Growing the PLM Market

Jan. 11, 2008
Strong PLM growth will propel market to exceed $30 billion by 2011.

In 2006 businesses seeking improved performance grew the overall product lifecycle management (PLM) market 10.7% to reach $20.6 billion for the year, reports CIMdata Inc. Research by the Ann Arbor, Mich., consulting firm forecasts continued worldwide growth at 8.5%, reaching an estimated $30 billion by 2011. What's more, all geography and industry sectors are sharing in the strong growth.

According to CIMdata, $13.2 billion was spent in 2006 on product data management tools such as mechanical computer-aided design (MCAD), computer-aided manufacturing (CAM), electronic design automation (EDA), engineering simulation and analysis, technical publishing and others. That growth was primarily driven by investments in EDA and mid-range MCAD. Areas such as high-end MCAD and simulation and analysis experienced relatively lower growth. The tools portion of the PLM market is forecast to grow at a CAGR of 5.3% over the next five years to reach $17.1 billion by 2011.

The fastest-growing sector of PLM is for expenditures on cPDm (collaborative Product Definition management), which is focused on collaboration, management and sharing of product-related information, says Ken Amann, CIMdata's director of research. Technologies and approaches covered in cPDm include PDM, collaboration and visualization, data exchange, portfolio management, compliance management, strategic sourcing, enterprise application integration, workflow, functional applications such as configuration management, and solutions for specific industries or businesses.

The largest cPDm adopters continue to be the automotive and high-tech sectors, says Amann. The study indicates the cPDm portion of the PLM market met the forecast for growth and reached $6.9 billion in 2006, representing an increase of approximately 13.6% over 2005. The cPDm segment is expected to continue its strong growth to $7.8 billion in 2007 and reach $13 billion by 2011 for a CAGR of 13.6%).

Amann says the solution providers that have broad product suites designed to manage the full lifecycle -- comprehensive technology suppliers -- represent the foundation of PLM. These suppliers continue to expand their product suites to meet the needs of their customers. "Increased end-user investments are being driven by the continually-broadening scope of enterprise-wide implementations, expansion into new areas such as digital manufacturing, strategic product planning, compliance management, industry-focused packaged solutions and integration with other business initiatives such as customer relationship management (CRM)," explains Amann. Both comprehensive PLM technology suppliers and focused application suppliers are packaging their products into solutions that focus on support, the practices of specific industries (automotive, aerospace, high-tech electronics) and business problems, e.g. compliance.

"The growth of supplier-developed 'packaged solutions' is significantly enabling small and medium-sized businesses to adopt PLM solutions," Amann explains. "Mid-market investment in PLM continues to grow and PLM solution providers are fine-tuning their product suites and pricing models to better meet mid-market requirements for PLM adoption."

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