Preliminary Statistics from CIMdata Show a 12% “Mainstream PLM” Market Decline for 2009

CIMdata PLM Industry Summary Online Archive

9 February 2010

CIMdata News

Preliminary Statistics from CIMdata Show a 12% “Mainstream PLM” Market Decline for 2009

CIMdata, the leading global Product Lifecycle Management (PLM) consulting and research firm, today released its preliminary 2009 worldwide Mainstream PLM market results. Mainstream PLM is a subset of the Comprehensive PLM market (see explanatory note about CIMdata’s PLM market perspectives later in this press release), which encompasses market sectors that have traditionally been the most closely associated with PLM including:

Mechanical Computer-Aided Design (MCAD), both Multi-Discipline and Design-Focused
Digital Manufacturing
Simulation and Analysis
Non-Bundled Numerical Control (NC)
Comprehensive collaborative Product Definition management (cPDm)
cPDm Systems Integrators, VARs, and Resellers

CIMdata will release its full PLM market analysis, which includes an analysis of both the Mainstream and Comprehensive PLM markets at its North American Vendor Forum on March 25th of this year. Overall, this past year’s volatile economic conditions that have impacted industries and markets around the world clearly had a direct impact on the PLM Mainstream market. This preliminary perspective on estimated 2009 Mainstream PLM market performance provides an early insight into market dynamics that are affecting both companies investing in PLM as well as PLM solution suppliers. Note that CIMdata’s estimates are based on a combination of primary and secondary data collection, long-time relationships with market participants, and market modeling based on many years of market knowledge and experience.

Based on CIMdata estimates in 2009, Mainstream PLM experienced a decline of approximately12% from $15.96 billion in 2008, to $14.03 billion in 2009. This decline was larger than originally forecasted. This is a preliminary estimate and will be updated prior to the publication in March of CIMdata’s overall PLM market estimates. Note that part of this decline was a direct result of changes in currency exchange rates—primarily the euro versus the dollar. For calendar year 2009, the average exchange rate for the euro versus the dollar declined approximately 5%.

“Even in difficult economic times, industrial companies continued to recognize the importance of PLM as a competitive differentiator.” explained Mr. Ken Amann, CIMdata Director of Research. “In spite of the impact of the global economic downturn, companies continued to maintain their PLM programs and technologies. However, the current economic environment caused companies to refocus their PLM investments to better meet their immediate business goals.” Mr. Amann continued, “In the first half of 2009, companies restricted investments in PLM. This primarily impacted new license sales. For 2009, preliminary estimates indicate that new license sales declined over 18%, maintenance revenues remained flat and services revenues declined approximately 10%. These results indicate that while companies restricted/deferred starting or expanding PLM initiatives, they continued to support and use those programs already in place. During the latter part of 2009, companies began to release funding for PLM programs and sales and revenues started to increase. CIMdata expects that PLM investments will return to growth during 2010.”

Looking deeper into the various sectors comprising the Mainstream PLM market, CIMdata’s preliminary estimates indicate that investments in all sectors experienced declines in 2009 over 2008. Comprehensive cPDm dropped to $2.7 billion, a 10.9% decrease. Investments with cPDm Systems Integrators/VARs/Resellers decreased 10.6% to $3.87 billion. Digital Manufacturing investments declined 12.7% to $445 million. Multi-Discipline MCAD dropped 12.4% to $2.57 billion, while investments in Design-Focused MCAD declined 20% to $1.83 billion. The Simulation and Analysis sector of the Mainstream PLM market experienced a more modest decline of 6.4% to reach $2.13 billion in 2009 while Non-Bundled NC had a 19.1% decline to $475 million. The distribution of these investments as components of the full Mainstream PLM market is illustrated in Figure 1.

Figure 1—2009 Mainstream PLM Market Sector Distributions (Millions)
(Market information represents CIMdata’s estimates)

Mr. Amann commented, “While 2009 reflected a downturn in new PLM investments, companies retained maintenance and continued to spend on services in support of PLM activities already underway. Continuation of PLM programs indicates that more companies recognize the value that PLM provides in helping them maintain their competitive position during difficult economic times. Hardest hit were small- to medium-sized businesses who tend to be more subject to credit and cash flow issues. Many small companies had to stop their PLM investments while larger enterprises had the resources to sustain programs that were already underway.”

Ed Miller, CIMdata President stated, “Even in economic downturns, those companies that sustain investments in PLM can become more efficient both by reducing cost and better leveraging existing resources. Importantly, investing in PLM helps position companies to develop and deliver market-leading products as the global economy improves.”

About PLM

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 from 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.

About CIMdata’s PLM Market Perspectives

CIMdata’s PLM market analysis provides two perspectives on PLM. Comprehensive PLM covers the full product definition over the entire product lifecycle, and across all industrial industries including mechanical, electronic, and software components, as well as both discrete and process industries. Mainstream PLM reflects a view of PLM that incorporates a subset of the Comprehensive PLM market, but includes the sub-sectors that have traditionally been addressed by the major suppliers (i.e., drivers) of the PLM market—the traditional core discrete mechanical functions. Mainstream PLM is comprised of the following major market sub-sectors: Comprehensive cPDm, Systems Integrators/VARs/Resellers, Digital Manufacturing, Multi-Discipline MCAD, Design-Focused MCAD, Simulation and Analysis, and Non-Bundled Numerical Control (NC). Comprehensive PLM includes all of Mainstream PLM, and includes the additional market sub-sectors: Electronic Design Automation (EDA), Architecture-Engineering-Construction (AEC), Focused Applications, and Other Tools.

About CIMdata

CIMdata, a leading independent worldwide firm, provides strategic consulting to maximize an enterprise’s ability to design and deliver innovative products and services through the application of Product Lifecycle Management (PLM) solutions. Since its founding more than 25 years ago, CIMdata has delivered world-class knowledge, expertise, and best-practice methods on PLM solutions. These solutions incorporate both business processes and a wide-ranging set of PLM enabling technologies.

CIMdata works with both industrial organizations and suppliers of technologies and services seeking competitive advantage in the global economy. CIMdata helps industrial organizations establish effective PLM strategies, assists in the identification of requirements and selection of PLM technologies, helps organizations optimize their operational structure and processes to implement solutions, and assists in the deployment of these solutions. For PLM solution suppliers, CIMdata helps define business and market strategies, delivers worldwide market information and analyses, provides education and support for internal sales and marketing teams, as well as overall support at all stages of business and product programs to make them optimally effective in their markets.

In addition to consulting, CIMdata conducts research, provides PLM-focused subscription services, and produces several commercial publications. The company also provides industry education through PLM certificate programs, seminars, and conferences worldwide. CIMdata serves clients around the world from offices in North America, Europe, and Asia Pacific.

To learn more about CIMdata’s services, visit our website at www.CIMdata.com or contact CIMdata at: 3909 Research Park Drive, Ann Arbor, MI 48108, USA. Tel: +1 (734) 668-9922. Fax: +1 (734) 668-1957; or at Siriusdreef 17-27, 2132 WT Hoofddorp, The Netherlands. Tel: +31 (0)23 568-9385. Fax: +31 (0)23 568-9111.

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