Ed Miller: Industry spotlight: Executives discovering value of PLM software

Because of the far-reaching impact of product life-cycle management (PLM) and its expanding footprint across the enterprise, the approach now is widely regarded as do-or-die in a turbulent global economy where companies leveraging these solutions will likely be among the top performers in the coming years.

Recent statistics compiled by CIMdata indicate the worldwide Comprehensive PLM market experienced a 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 enterprisewide 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 life cycle, 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, expanding the market size to nearly $40 billion by 2012.

CIMdata also provides another perspective on the PLM market by reporting statistics on Mainstream PLM, a subset of Comprehensive PLM encompassing several subsectors traditionally addressed by major PLM suppliers. Mainstream PLM growth is expected to continue over the next five years to a market size of more than $25 billion by 2012.

Three major sectors comprise Comprehensive PLM:

• collaborative Product Definition management (cPDm): These applications and solutions capture, manage, disseminate, visualize, and collaborate on product-related intellectual (digital/virtual) information, including related processes.
• PLM tools: These are used to create intellectual assets through authoring, analysis, modeling, simulation, and documentation of product and plant/facility information.
• Digital manufacturing systems: These solutions involve 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); and technical publishing, among 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, 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.

This material is excerpted from the in-depth CIMdata 2007 PLM Market Briefing with detailed analysis, industry statistics, and comparative charts available at www.cimdata.com.