Touring the Plant Engineering Show: Software programs head for the internet

Maintenance software providers clearly see the internet as the technological high ground. But attendees at the National Plant Engineering Show may have had a hard time spotting this trend.

05/01/2000


Maintenance software providers clearly see the internet as the technological high ground. But attendees at the National Plant Engineering Show may have had a hard time spotting this trend.

Anyone looking for a dramatic post-Y2K shift in the EAM/CMMS industry was probably disappointed with this year's show, held in Chicago in March. With a few exceptions, the show looked remarkably like last year's with the same vendors showing what appeared to be the same wares.

But first glances can be deceiving.

The end of the 1990s supposedly saw a lot of software packages purchased to replace legacy systems that were not Y2K compliant. If this premise is true, then one should expect the EAM/CMMS market to soften in the coming years. The late 1990s were very good to the industry, especially to top-tier vendors. What will the coming years bring?

If the software vendors' booths at the NPE show are any indication, the new decade is starting out strong for the industry. But there are signs of change. A common message among the top-tier solution providers was an emphasis on their installed bases. Vendors are increasingly looking toward existing customers for new revenue streams. This perspective doesn't mean they are forgoing new accounts. However, they are starting to provide new services that can be sold to their client base as well as finding ways to extend the reach of their existing product lines.

Web-centric solutions

Last year, the talk centered on web-centric and thin client architectures, but only a couple of vendors showed solutions that were 100% internet/intranet deployable. This year, web-centric architectures have become a de facto standard for top-tier suppliers. Vendors who have embraced this technology didn't do so because they like rewriting code. They made the move because they believe it is a requirement for major players in the marketplace.

Web-centric and thin architectures lower the total cost of ownership (TCO) by moving processing off difficult-to-administer desktops to centralized servers. More importantly, they make it easier for vendors to provide enticing new products like e-procurement modules and application hosting services.

Not every EAM/CMMS vendor at the show was touting a 100% web-centric system. Second-tier vendors were still showing client/server and Windows-based packages. But even most of these vendors were featuring web-based add-ons for work order requests, inquiries, and purchase requisitions.

ASPs

Moving processing from client desktops to back-end application servers lowers TCO by centralizing resources. But it still requires expensive hardware and personnel. A way to further reduce TCO would be to take the customer out of the hardware procurement and data center administration business. A third party with sufficient resources could provide these back-end services through a remote connection link and spread out their operating costs among many customers.

Application service providers (ASPs) are in the business of hosting application software. They provide access to application software and databases loaded on servers maintained and operated at their sites. Customers typically pay monthly fees to use this software through the internet or other remote connection.

This concept isn't new. Back in the "good old days," we called them service bureaus . They rented computer time to outside users to run applications. Economics and technology drove customers to acquire their own machines and run their own data centers. However, economics and technology are starting to make such outsourcing attractive again. Anyone who has lived through a costly implementation appreciates the advantages of renting software and computer time over ownership.

There was a lot of talk about ASPs at the show, but only a few vendors actually offered ASP solutions. Most vocal among these was Fluor Daniel's TabWare OnLine. A glimpse at the booth was enough to see where this company thinks the EAM/CMMS industry is going. They fervently believe the ASP model is going to dramatically change the way businesses acquire and use EAM/CMMS technology.

TabWare OnLine is not alone. Mincom provides ASP and other IT outsourcing services through their Tequinox division. Indus, PSDI, Datastream, and Mainsaver are working on their own initiatives. Economics driven by technology are pushing them in this direction. ASPs are still a new concept. But I have to believe they are going to be attractive to many businesses that cannot justify the high cost of purchasing and implementing EAM/CMMS software. I certainly believe that ASPs will be a common commodity at next year's show.

e-Procurement

At last year's show, e-procurement was more a concept than a reality. PSDI and Datastream had e-procurement products. But the power of e-procurement was mostly talk. This year, there was more talk and also more action. For most EAM/CMMS vendors, the action centered on accessing vendor catalogs and transmitting purchase orders over the internet. The only EAM/CMMS vendors showing an integrated multi-supplier trading network through a single internet portal were still PSDI and Datastream with their respective MRO. com and iProcure products. However, Indus was showing a Beta-test version of their new internet portal, myIndus. com, that will include an e-procurement trading community.

At the show, Datastream announced an agreement with PurchasingCenter. com to give their iProcure customers access to PurchasingCenter.com's supplier network. PSDI's MRO.com announced the acquisition of Intermat, a provider of content-management tools and catalog services. With these tools and services, PSDI hopes to draw more suppliers into its ever-expanding network.

EAM/CMMS vendors were not the only exhibitors touting business-to-business e-procurement for maintenance and industrial supplies. Several "dot com" companies promoted their electronic MRO marketplaces. These included 44 Degrees, 1sourcetools. com, TradeOut.com, and PurchasingCenter.com. In addition, traditional catalog services like Thomas Regional and distributors such as Grainger demonstrated e-commerce solutions.

The power of "i"

The influence of the internet on the EAM/CMMS industry didn't stop with these show initiatives. The Indus booth provided a view of the future through a Beta-release demonstration of their myIndus.com web portal. As was noted earlier, myIndus.com provides access to an MRO trading network. It will also contain training and educational materials, discussion groups, and other services for plant maintenance.

'Indus' goal is to provide a single gateway or portal into the web for maintenance professionals. This portal could be used to buy MRO parts or books. It could be used to take a training course. It could even be used to access an Indus EAM application. Most top-tier vendors said that they were pursuing portal strategies. It almost sounds as if they see themselves becoming dot-com companies instead of software vendors.

What's lies ahead?

What does all this activity mean for industry and for end-users? EAM/ CMMS vendors are moving out of the old software supplier mode and becoming full service providers. Economics and technology are pushing them in this direction.

In the 1990s, an EAM/CMMS project commonly took a couple of years to pay for its implementation costs in generated savings. In the coming decade, more and more businesses won't be able to wait that long. Their world will be moving too fast for the traditional implementation model. Service-oriented vendors that generate results quickly will win the high ground in the EAM/CMMS industry.

I can't foresee what the coming years will bring in terms of revenue growth to the industry. But if this year's show is any indication, vendors still believe there is a lot of money to be made. They also know they must change their business model to be successful. So what will we see at the show next year? Very likely a lot more of what we've just seen.

Tom Singer is an information technology consultant who specializes in designing, developing, and implementing systems solutions that meet client operational needs. He has worked both as a developer and integrator of CMMS solutions. He is a project manager with Tompkins Associates, a total operations consulting firm headquartered in Raleigh, NC. He can be contacted by phone at 630-472-1524 or by e-mail at tsinger@tompkinsinc.com.





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