Cloud-based PLM is no longer optional for industrial machinery manufacturers | Podcast
As industrial machinery companies have grown and evolved how they do business, product lifecycle management (PLM) technology has changed, too.
What started with mainframes and evolved through personal computers and local networks has now arrived at a pivotal moment: cloud-based software as a service (SaaS) solutions that fundamentally change the economics and capabilities of PLM.
In a recent podcast conversation between Chris Pennington, Global Industry Marketing Leader for Industrial Machinery at Siemens Digital Industries Software, and Michael Boland, Senior Marketing Manager, the two experts explored how cloud-based PLM technology is removing traditional barriers to PLM adoption, particularly for small and medium-sized businesses.
Listen to the full conversation about cloud-based PLM
Hear what Chris Pennington and Michael Boland have to say about:
- The complete history of PLM evolution and what it means for your business
- Detailed discussion of AWS partnership and security considerations
- Specific guidance on evaluating cloud vs. on-premise PLM
Listen now:
Michael: Yeah, thanks Chris. I’m happy to be here. You know, I work on the development of industry solutions across multiple industry segments. And Chris, I’m interested to hear about your background. How did you get into this line of work focusing on industrial machinery?
Chris: Well, Mike, I’d been with Siemens for over 20 years now in a various number of roles, but prior to this, I held roles in product design and engineering systems management. And over this time there’s been an incredible amount of change in the way that products are developed and produced in particular relating to the IT and software that we use. So my journey into this current role is a bit of a history lesson. So today we all like to have a powerful computer on our desks, especially engineers that are running high-end car door simulation tools. But it wasn’t always like that. Many of the original computer systems ran as dumb terminals that were connected to a powerful mainframe, which was kind of a predecessor to the way that cloud services run today.
In the late seventies, we saw the introduction of personal computers, and through the eighties we saw this transform businesses. I remember being involved with introducing the first PC to my department at that time and pioneering its use. We had one PC shared between 12 staff, but as the number of computers grew, we started to realize that having data spread around on these multiple computers was actually counterproductive. And many other companies along with us moved to then local networks. We started to link computers and set it to centralized data storage. And this is a model that’s been dominant now for some time and businesses have become used to high spending on computer hardware that soon becomes out-of-date. And as a result of the increasing spend on hardware, we have to fund IT departments to manage the infrastructure and the software.
So 20 years ago, working in engineering IT, a good CAD machine could easily cost as much as a small car, and this situation was unsustainable. But thankfully prices started to come down with cheaper hardware and also Windows replacing Unix. But we were still left with fairly high costs and significant effort to maintain the systems. So this was around the time I joined Siemens. I remember having to carry around a very heavy 20-inch CRT monitor to demonstrate software. But over this time we’ve seen the most dramatic change, taking advantage of the worldwide web, not just to distribute information, but also to distribute computer power. And in 1999, Salesforce introduced its CRM software, the first purpose-built SaaS system.
So SaaS is probably a lot older than you might think. And this is really where the story begins and where we can discuss the potential that’s now available to your business. So Michael, what I’m really looking forward to is discussing with you more about what Siemens is doing to simplify the IT challenges of our customers. We’ve seen cloud technology become more pervasive both at home and at work, and this has triggered an increase in software as a service or SaaS solutions. Could you briefly explain what SaaS is and how Siemens are making this technology available to its customers?
Michael: Yeah, software as a service is a way of delivering applications over the internet. We’ve all become users of cloud solutions, you know, often starting with our mobile phones, backing up data to iCloud or Google Drive, but also with file sharing tools like Dropbox. And you know, more recently SaaS applications have become pervasive in our work lives with companies like Salesforce, leading the way with CRM, Microsoft moving from selling the office suite to, you know, a cloud service for document creation and storage.
Chris: So Michael, if I could just interject there, another interesting feature I think with SaaS is that it can run on any device, PC, laptop, or even mobile phone. So the days of needing to carry that heavy CRT monitor around are well and truly behind us.
Michael: Yeah, exactly. And to build on that thought, Siemens Xcelerator offers a broad range of capabilities that take the power of cloud and SaaS further. Our PLM software, Teamcenter has been available as a SaaS solution for some time, you know, under the branding Teamcenter X, but we kind of wanted to take things further and make PLM adoption even easier by increasing the level of pre-configuration and developing industry focused solutions that were ready to go right out of the box. So when it comes to PLM as a SaaS solution, Siemens recognizes the critical role its software plays in managing your data.
