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by Jeff Moad, MA Editorial Staff
Posted on Thursday, August 09, 2007 5:40:00 PM Sign Up to receive Daily News Alerts in your E-mail Inbox    | Abstract: | In the wake of moves by Oracle and Siemens, the business applications leader announces a three-year plan for its product lifecycle technology that keeps much of the development in-house and the product itself within the larger ERP suite.
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| Keywords: | SAP, PLM, product lifecycle management, product life cycle, roadmap, new product development, product portfolio, design collaboration, Oracle, Agile, Siemens, UGS |
Facing intensifying competitive pressure from a host of large technology providers targeting the product lifecycle management (PLM) market, SAP AG yesterday laid out its own PLM roadmap covering the next three years. SAP said the first leg of its roadmap is set to kick off at the end of this year with enhancements to the new-product portfolio planning features of its current PLM suite. The roadmap stretches through 2010, when SAP will integrate its PLM suite with popular digital manufacturing tools and allow users of its software to automate the design, simulation, and tracking of digital design and manufacturing processes, the company said. SAP's strategy announcement follows the entry into the PLM market earlier this year of two large technology providers — Siemens AG and SAP arch-rival Oracle Corp. — via acquisitions. Siemens in January announced plans to acquire PLM and CAD software provider UGS for $3.5 billion. And in May, Oracle announced plans to purchase pure-play PLM software vendor Agile for $495 million. SAP officials, however, denied that the timing of the company's PLM roadmap announcement is a response to those moves. "We want to show our customers, prospects, and the whole community that SAP is committed to PLM and that we see it as a strategic area where we have invested heavily and where we will continue to invest heavily," said Thomas Ohnemus, director of PLM solution marketing at SAP, in an interview with Managing Automation. "We want to show that customers can rely on our commitment," said Ohnemus, who noted that SAP has been working on its PLM roadmap plan for over a year. More than a response to Oracle, SAP's announcement is recognition, first, that the PLM market continues to grow rapidly and, second, that "SAP has some weaknesses in the PLM portfolio that they need to shore up," said Ed Miller president of CIMData Inc., a PLM consulting firm. "SAP has been amazingly candid in looking at both its strengths and weaknesses in the PLM space," Miller said. "This is the most significant announcement from SAP in the PLM space to date." While SAP's PLM revenue grew by 8% in 2006 to $411 million, the company lagged the overall PLM industry growth rate of 9.7% that year, according to AMR Research. AMR's recent "PLM Market Sizing Report" puts SAP at number six in the space with 4% of the market by revenue. Ahead of SAP, according to the report, are Cadence (13% market share), Dassault (13%), Siemens/UGS (10%), PTC (8%), and Mentor Graphics (7%). (Some of those providers, such as Cadence and Mentor, are primarily in the CAD market.) SAP's PLM roadmap included the following commitments: - At the end of this year, the company will enhance its current PLM suite with new-portfolio planning processes that will let manufacturers reduce time to market for new products.
- In 2008, SAP said, it will simplify its PLM user interface with UIs designed for users in specific roles. Also, the company will add capabilities for new product development collaboration.
- In 2009, SAP will introduce a package that will broaden the scope of its PLM suite to address the management of all product-specific information, including idea generation, product design, customer requirements, variant configuration, and maintenance. Ohnemus said the solution will allow users to manage the design of services as well as manufactured products.
- In 2010, SAP will integrate its systems for tracking design information with tools for managing and simulating digital design and manufacturing processes. Specifically, Ohnemus said, SAP plans to integrate its PLM suite with digital manufacturing tools, such as Dassault's Delmia and UGS' Tecnomatix. SAP will rely on partners for that integration, Ohnemus said. SAP also plans to enable manufacturers to track product usage and performance information via radio frequency identification (RFID) technologies and to allow that information to be fed back into the product design process.
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