CIMdata PLM Industry Summary Online Archive

17 August 2004

CIMdata News

A New Report from CIMdata Provides Detailed Analysis of the PLM Market

Consulting and research firm CIMdata announces the availability of its 2003 PLM Market Analysis Report. This Report provides the most complete analysis of the 2003 Product Lifecycle Management (PLM) market available, with special emphasis on the collaborative Product Definition management (cPDm) segment of that market. The Report provides a perspective on PLM across a variety of industry and geographic sectors, identifies market trends, reviews investments in PLM-related software and services during 2003, and forecasts PLM investments for 2004 through 2008. The Report comes in two modules. Module I provides on introduction to the market, overall market statistics, and an analysis of PLM suppliers in 2003 and Module II discusses PLM market development and results across industry and geography sectors.

The PLM Market Analysis Report is sold as a stand-alone report, or as part of a CIMdata PLM Market Service subscription. The report includes over 130 figures and tables that provide a broad understanding and deep insight to the PLM market and investment trends and opportunities. The Report also provides information on what PLM is, why companies are investing in these solutions and the emerging areas for which companies are demanding new PLM solutions. Leading PLM solutions suppliers are identified by a variety of factors and domains. This Report is essential for obtaining the knowledge of PLM and the PLM market that both user companies and PLM solution suppliers need to develop PLM strategies and define their PLM programs. For pricing and further details, please contact CIMdata at 734-668-9922, or http://www.cimdata.com/publications/reports.html or visit http://www.cimdata.com/subscription/subscription.html for further details about the Report as well as CIMdata's PLM Market Service.

CIMdata defines PLM as 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, and spanning from product concept to end of life-integrating people, processes, business systems, and information. PLM forms the product information backbone for a company and its extended enterprise. For a detailed definition of PLM, go to the CIMdata website at: http://www.cimdata.com/PLM/plm.html.

According to Ken Amann, Director of Research, "CIMdata partitions the PLM market into two primary segments: cPDm and Authoring and Analysis Tools. Authoring and Analysis Tools include the primary design authoring tools such as mechanical and electronic computer-aided design (MCAD and ECAD), computer-aided software engineering (CASE), and technical publishing. cPDm is focused on collaboration, management, and sharing of product related information."

Regarding the PLM market performance, Mr. Amann said, "The 2003 overall PLM market grew by 4% over 2002 to approximately $14 billion. Of that, approximately 67% or $9.5 billion was invested in Authoring and Analysis Tools while 33% or $4.6 billion was invested in cPDm. Both PLM segments grew in 2003, with cPDm investments increasing more rapidly with a growth of approximately 9% over 2002." Figure 1 below shows the overall PLM market size. The forecasts are based on data available through the first quarter of 2004.

Figure 1-Overall PLM Investment History and Forecast (estimated for 2004 to 2008)

CIMdata's analysis indicates that investments in cPDm software including perpetual license sales, right-to-use fees, subscriptions, recurring fees, and maintenance, increased from $1.64 billion in 2002 to $1.94 billion in 2003 and comprised 42% of the total cPDm market. This represented a return to license growth after two years of decline. cPDm services investments grew to $2.6 billion, up from $2.5 billion in 2002 and represented 58% of the 2003 cPDm market. Commenting on CIMdata's estimates for the 2004 cPDm market, Mr. Amann said, "We project this market to grow at a rate of 11% to $5 billion." He added that with the general improvement in global economic activity and the release of new investment funds by companies may improve the forecasted growth. Figure 2 highlights the cPDm estimated market growth through 2008.

