Was reading Managing Automation’s blog The Edge by Jeff Moad and he poses the question, “Where Did All the Big Software Deals Go?” Jeff says:
…lingering reluctance on the part of manufacturers to commit to significant technology purchases contradicts a core argument made over and over again by vendors of enterprise software: That, by enabling automation and other process improvements, purchasing and successfully implementing enterprise software saves manufacturers money and improves their competitiveness.
If that is true, why aren’t manufacturers rushing to deploy new applications… I think there are a few reasons… Vendors, particularly enterprise software providers, have a history of over-promising and under-delivering. There are other points made, but this one in particular caught my attention. It gets to the heart of the issue that: The enterprise software licensing model is broken, particularly in PLM.
Spending millions up-front before it’s even clear that the PLM software will work is a bad idea. Seems to me that the real question is not “where did the big deals go?”, but “why did it take so long for big deals to go away?”
Companies need to eliminate risk and ensure value before CFO-level spending commitments are made. That’s why the open model is so powerful. Because you can prove to yourself (and the executives) that the PLM solution will solve the challenges that confront your business with no risk and only incremental resources (and no license expenses).
This is a fundamentally different approach to addressing business initiatives with enterprise PLM software solutions: Get rid of the risk, ensure success, end of story.
What’s your take? Will companies just go back to blindly spending millions on each PLM purchase next year? Or has the time come for validation and proof to rule the day?