You know, and this led us to a decision to partner with the gold standard cloud provider, Amazon Web Services or AWS. Later in the series we’re gonna hear directly from AWS on how they address the security and availability concerns of companies both large and small. So I won’t spoil that episode.
Chris: Oh, thanks Michael. That was a great overview. So as we’ve heard, cloud solutions have been with us for years. Can I ask you, why are Siemens introducing Teamcenter X and industry solutions now?
Michael: Siemens PLM tools tend to be very heavy on data. Initially, this made a poor choice for cloud solutions. And as speed and reliability of the Internet’s improved, and with the introduction of technology such as 5G, we’ve moved to make sure we can package our solutions to take advantage of the benefits of cloud working.
And there are a couple things I’d like to point out here. Firstly, our Teamcenter X product is coming up to on its third year. You know, we’re not new to providing SaaS solutions and we have a lot of customers running on Teamcenter X. The X products that we deliver are also not new. Teamcenter X is Teamcenter, but on the cloud. Anything you can do with Teamcenter, you can do with Teamcenter X. And secondly, for years before the launch of Teamcenter X, Siemens, were off to deploying teamcenter in the cloud, often through third party hosts. And this means that any issues relating to the cloud deployment were ironed out years ago. And this has been a steady evolution for us.
Chris: So, you know, Michael, we seem to hear about new cloud services every day. What trends do you see that are driving this conversation with customers?
Michael: I think the key enabler driving broader adoption of cloud has been improvements in the infrastructure. The introduction of faster, more reliable internet has been key, but also the lowering cost of cloud services, which kind of removes the need for capital investment and system maintenance. When you adopt a SaaS solution running on the cloud, there’s no need for local IT support staff.
And you’ll benefit from a service level agreement or an SLA, that’s likely to be much better than anything you could hope to achieve with an on-premise solution. When I think about PLM, it has a reputation for being difficult and expensive to deploy, like we heard about in your story, right? We’ve often heard of multi-year projects that were really heavy and you know, it takes a long time to deliver benefit. And in our modern mindsets, it’s not really acceptable to us anymore. Certainly not what our customers are looking for, right?
So what’s driving our customers to SaaS is the robust underlying technology of the most popular PLM system in the world, combined with the gold standard cloud delivery by AWS. And for us, the next phase of SaaS is industry solutions. These are pre-configured installations that are tailored to specific business processes. And tailored solutions like these take even more of the pain away from configuration and start to deliver value immediately. And as you know, as you grow and when you’re ready, you know you can grow your system, make additional configurations, and continue to increase the return on your investment.
Traditionally, when PLM is implemented, there’s a consultancy phase prior to going live, which delays your time to value. So industry solutions, they work to deploy, you know, a working system that as you gain more experience in its use and capabilities, we can guide you to any necessary configurations that you may desire. But most importantly, you know, you start to get value in weeks instead of months.
Chris: So Michael, my final question for today. We’ve discussed what SaaS is, but please could you just dig a little bit deeper into why companies should be considering cloud and SaaS and what the benefits of that are?
Michael: Yeah, there are several powerful reasons why SaaS is appealing to our customers. The first that comes to mind is that IT departments are often overstretched. You know, small to medium businesses simply don’t have the funds for a large IT department. SaaS or PLM allows you to access experts skills in the deployment and maintenance and upgrade of these systems. So, it removes a huge burden from the company.
Imagine not having to think about backups, upgrades and all that daily administration that’s common with an enterprise system. Next I would mention the availability and performance. In our next session, like I mentioned before, you know, we’re gonna be discussing this in more detail with our partner AWS. And for now, all I wanna say is that with a system running on AWS, you’ll be getting the best service and performance available, which is really what you need when managing product data, the crown jewels of your organization.
And finally, I want to mention scalability as the biggest, as a huge benefit. AWS can quickly add more power to the server side of your system in minutes. So there’s no need to get started, you know, start getting hardware quotes and figuring out how you’ll integrate performance upgrades.
Chris: I must say it was a great conversation today, Michael, and a great start to the series. So thanks again for joining me in this discussion on how SaaS solutions are introducing new opportunities for small and medium sized businesses. And thanks to our listeners for joining us. Please stay tuned for the next podcast in the series where we will be joined by our partners at Amazon Web Services to discuss the challenges that small and medium businesses face when adopting cloud technology for the management of sensitive data. Thanks for your time. Bye.
