Product lifecycle management: Strong market growth should continue
Ann Arbor, MI —The worldwide Product Lifecycle Management (PLM) market showed significant growth in 2006 and should continue to strengthen over the next five years, according to recent statistics compiled by CIMdata Inc ., a consulting research firm. CIMdata indicates the PLM market experienced a "stronger than expected year in 2006," with the overall market growing 10.4% to reach $20.1 billion in 2006. "This strong growth rate," says the research firm, "is attributed to continued recognition of the value of PLM in improving companies' business performance." PLM investments are forecast to continue their climb over the next five years (see illustration).
CIMdata describes PLM as not just a set of technologies, but a strategic business approach that applies a consistent set of business solutions in support of the collaborative creation, management, dissemination, and use of product definition information across the extended enterprise from concept to end of life—integrating people, processes, business systems, and information. The firm segments the overall PLM market into PLM information authoring and analysis applications (tools), and collaborative Product Definition management (cPDm). Historically, it says, the tools sector has received the largest amount of investment, although growth of that sector has consistently been slower than that for cPDm. However, industry investments in tools were above forecasts in 2006.
According to CIMdata, $13.2 billion was spent in 2006 by companies worldwide on such PLM tools as mechanical computer-aided design (MCAD), computed-aided manufacturing (CAM), electronic design automation (EDA), and engineering simulation and analysis. Growth in this sector was primarily driven by investments in EDA (up 11.9%) and mid-range MCAD (up 11%). The tools portion of the PLM market is forecast to grow at a CAGR of 5.3% over the next five years to reach $17.1 billion by 2011.
The fastest-growing sector of PLM is for expenditures on cPDm, which is focused on collaboration, management, and sharing of product-related information, says CIMdata. The research firm considers this segment to cover technologies and approaches such as PDM, collaboration and visualization, data exchange, portfolio management, compliance management, strategic sourcing, enterprise application integration, workflow, functional applications such as configuration management, and solutions for specific industries or businesses.
"Strong market growth continues to be driven by heavy investments from manufacturers of all sizes implementing PLM in record numbers," explains Ed Miller, CIMdata president. "Across a broadening range of industries, some of the world's largest enterprises are improving top-line revenue growth and bottom-line performance as they transform their business processes. Impressive gains are likewise being experienced by smaller and mid-sized firms using PLM to boost productivity and improve competitiveness… PLM is enabling enterprises of all sizes to bring continuous streams of winning products to market more efficiently, accelerate their product development and introduction processes, maintain high quality, and provide greater agility in adapting to rapidly shifting market and competitive trends."
The CIMdata report on PLM market growth and the range of PLM suppliers offers more detail.