We talked about innovation by manufacturers and product companies, and how PLM software has helped support product innovation. But is there still innovation in the PLM vendor community itself?

Is PLM Done Yet?
I hear a lot about the fact the PLM is becoming a mature market. People like to talk about the consolidation in the industry, and the fact that there are now three larger vendors in PLM - Dassault Systemes, PTC, and Siemens. Does that mean innovation is over in the PLM industry? The simple answer is no. While it's true that those three companies have acquired a lot of companies to grow their capabilities, I believe that is part of an ongoing innovation cycle that is similar to what happens in other industries. Let's face it, big companies have trouble innovating into new areas. Sometimes a larger company can pull together a skunkworks and cannibalize their older products with newer ones, but typically the status quo and momentum of the large company can't compete with the entrepreneurial spirit. When new innovations from these smaller companies catch on, then the larger suite providers have the financial muscle to acquire the new ideas and incorporate them into their own solutions. One recent example is Dassault Systemes' acquisition of Seemage to extend the use of 3D data outside of engineering.

Are the "Big Guys" Done Yet?
Not by a long shot. The big three are still adding to their solutions, and focusing on integrating their capabilities even further. These three are also not the only big suite providers focused on PLM. SAP is quietly continuing on their PLM Roadmap, continuing to enhance their solutions. With their dominant ERP presence, the PLM vendors will always have to stay at least one step ahead. Oracle's acquisition of Agile shows their commitment to PLM as well. And what about Autodesk? While they haven't adopted the "PLM" term and competed in that way, they have some highly relavent capabilities in PLM and have the ability to invest significantly should they choose to. So the larger players must keep innovating, and their customers are not short of ideas and demands. This game is not over.

What's more, our recent Aberdeen report identifies the top twenty PLM-related technology investments from 2008-2010 - and the PLM suite providers don't have the corner on the market for many of them. And preliminary results Aberdeen's annual report, not yet released, indicate that manufacturers' budgets are increasing this year related to product innovation, product development, and engineering. Someone will step up in an innovative way to help them spend that money. And competition should ensure that they get value in return for their money.

Are the "Small Guys" Done Yet?
If you look at the opportunity to create a new Dassault, PTC or Siemens I would say that opportunity has passed for smaller companies. I may eat my words later, but they are strong companies with large installed bases (and therefore large maintenance revenue streams). They could be acquired themselves, of course, but that would just make a bigger competitor. So the opportunity to be a new generalist suite player is over in my opinion. But there are still specialty opportunities. One case in point is the recent funding that Centric Software received to further their focus on PLM for the apparel and consumer industries. Clearly, they still see an opportunity for PLM in this industry segment (along with a large number of others in this space). Arena Solutions just hired Craig Livingston who used to run Agile's sales for Small to Midsize Businesses (SMB). Clearly they see an opportunity in SMB, particularly with their SaaS (software as a service) offering.

Consolidation, yes. Stagnation, no. So there is still territory for vendors to win and lose - and because of that there will be continued innovation. There are many problems yet to be solved, and integrating the solutions required to compete in today's fast-paced, global market will still take time.

Sorry for the long post, I am curious if you see this the same way as I do and I look forward to your comments...