Industry spotlight: Executives discovering value of PLM software
Ed Miller, CIMdata, Inc. -- Manufacturing Business Technology, 5/26/2008 2:03:00 PM MDT
Increased executive-level awareness of how product life-cycle management (PLM) software can enhance the product development process—increasing efficiency, lowering costs, and improving quality—is spurring robust sales growth in this market segment.
Because of the far-reaching impact of PLM and its expanding footprint across the enterprise, the approach is now widely regarded as a ‘do-or-die’ competitive necessity in a turbulent global economy where companies leveraging these solutions will likely be among the top performers in the coming years.
Thus, we are seeing these numbers. According to recent statistics compiled by CIMdata, the worldwide comprehensive PLM market experienced a stronger-than-expected 13.5 percent growth rate to reach an estimated $24.3 billion in 2007 for software and related services. The increase exceeds earlier estimates, with the boost attributed to recognition of the enterprise-wide value of PLM, most particularly in light of continuing predictions of possible global economic downturn. Comprehensive PLM covers the full product definition over the entire product lifecycle, and across all industrial sectors. This includes mechanical, electronic, and software components, as well as both discrete and process industries. Investments are forecasted to continue their steady climb over the next five years, increasing at a compound annual growth rate of approximately 9.8 percent and expanding the market size to nearly $40 billion by 2012.
CIMdata also provides another perspective on the PLM market by reporting (for the first time in 2007) statistics on Mainstream PLM, a subset of Comprehensive PLM encompassing several sub-sectors traditionally addressed by major PLM suppliers. Mainstream PLM growth is expected to continue its steady climb over the next five years, increasing at a compound annual growth rate of approximately just over 10 percent and expanding the market size to over $25 billion by 2012.
Three major sectors comprise Comprehensive PLM:
• collaborative Product Definition management (cPDm) applications and solutions to capture, manage, disseminate, visualize, and collaborate on product-related intellectual (digital/virtual) information, including related processes.
• PLM Tools that create intellectual assets through authoring, analysis, modeling, simulation, and documentation of product and plant/facility information.
• Digital Manufacturing systems for process planning, resource definition, factory floor layout, and product flow simulation and analysis—including ergonomics.
Historically, the Tools sector receives the largest amount of investment in the PLM market. According to CIMdata, $16.0 billion was spent in 2007 by companies worldwide on PLM Tools such as mechanical computer-aided design (MCAD), computed-aided manufacturing (CAM), electronic design automation (EDA), engineering simulation and analysis, architecture/engineering/construction (AEC), technical publishing, and others. The Tools portion of the PLM market is forecasted to grow at a CAGR of 7.4 percent over the next five years to reach $22.9 billion by 2012.
The fastest-growing sector of PLM is for expenditures on cPDm, which covers technologies and approaches such as PDM, collaboration and visualization, data exchange, portfolio management, compliance management, strategic sourcing, enterprise application integration, workflow, functional applications such as configuration management, and solutions for specific industries or businesses. CIMdata research indicates that the cPDm portion of the PLM market reached $7.5 billion in 2007, representing an exceptionally strong increase of approximately 16.3 percent over 2006. The cPDm segment is expected to continue its strong growth to reach nearly $15 billion by 2012 for a CAGR of 14.4 percent.
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This material is excerpted from the in-depth CIMdata 2007 PLM Market Briefing with detailed analysis, industry statistics and comparative charts available from CIMdata Inc. www.cimdata.com +1(734)668-9922.
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