Key takeaways:
- SaaS PLM solutions have been around for 20 years and have evolved significantly over that time.
- CIMdata recognizes two distinct generations of SaaS PLM solutions, which we are calling Gen 1 and Gen 2.
- Gen 1 SaaS PLM solutions offer basic capabilities, limited configurability, and are well suited for companies with simpler products or are using out of the box legacy on-premises solutions hosted in a cloud data center.
- Gen 2 SaaS PLM solutions offer full on-cloud capabilities, significantly more configurability, and suit companies with more complex products with a high design content.
Introduction to SaaS PLM
Cloud-based enterprise applications have been around for a long time with Salesforce CRM being one of the most notable market entrants over 20 years ago. The trend quickly spread to other types of applications like ERP, SCM, and others. Acceptance by CIOs and end users grew quickly―driven by ease of adoption and use and, sometimes, lower costs.
Cloud-based PLM also started to emerge around the same time, primarily driven by small independent start-ups. But user interest was low, due to concerns over security and performance, especially when managing large CAD files. Over time, these concerns have largely been overcome and now many PLM solution providers are offering cloud-based versions of their products and help to migrate from legacy on-premises solutions is available from many service providers.
A recent study undertaken by CIMdata validated the move towards the cloud:
- 66% of companies are considering Cloud PLM
- 22% of companies have already selected a Cloud PLM solution
As cloud-based PLM has moved into the mainstream, the technology underpinning it has evolved significantly. Through our research, CIMdata recognizes two distinct generations of SaaS PLM, which we are calling Gen 1 and Gen 2. In both generations, the PLM software is provided as a service (SaaS) and payment is in the form of a monthly subscription, usually billed annually and with a minimum term of 2 years or more.
Gen 1 SaaS PLM Definition
According to our definition, Gen 1 SaaS PLM is based on a multi-tenant architecture hosted on a hyperscaler (i.e., AWS, Azure, etc.) cloud platform. Multi-tenant means that all customers run the same version of the software. This benefits customers by ensuring they are all on the same, current release, taking advantage of performance, security, and feature improvements. The downside is that customers don’t control when upgrades happen, but this typically has limited impact on operations. Generally, Gen 1 solutions can scale easily to larger user and data volumes, and to absorb peak workloads without an impact on performance.
Capabilities of Gen 1 solutions can be somewhat limited but generally include document management, part and BOM management, sourcing, and quality management. Integration with a limited number of CAD tools may be available. Other capabilities may be either very basic or not available, for example: requirements management, support for MBSE and simulation, digital manufacturing, and MES/MOM. Gen 1 solutions also allow some degree of configuration based on parameter or rule setting. Changes to the underlying code are not allowed, however, as this would impact other customers.
A variant of Gen 1 is a single-tenant on-premise product running in a hyperscaler datacenter leveraging infrastructure as a service (IaaS). This “hosted” solution lacks many of the benefits of a cloud solution (i.e., scalability, automatic upgrades, etc.) but may allow changes to the underlying data model and user interface, which can significantly complicate upgrades. This type of solution may be provided as a subscription service or may require permanent licenses. Optional managed services are typically available for support, maintenance, and upgrades.
Gen 2 SaaS PLM Definition
CIMdata defines a Gen 2 SaaS PLM solution as one that has more complete functionality, is highly configurable (often via a low code/no-code interface), and is architected to take full advantage of the hyperscaler platform it’s running on, either natively or via containerization. This means that Gen 2 solutions are not only able to deal with higher user and data volumes but also peak workloads and complex configurations without impacting performance.
In our view, Gen 2 solutions are more likely to be single-tenant as this allows for greater flexibility on the timing of upgrades and the preservation of customer configurations.
A key part of our Gen 2 definition is the availability of a broad set of capabilities. In addition to those already listed for Gen 1, Gen 2 solutions should include:
- ECAD and MCAD integrations, including multi-CAD management
- Full authoring capability for requirements
- Multi-BOM management
In addition we would expect a Gen 2 solution to offer one or more of the following:
- Integration with simulation and analysis tools
- Digital manufacturing support (process planning, work instruction authoring)
- Simulation lifecycle management
The improved configurability also makes it easier for businesses to update and optimize their processes in response to internal and external changes. However, all of this comes at the cost of increased solution complexity.
Finally, Gen 2 solutions may take advantage of a platform architecture, which allows applications to be created easily by leveraging extensive underlying capabilities in the platform.
Summarizing Gen 1 and Gen2
The functionality of Gen 1 solutions is generally limited (when compared with a legacy on-premise solution), but is adequate for companies with products using standard parts that are sourced and assembled by contract manufacturers.
In comparison, companies with more complex products with a high design content will require the more extensive capabilities of Gen 2 solutions. Gen 2 solutions are also well-suited to companies that operate in a highly regulated environment allowing them to tailor their solutions to address the regulatory needs and oversee upgrades that might otherwise lead to disruption.
Conclusions
SaaS PLM solutions have been around for more than 20 years, and their architectures and capabilities have evolved significantly over that time.
To help buyers compare different SaaS PLM solutions, CIMdata recognizes two distinct generations, which we are calling Gen 1 and Gen 2. Gen 1 SaaS PLM solutions generally offer basic capabilities including document, part and BoM management, limited configurability, and are well suited for companies with simpler products that make extensive use of standard parts and are assembled by contract manufacturers. Gen 2 SaaS PLM solutions offer broader capabilities, (adding CAD integration, manufacturing, simulation management, and others), and significantly more configurability. Companies with more complex products with a high design content or operating in a regulated environment should evaluate these solutions.