Figure 2-cPDm Investment History and Forecast (estimated for 2004 to 2008)

Note: Software includes: one-time payments (paid licenses) plus recurring fees such as right to use, subscriptions, and maintenance

Looking toward 2008, the PLM market as a whole is estimated to grow at a CAGR of 8% to exceed $20 billion. cPDm is forecasted to be the fastest-growing segment of the PLM market with a 14+% CAGR to exceed $9 billon in 2008. The Authoring and Analysis Tools segment is forecasted to grow at a slower 3+% CAGR over the next five years, reaching approximately $11 billion during 2008. A wide range of companies that provide many different types of products and services serve the PLM market. These suppliers are segmented into three major categories: 1) comprehensive technology suppliers; 2) system integrators/resellers/VARs (non-technology developers), and 3) focused application providers. For the cPDm segment of the PLM market in 2003, comprehensive suppliers comprised 50% of that segment, focused application suppliers held 17%, and the independent system integrators, resellers, and VARs had 33%.

Ed Miller, CIMdata President and CEO, explained that in this broad market, a small number of PLM suppliers are generally considered to be the industry leaders, "These are the PLM Mindshare Leaders who have achieved this recognition based on the size and scope of their PLM implementations at customer sites; and their technology and thought leadership in the PLM market."

According to Mr. Miller, the PLM mindshare leaders during 2003 were Agile, EDS Corp, IBM+DS (the combined IBM and Dassault Systèmes program), MatrixOne, PTC, and SAP. In early 2004, EDS sold its PLM Solutions Group to private investors, establishing UGS as an independent entity. However, during 2003, they were still a part of EDS, therefore EDS is the entity that was present in the industry during 2003 and is reported in this analysis of the 2003 PLM market.

Of the PLM mindshare leaders, the two with the largest direct revenues in 2003 were EDS and IBM+DS. When considering direct PLM revenues only, EDS was the leader, followed in order by IBM+DS, PTC, SAP, MatrixOne, and Agile. (Figure 3).

Figure 3-PLM Mindshare Leaders- Revenues-2003
(Revenue information represents CIMdata's estimates)

To provide insight as to the impact of UGS becoming a stand-alone company in 2004, the green arrow represents what UGS "would have been" if it had been treated as a stand-alone entity in 2003. The blue arrow indicates the equivalent measure for Dassault Systèmes if they had been treated as a separate entity in the analysis.

Direct revenues are only one measure of a supplier's impact on the PLM market. Many suppliers provide technologies through both their own field sales and support organizations and system integrators, resellers, and other partners. The combined core (a vendor's direct software and services revenue) and partner revenues are the measure of the visibility and impact of these suppliers on the industry; this represents their overall "market presence". Market presence also provides some insight as to how many other solution providers support a given supplier's technology and products.

When considering overall PLM market presence, Dassault Systèmes was the leader, followed by EDS, PTC, SAP, MatrixOne, and Agile (Figure 4). For Figure 4, please note that Dassault Systèmes provides the technology. IBM's PLM revenues are included as part of DS' partner revenues.

Figure 4-PLM Mindshare Leaders’ Presence-2003
(Market presence information represents CIMdata's estimates)

Please note that EDS Corp includes revenues for UGS PLM Solutions plus PLM-related revenues from other EDS business units not credited to the UGS PLM Solutions Group. IBM+DS includes IBM's Dassault-related revenues plus IBM's non-Dassault-related PLM revenues and Dassault Systèmes direct revenues not derived through IBM. The 2003 revenues for Agile+Eigner includes all revenues for both Agile and Eigner during 2003 even though the Eigner acquisition was not completed until September of 2003. It is also important to note that Agile, MatrixOne, and SAP do not develop Authoring and Analysis Tools, which provide a substantial portion of the PLM revenues for EDS, IBM+DS, and PTC.

Mr. Amann concluded that, "2003 was a strong year for the PLM industry. User companies released investment funds for PLM, particularly during the second half of the year, and this fueled the industry's growth. Return to growth in license and subscription sales, along with strong adoption by mid-size companies will sustain continued growth into the future. We anticipate increased growth in 2004, and increased competition among suppliers as each focuses their attention on sectors of the industry that offer the most opportunity."

 

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