Manufacturers boosted their investments in design tools in 2010 as the PLM sector returned back to growth. That's according to the latest CIMdata 2011 PLM Industry Review Trends Report.
Following the global economic crisis in 2009, CIMdata downgraded its forecasts, predicting that it would take two to three years for companies' investments in product lifecycle management (PLM) tools to return to the peak levels seen in 2008.
The research firm's latest report shows that rebound happened in 2010, with the overall PLM market growing a healthy 9.7 percent over 2009 to $25.8 billion. Of that total, 64 percent ($16.3 billion) reflects investments in tools like CAD and CAE, while 34 percent ($8.7 billion) reflects investments in collaborative PDM. PDM is what CIMdata refers to as CPDm, comprising collaboration, content and document management, and visualization offerings. If you do the math, CIMdata says sales of "Tools" were up 9.7 percent from 2009 to 2010, while cPDm investments grew 10.1 percent during the same timeframe.
Looking into its crystal ball, CIMdata is predicting more of the same, despite the lackluster tenor of the broader, global economic climate. In its forecasts, CIMdata projects that the overall PLM market (what it dubs the comprehensive PLM market) will grow slightly slower at 8 percent in 2011 but then continue at a compound annual growth rate of 9.7 percent to reach $41.3 billion by 2015.
What's the driver for CIMdata's bullish take? Director of Research Stan Przybylinski cites a number of factors, the most broad-reaching being that many companies see innovation as the primary way to fuel growth, and PLM tools and strategies are central to that cause. Expansion into non-traditional industry sectors like retail and apparel, food and beverage, and financial and investment services is helping to keep those numbers afloat, Przybylinski says, as will platform migrations and upgrades by long-time customers in key sectors like aerospace and automotive, which are now actively looking at refreshing aging PLM platforms.
In another surprise finding, the mechanical CAD space is showing new signs of life. Long considered the dead spot in overall design tools growth, new advancements around direct modeling and new paradigms like PTC's new Creo line, which advances the idea of "right-sized" apps, have users energized, Przybylinski says.
Other major trends CIMdata predicts will be a primary focus of discussion and PLM product advancement and growth these next few years:
Designing the complete product. (Otherwise, the mechatronics take on product design.) We've been writing a lot about the rise of the interdisciplinary engineer, and CIMdata (and, to be fair, all of the major vendors and PLM analysts) believes this will be a key area of focus and enhancement for design tools and PLM platforms over the next few years.
Environmental compliance. Long a hot button, compliance, CIMdata believes, may be the "tipping point for PLM strategies, since green is a lifecycle issue, perhaps like none other," Przybylinski says. "I don't think companies can effectively do compliance without PLM -- there's so much data required across so many functions."
Mobile. With the consumer market crazed over apps and mobility, PLM and design tools vendors have taken note. We've seen mobile-app releases that test the waters, but Przybylinski expects to see a lot more activity on this front. And it won't just be traditional tools tweaked to run in the small-screen real estate of tablets or smartphones: Companies will rethink how engineers work with design tools and create new paradigms.
The cloud. It's another area where CAD and PLM vendors are testing the waters, but Dassault Systèmes' announcement last month of a multi-pronged cloud strategy around its Version 6.0 platform shows that the players mean business. Przybylinski says PLM is a somewhat trickier area for the cloud, since companies always have ongoing concerns around the security of their design IP. But as they find a better comfort level, the cloud will definitely influence where PLM is going.
The software companies have turned to annual subscriptions as a way of guaranteeing their revenue. How about lowering the annual cost to improve sales? I have never once felt like I've gotten a good deal from an annual subscription. When I see software bugs cross major revisions, I know that my money is NOT being used correctly.
I think you're right, Loring, on the frozen hires, but I guess as a relative expense, investing in design tools is a less costly way to wring more productivity out of what you have. In covering this area, I hear over and over again how moving to more of a digital prototpying process saves invaluable time and money. And that's not just vendor speak. It's from hands-on engineers in real companies.
Great news, and surprising, frankly. Most companies I talk to seem as frozen as the proverbial deer in the headlights for buying new development tools, hiring new employees, etc. Hope this trend continues, debt ceiling pact or no...
It is indeed good news. I think given a range of factors, from increasing regulation, which Rob mentions, and companies' willingness to invest in technologies over new hires (thanks Doug), to innovation lying at the heart of companies' competitive strategies, are all important to building a business case for CAD/PLM investment.
To your point Doug, PLM has long been positioned as the superset, encompassing MCAD/ECAD and other design tools as the content creation piece with PDM being the repository backbone. But even the concept of PDM has expanded, with it not just being "the one version of the truth" for engineering data, but a broader repository that includes customer requirements, service data, even marketing requirements.
Interesting story Beth. This story confirms two bigger trends we've been seeing. One of the emphasis on productivity-oriented spending. Companies are showing more interest in investment that boost productivity of existing working workers than in making new hires. The second is an increase in interdisciplinary collaboration that Alex wrote about recently.
It's also interesting to see product lifecycle management (PLM) defined so broadly, including mechancial CAD. I had always though of PLM as a niche that dealt with an expanded view of product data management.
This is good news, Beth. Sounds like there was only one down year. Since 2008 represented the high-water mark and 2010 had 9 percent growth, only 2009 was down. Looks like the trends in mobile, cloud and environmental are helping to push things up. The environmental compliance duty will likely continue to push this sector, since new regulations are always on their way, and old regulations are always getting revised.
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