Product lifecycle management (PLM) software hasn't moved to the cloud entirely, but it's moving strongly in that direction. Many of the traditional PLM companies, such as Siemens PLM and Autodesk, have started to offer PLM in the cloud. Arena Solutions has offered its PLM software entirely in the cloud for a decade; the company has over 30,000 users and more than 700 customers.
There are many advantages to cloud-based PLM. Cloud software is quick to deploy, cloud solutions can be available in a matter of days, and it's easy to get suppliers on board, since they only have to log in. There are no hurdles to fast collaboration. Costs can also be significantly lower with cloud services. Instead of paying for an annual license up front, design engineers can pay per seat per month. Also, as a company grows, the PLM solution can scale to match expanded needs.
While the large PLM companies are beginning to offer cloud-based services, Arena Solutions began life as a cloud PLM provider. "When we started a decade ago, a lot of our initial customers were small. They needed PLM, but they couldn't afford the bigger applications. We gave them a tool they could use to compete," Craig Livingston, chairman and CEO of Arena Solutions, told Design News. "In the last couple of years, we've been investing a lot of resources to expand our solution and work on the architecture to support larger and larger customers."
Part of the attraction of cloud-based PLM is its facility with fast-to-market design. "We see a need for speed-to-market and more complexity. Plus, our customers are relying on their partners. So you have to get to market fast, with complexity, while working with partners. More and more companies are turning to cloud applications to accomplish all this," Livingston told us. He noted that cloud PLM is not just for small companies that can't afford expensive installations. "Some of the largest companies in the world are looking at cloud applications," he said.
As well as design speed, cloud-based PLM also facilitates collaboration along the supply chain. "It starts with those in engineering, mechanical, and electronics, and then it moves to purchasing and supply. It branches out," said Livingston. "PLM starts with design and then grows. In a company with 500 employees, we could have 200 to 300 users. Then you can begin to include suppliers outside the company."
Livingston noted that cloud customers receive the benefit of aggregated resources and experience. "We're able to invest in a high-end set of architecture and operations that customers could never afford on their own. We do it across 700 different customers," he said, noting that interest in Arena cloud services has moved beyond small companies. "Ten years ago, many of the companies we were talking to didn't have an alternative to cloud PLM -- either use nothing or use the cloud. Now we're having conversations with larger organizations, those with 1,000 employees."
Cloud services make it easy for companies to bring in outside partners. "Our customers get licenses for their suppliers. The penetration of their suppliers is almost always greater than their internal users," Steve Chalgren, Arena's vice president of product development and strategy, told Design News. "Often today, a major part of the business is outsourced. You needed suppliers to interact in a high-value way."
Chalgren noted that collaboration has become a major attraction with cloud PLM. "We have a standalone product, Arena Exchange. It works with our PLM product to provide supply chain collaboration," said Chalgren. "We only charge those who initiate the collaboration. There is no charge for others to log in for collaboration. The value of that model is deep penetration for quality review processes."
Another advantage of cloud-based PLM is that updates are continuous, and they happen without further investment. "Updates are automatic," said Livingston, noting that automatic updates make the cloud attractive. "It's the same reason companies rent buildings instead of owning them. It's the reason they outsource manufacturing. They don't want to own the equipment."