CIMdata Press Releases
CIMdata Cites Opportunities and Challenges for Solution Providers in Expanding PLM Market
Trends and strategies outlined at worldwide PLM Vendor Forums: the premier global gathering of PLM technology and service providers.
ANN ARBOR, Michigan, April 20, 2006 –According to consulting and research firm CIMdata, Inc., the product lifecycle management (PLM) market is experiencing continued strong growth as it extends its scope broadly throughout the digital product lifecycle, more deeply into product development, and into heretofore largely untapped industries and applications at companies of all sizes. This expansion presents PLM software and service providers with unprecedented business opportunities but also confronts them with significant challenges as they battle for increased market share, and in many cases, their very survival.
These and other topics were discussed at the recently concluded series of CIMdata PLM Vendor Forums held in Detroit, Stuttgart, and Tokyo during March and April. CIMdata’s annual events represent the world’s premier gathering of PLM technology and service providers to focus specifically on the PLM market and issues concerning its development and growth. Participating companies come together to both hear CIMdata’s perspective on market development and trends, and to discuss important issues impacting PLM strategy and business performance.
“As PLM evolves and matures, solutions are becoming more holistic and the enterprise footprint of PLM is reaching far beyond engineering to incorporate initiatives such as product portfolio management, digital manufacturing, after-sale service and support, compliance, strategic sourcing, and many others,” said CIMdata President Ed Miller in his State of PLM address. “Moreover, PLM continues to drive even more deeply into the design phase of the product lifecycle through solutions aimed at managing data and processes related to simulation and analysis, as well as complete product designs that blend mechanical, electronics, and embedded software.”
According to Miller, PLM also is increasingly being used at small- and mid-sized companies and has the potential of being more widely applied in a broad range of industries and applications such as consumer packaged goods and plant management as well as healthcare, banking, insurance, publishing, mass transit and trucking, among many others.
“This expansion represents tremendous business potential for PLM providers in a wide range of new market segments,” Miller explained. “However, to fully leverage these opportunities, significant challenges have to be overcome. Specifically, the supplier’s position and differentiation must be clearly defined in order to stand apart from competitors, and the business value of PLM for the enterprise clarified. Also, domain expertise in the new areas of market focus must be clear and visible. Each supplier has to choose their target markets carefully, since trying to encompass too many areas dilutes their message and spreads resources too thin to be effective.”
“Suppliers effectively meeting these challenges undoubtedly will strengthen their positions in the PLM market in the years to come,” explained CIMdata Director of Research Ken Amann. “Current market leaders as well as niche players are already addressing many of these issues and the resulting expansion of PLM continues to drive strong PLM market growth.”
Amann noted that CIMdata research indicates that the overall PLM grew 8.7% to reach $18.1 billion in 2005 and will continue climbing for the next five years to reach $26.3 billion by 2010 for a 7.7% compound annual growth rate (CAGR). In 2005, an estimated $12.1 billion was spent worldwide on PLM information authoring and analysis tools such as computer-aided design, design simulation and analysis, electronic design automation, design simulation, and technical publishing. Over the next five years, this Tools portion of the PLM market is forecast to grow at a 4% CAGR to reach $14.7 billion by 2010.
The fastest growing sector of the overall PLM market is collaborative Product Definition management (cPDm), which focuses on collaboration, management, and sharing of product-related information. This segment exceeded CIMdata’s previous growth forecasts, increasing 14.7% to reach $6.1 billion in 2005 and is expected to increase with a 13.9% CAGR to $6.8 billion in 2006 and $11.6 billion by 2010.
“The market remains robust and continued growth will be fueled in both software and services as PLM becomes more deeply embedded within business strategies and the overall enterprise,” said Amann. “Now more than ever, PLM is a competitive necessity, and with so much on the line, companies are implementing more comprehensive PLM solutions in record numbers.”