Product development worries trigger technology investments
Manufacturers worldwide will spend more than $4 billion on product life-cycle management (PLM) software over the next four years, according to an April study released by London-based Datamonitor. More than 150 manufacturers in North America and Europe cite increase priority on agility in product development over production-process improvements to address growing market demand for innovative pro...
Manufacturers worldwide will spend more than $4 billion on product life-cycle management (PLM) software over the next four years, according to an April study released by London-based Datamonitor . More than 150 manufacturers in North America and Europe cite increase priority on agility in product development over production-process improvements to address growing market demand for innovative products. This, combined with shrinking product life cycles, is driving adoption of PLM solutions.
“The surprise was the priority given to product-development processes,” says Adam Jura, manufacturing technology analyst and one of the authors of the Datamonitor report, Supporting Product Development With Cutting-Edge IT . “There's a shift in focus from typical cost cutting and lean toward internal and external collaboration around product development,” adds Jura. “Key customer demand cycles are growing shorter: They want better products at lower costs.”
Regulatory compliance is another driver. “The development of hybrid engines is a classic example of product-development collaboration,” Jura points out—one that has been aided by automated PLM. The automotive, high-tech, electronics, and aerospace & defense industries are leading the way in greater adoption of PLM as a core part of their product development and regulatory compliance efforts.
Datamonitor says 2007 promises to be a blockbuster year in terms of PLM adoption. “Consolidation will continue. We identified Agile as a likely candidate in the report that came out in late April, and two weeks later [intent to acquire] was announced by Oracle ,” says Jura. “The Siemens-UGS deal is another indicator. These acquisitions will no doubt generate responses from other vendors. Big moves have already been made, and it will be interesting to see how competitors will react.”
Another incentive driving the market will be an increasing number of dynamic PLM business cases coming to light—e.g, Dassault Systemes at Airbus and Boeing. As to who might be the big winner, Jura says the Siemens-UGS and Oracle-Agile pairings could take 18 months before the combined synergies truly deliver big gains.
“UGS with Siemens has tremendous potential; UGS was strong to begin with. [Enterprise vendor] SAP still has strong penetration in the market. It has good basic functionality,” says Jura.
Yet for 2007, Jura says Dassault is most likely to be the one to march onward. “It will continue with marquee deals like Airbus attracting new customers,” he says. “It has a range of good products. For 2007, they're who I'd put my money on.”
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