company will usually enlist the help of a PLM-focused service provider. As mentioned earlier, Accenture took the revenue lead here in 2014:

PLM Service Revenue Leaders 2014

  1. Accenture $652 million
  2. IBM $595 million
  3. HP $440 million
  4. T-systems $306 million
  5. Dassault Systemes $295 million
  6. SAP $288 million
  7. Capgemini $273 million
  8. TCS $268 million
  9. Atos $267 million
  10. Siemens PLM $245 million

      (Source: CIMdata 2015)

Looking ahead, CIMdata expects continued growth in 2015, but remains ”conservative” in their estimates due to market conditions in many parts of the world that are still considered fragile.

According to the CIMdata forecast, the cPDm market will grow by 4.2 percent in 2015 to approximately $13.7 billion. The Tools segment of PLM is forecast to grow by 6.1percent in 2015 to $25.5 billion, and Digital Manufacturing is forecast to grow by 4.1percent to $628 million. The overall PLM market is forecast to grow 5.8 percent in 2015.


Onshape Ready for Release – Developer Shares Beta Stats

Onshape is finally out of the oven. With the conclusion of the open beta period that started in March of this year, their CAD-in-the-cloud solution is finally ready for its official release. Founder and chairman Jon Hirschtick announced the release on the company’s blog this week, along with some interesting statistics from the beta test.

For example, during the beta test Onshape recorded 400,000 hours of usage by over 10,000 users in over 150 countries. The test also saw the creation of more than 4 million modelling features as well as 325,000 STL files for 3D printing. In total, 390,000 CAD files were imported or exported during this period.

Here’s a link to the blog post, and if you’re interested in learning more about Onshape, I  recommend reading David Levin’s interview with Jon Hirschtick, which is available on ENGINEERING.com right now. 


PTC Expands ALM portfolio

PTC recently announced the expansion of its Application Lifecycle Management (ALM) portfolio with four new solutions. The solutions are only available through subscription, and include:

  • Global Software Development
  • Model Based Systems Engineering
  • Software Modeling
  • Requirements & Validation

According to PTC, these solutions are built specifically for the needs of software engineers, system engineers, requirement and quality analysts and process architects. At the same time, they help maintain collaboration with other team members.

Looking at PTC’s overarching strategic goals, it’s not surprising that the company is investing in ALM development. PTC wants to be the number one provider of tools to create IoT-enabled products, which requires effective tools to streamline the mechatronic development process.

This is something that is still lacking in the real world, according, to the PLM expert, Professor Martin Eigner, who in a recent interview noted that, ”90 percent of my customers have no integration between the software and their Bills of Materials. ”


German Shipbuilder Deploys Industry Solutions from Dassault

Dassault Systèmes announced that German cruise ship builder Meyer Werft is implementing DS’s industry solutions “On Time to Sea” and “Designed for Sea” to modernize their product design processes and improve collaboration.

As the names imply, these solutions, which are based on DS’s 3DEXPERIENCE platform, are specifically aimed at the needs of shipbuilders. The software will support Meyer Werft’s new Technology and Development Center in Papenburg and the 500 designers and engineers working there. It will also support additional teams in Papenburg and at sites in Rostock, Germany and in Finland

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