Is the Cloud the Way to Go?

As I watch many IT news channels tout the benefits of cloud PLM or anything “cloud” for that matter, I wonder if this is actually a reality or if there is an unrealized danger.  Many IT applications have found their way to the cloud, and from what I have gathered, these are some of the benefits to the host as well as the customer:

For the Host

1. The host does not have to maintain costly roll-out processes by simply maintaining a central installation and updating/patching/upgrading the installation and providing customers with advanced notice of the change.
2. The host can rent or lease software for a monthly fee, which assures the customer will stay with them forever, or at least make it very hard for the customer to “shop around.”
3. By keeping a central installation, the number of variables encountered by on-premises installations are practically eliminated, reducing the need for the host to maintain a large support group.

For the Customer

1. The customer can enjoy the global and mobile benefits not normally seen with an on-premises installation.
2. By not requiring an on-premises installation, upkeep is minimal and disaster recovery is as simple as a phone call.
3. Cloud applications claim to have a higher customer user acceptance rating.

Since I am neither a software provider or a customer, I can be a little more objective about the cloud approach and wonder, is this really all just hype?

Let’s take a step back and review what a cloud offering provides.  Arena, a relatively new cloud-only PLM software package is geared towards start-ups and smaller companies.  According to their website (http://www.arenasolutions.com/resources/articles/cloud-plm/):

“While cloud PLM solutions and on-premise PLM solutions both work to manage product data, there are some unique traits of cloud PLM solutions that can benefit manufacturers. Manufacturers can use cloud PLM systems to simplify change requests and orders, streamline supply chain interactions and dramatically increase efficiency.”

Although this may be true from a clinical sense, I think there are some key points that are missed – otherwise, all manufacturers would be banging on Arena’s doors.  Here is where I have a few concerns and where I expect the prospective cloud customer may have doubts, or where they will see a deal-breaker:

1. For the startup, the cloud is a perfect place to begin because they have no legacy data.  99% of all other companies will want to access their current product database and not have to figure out how to fit their specific data into a predefined model.
2. Certain processes and business workflows are labeled by Arena as “collaborative” by virtue of being on the cloud, but it does not take into account the customer-specific requirements that are inherently part of a customized or configurable on-premises offering.
3. Cloud systems claim integration, but again, customer-specific data does not appear to be available from a CAD perspective or from an ERP perspective.  Either way, data is either lost or cannot be effectively managed.

To sum up what I see, the cloud offering can be a simple yet effective solution for the smaller company that is willing to take a hit on functionality.  Most other manufacturers will need to take a long, hard look at whether cloud support is within their buffer zone.

Brian