The unsustainable legacy of traditional PLM
Industrial machinery manufacturers have long faced a the familiar challenge: the high cost and complexity of managing product data.
As Pennington recounts from his 20-plus years at Siemens, “20 years ago, working in engineering IT, a good CAD machine could easily cost as much as a small car, and this situation was unsustainable.”
Beyond hardware costs, companies had to fund entire IT departments to manage infrastructure, handle backups, perform upgrades and maintain systems. This created a significant burden, especially for small and medium-sized businesses that lacked the resources for large IT teams, but still needed robust PLM capabilities to compete.
The podcast reveals a critical insight: while prices eventually came down with cheaper hardware and the shift from Unix to Windows, companies were still left with “fairly high costs and significant effort to maintain the systems.”
This legacy model simply doesn’t align with the agility and efficiency required in today’s competitive landscape.
What makes cloud-based PLM different – and why now?
Software as a service (SaaS) isn’t new. As Boland points out in the podcast, “In 1999, Salesforce introduced its CRM software, the first purpose-built SaaS system. So SaaS is probably a lot older than you might think.”
What has changed is the infrastructure that makes SaaS viable for data-intensive applications like PLM.
“The introduction of faster, more reliable internet has been key,” Boland explains, “but also the lowering cost of cloud services, which kind of removes the need for capital investment and system maintenance.”
Technologies like 5G have made it possible to move heavy PLM workloads to the cloud without sacrificing performance.
For industrial machinery manufacturers, this shift delivers three transformative benefits:
1. Elimination of IT burden: When you adopt a PLM SaaS solution, there’s no need for local IT support staff dedicated to PLM maintenance. This frees up resources to focus on core business activities rather than system maintenance.
2. Superior service level agreements: Cloud providers like Amazon Web Services (AWS), Siemens’ partner for PLM, offer service-level agreements that exceed what most companies could achieve with on-premise solutions.
3. Instant scalability: Perhaps most compelling is the ability to scale resources on demand. This agility is critical as product complexity increases and data volumes grow.
The question for machine builders isn’t whether to adopt cloud-based PLM, but how quickly they can leverage it to accelerate their digital transformation.
Cloud-based PLM: Proven technology, cloud-enabled delivery
A common misconception about cloud PLM is that it represents unproven or “lite” technology.
Boland addresses this topic in the discussion, stating that on-premises PLM and cloud-based PLM from Siemens have the exact same capabilities. The only difference is how the software is delivered.
This distinction matters because it means manufacturers aren’t sacrificing capabilities for convenience.
They’re getting the world’s most widely used PLM software with all its functionality, but with a delivery model that reduces cost, complexity and time-to-value.
Industry cloud-based PLM solutions: Accelerating time to value
Traditional PLM implementations have earned a reputation for being difficult and expensive, often involving multi-year projects that delay return on investment.
To address this concern, Siemens developed industry-specific solutions tailored to a business’s needs. “These are pre-configured installations that are tailored to specific business processes,” Boland explains. “Tailored solutions like these take even more of the pain away from configuration and start to deliver value immediately.”
The traditional approach requires a lengthy consultancy phase before going live, which delays any return on the investment. Industry solutions like PLM for machine builders flip this model: “You start to get value in weeks instead of months,” Boland notes.
This approach can be especially valuable for small and medium-sized manufacturers who need to demonstrate ROI quickly and can’t afford extended implementation timelines.
The strategic imperative: From product data to competitive advantage
In today’s industrial machinery market, efficiently creating, communicating, and managing product-related information is key to finding and implementing initiatives that deliver responsiveness, efficiency, and new business.
Cloud-based PLM provides a flexible, managed environment that enables multidisciplinary teams to automate activities, work together and execute tasks in parallel, leading to cost reductions and results that are right the first time.
With better visibility, reuse capabilities and communication of product and process information, PLM empowers users across every phase of the product lifecycle to make informed decisions and act quickly because they can rely on the quality and availability of up-to-date information.
Businesses experience faster innovation, reduced lead times and the ability to respond to market changes with agility.
For machinery manufacturers facing pressure from low-cost competitors and demanding customers with access to extensive market information, these capabilities translate directly to a competitive advantage.
Ready to learn more about Teamcenter X?
The shift to cloud-based PLM is more than a technology upgrade. it’s a fundamental change in how machine builders and equipment manufacturers can compete, innovate and grow.
Find out how Teamcenter X, the cloud-based PLM solution from Siemens, can transform your product development processes while reducing IT complexity and cost.
