Four Myths About SaaS PLM

The original article was published on my Beyond PLM blog

How many times, you've heard the story about problems with the reliability of SaaS software? It usually goes like this - it was an outage of AWS and half of the internet including my CAD (PLM) system went down. While these situations are unavoidable, how to differentiate between science and red-herring when it comes to SaaS PLM?

SaaS (Software as a Service) is more than two decades old and it is booming. SaaS solutions are increasing its popularity among companies. SaaS companies are growing and businesses are switching to SaaS software. As everything new, it comes together with a lot of confusion, misconceptions, and myths. Incumbent products and vendors are watching carefully their business. Even CAD and PLM industry didn't have a major change in vendors' status quo for the last two decades, nobody can guarantee, it will stay forever.

Decades of single-tenant company-oriented PLM systems created a strong association between database and PLM systems. At least two generations of PLM people grew up with specific assumptions about what is PLM (database) and how PLM architecture can be used to solve business and engineering problems. Changes are hard and it leads to misunderstanding, confusion, and sometimes defensiveness in every aspect related to new (SaaS) technologies and products. 

Let's talk about myths I often can see surrounding decisions and changes related to SaaS PLM. These myths came from my discussions with industrial companies, consultants and sometimes technical architects

1- Moving PLM operation to the cloud is too risky

Every change brings risks. Does it mean the cloud is the biggest risk PLM implementation can face? Each time an outage of some cloud infrastructure (eg. AWS, Azure, etc.) is happening, the social media is flooded with red herring messages about how dangerous it is to rely on the cloud and why the cloud is high risk. So, industrial companies should really think twice before moving their business and using SaaS applications. While outages can happen, they are not only happening with AWS and Azure but also with corporate data centers and local servers. Almost 50% of enterprises experienced data center outages for one year, while 7% experienced 5+ outages annually. The second group is usually much less reported in the media, but it is not more dangerous than anything else. The infrastructure is getting more stable continuously and companies standing behind this infrastructure are serving major industries these days, so PLM admins can sleep well. It doesn't mean that the process of migration will be easy, but I will talk about it in the next paragraph

2- Cloud migration has to be a quick "one and done" process.

To think that moving to SaaS and cloud is like flipping a switch would be a mistake. In the case of the large business, there are many applications managing engineering and manufacturing data, connected together in a good and bad way. To pull all this network into a new environment requires some planning and work that can be only done step by step. Staging and implementation phases is an important element of cloud migration success. Thanks for SaaS systems, all of them are available online and won't require any setup and configuration - just create an account and start planning your work. Here is an example of OpenBOM (disclaimer- I'm CEO and co-founder) that allows you to create an account and start working in less than a few minutes, Autodesk, PTC Onsahpe, and some others will do the same. Having immediate access to the software (that's the SaaS) is your first litmus test for the SaaS PLM provider. Watch carefully when you deal with SaaS and not cloud-washing PLM services.

3- SaaS PLM has bad performance

This myth is usually coming from people assuming that existing products will work from the cloud servers. This is wrong and I explained it many times. The new (SaaS) products are not the same. These new products are tuned to low latency work, browsers, and optimized to work on the internet and not intranet and local servers. New systems are transferring data and not files; don't require downloading an entire file directory to open design and usually capable to scale up as the workload is growing.

4- SaaS decreases PLM system transparency

This myth is usually fueled by the fear of losing control. The companies think that placing data in a cloud server will make data less accessible. While you won't be able to come to the server room and to see the database server, the concerns are mostly about "what if the vendor will not allow us to get access to the data". A traditional PDM/PLM system although installed in your server room gives you about the same level of transparency when it comes to the ability to extract the data from proprietary file formats and database structures. Having data transparency can be done in SaaS and REST API Is de facto a standard of communication. 

What is my conclusion?

Companies should invest in educational activities for all members of the engineering and IT team about SaaS PLM architectures and differentiation. For most companies, SaaS PLM knowledge doesn't exist and leads to high levels of confusion among IT and engineering teams. PLM vendors make things even more complex by promoting a variety of cloud/hosted systems and call it SaaS. My prediction is that SaaS PLM services will be adopted by small companies, downstream applications, and the supply chain. Existing PLM (aka PDM) managing engineering processes in traditional industries will hold traditional on-premise or hosted PLM for the longest period of time. Just my thoughts...

Best, Oleg

Disclaimer: I’m co-founder and CEO of OpenBOM developing a digital network platform that manages product data and connects manufacturers and their supply chain networks. My opinion can be unintentionally biased.