A couple of weeks ago, Propel participated in 2 very different events over the same 3 days. One was the glitzy SaaStr Annual in its 3rd year in San Francisco focused on SaaS start-ups and VCs. There was lots of energy, young people, loud music, and open bars on each floor.

The other was the Pacific Design and Manufacturing Event encompassing multiple long-running shows where over 20k engineers flock to the Anaheim to see the latest materials and equipment. This event had lots of noisy equipment, mundane hardware, materials, and rows and rows of mom & pop companies offering their wares… not exactly a millennial’s cup of kombucha.

These two events may seem like a dichotomy in every way — Cloud vs old school; Startups vs established manufacturing companies; San Francisco vs Anaheim. However, I found intriguing similarities to the past that tell me the two worlds of cloud and manufacturing are coming together.

1990’s — the Dot.com Era, birth of PLM

In the late 90’s, during the peak of the dot.com era, the internet was new and intriguing. PLM was also new and offered great advantages over preceding solutions and a shiny, new web-based interface. Although manufacturers were the laggards of technology adoption, given the proof of the ROI and success of early adopters, many manufacturing companies tried the new technology and gained advantages over their competitors.

2000’s — The Enterprise Suite Era

In the 2000’s, large companies like SAP, Oracle, and Microsoft began offering suites of enterprise solutions, buying up smaller companies and their technologies. They offered a one-stop shop of various technologies from one vendor, forcing their customers to standardize on a brand rather than choosing best-of-breed providers. Manufacturers chose the suite, but IT still had to manage the PLM solutions separately.

Now — The Rise of Cloud Platforms

In the 2000’s, Salesforce, Amazon and Google disrupted the market landscape by launching platforms in the cloud on which companies could build and offer their solutions. The AppExchange, Amazon Web Services, and Google Cloud were born. For example, customers already using the Salesforce cloud platform could readily add best-of-breed productivity solutions built on the Salesforce platform that integrated seamlessly.

Fast forward t0 2017, manufacturing is still a cautious industry, but you can see that the cloud is making inroads. Manufacturing companies who are embracing the Internet of Things (IoT) already rely on the cloud. GE, Johnson Controls and John Deere are just some of the companies using cloud applications to gather customer and product inputs.

Even for companies who don’t think they’re ready for cloud applications, there’s commonplace adoption of productivity tools like Office 365, Google Apps, Jira, Slack, etc.

And in the front office, companies use Salesforce and other enterprise systems. It’s engineering and manufacturing departments where traditionalists still need convincing that the cloud is actually more secure than the old on-premise systems.

Now, with the proliferation of enterprise apps built on the Salesforce Cloud App Platform, the shift from the suite to the platform, (Read The next big thing, isn’t just cloud by Daniel Bacon), could be this decade’s inflection point and impetus for Manufacturing making the move to the cloud.

Companies can easily add best-of-breed enterprise solutions without having to manage the infrastructure, a huge benefit to IT. The integration is shortened and simplified, a huge benefit to the CFO and IT. And you get the most modern solutions available and integrated to your customer information, a huge benefit to everyone.

Manufacturing companies are never going to buy a SaaS app because the hipsters at the SaaStr event think it’s really cool. They need proof and assurances that the product, service, or solution will provide value and ROI. That’s why the engineers still come to trade shows to talk to vendors, touch the equipment, and ensure they are making informed choices.

However, the signs are clear. The cloud is coming to manufacturing. The proof and ROI of moving to the cloud are impressive. Previous inflection points foretold the next. And based on the fast-gained momentum of Propel, it looks like it’s coming sooner than later for cloud PLM.

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Ann Latham

Feb 22, 2017