Why are PLM licensing prices so confusing?
Well, do you know what to buy?
I recently met with a company looking to do “PLM”. One of the people told me that they asked a similar PLM vendor for a quote on licenses for a set of users to participate in engineering change processes, BOM management, and MCAD integration. They were also interested in adding a second set of users with read-only access to the total quote.
“Great,” I replied. It is so nice to meet people that have an idea of what tasks they want to accomplish with their PLM investment. This customer had a great vision as well about the business goals to be supported by PLM. Some of which would not be supported by the functional task list provided. To meet their global environment, product innovation, and growth goals their PLM would need to do more. I asked them if they have thought about adding basic capabilities like Vault Replication, particularly in China? Or Variant Configuration to handle the multitude of product variants their business was moving toward? How would they handle automated conversion, check-in, and linking of native MCAD files into viewables for the read-only group? What about redlining and markup?
After a rather long period of silence, the person answered that he did not consider these topics which would require additional modules as the sales rep from the other PLM vendor did not know what else to quote. If the sales rep can’t figure out, how should the customer? There’s offering a minimum viable solution to meet exactly what the customer has asked for and then there’s the educational approach to ensure the customer is thinking about the vast interconnected nature of PLM which creates a long-term vision; and likely more licenses.
What are you looking for?
Many companies have a healthy focus on the total cost of ownership of their PLM investment, but forget to consider the full utilization of their future PLM system. For some this may be the first foray into buying such a system. For others, the scope or business is different than the times they’ve bought PLM before. And others still are left balancing the equation between needs and wants with a budget somewhere in between. Oftentimes, the initial cost of a PLM solution is comprised of several elements, including modules and capabilities, user rights, integrations, third party add-ons, and so on. What happens if you don’t know where the breakpoints are between modules or that a third-party add-on would cut your implementation time in half? Add them on later? Maybe.
To me, that is where the problem with PLM licensing costs become very clear. The definition of PLM has gone round and round and is completely different at every customer in every industry I’ve had the pleasure of working with. So, what can you do about it? Ask more questions.
- What set of licenses make up their complete PLM system?
- Which modules/functionality are included in the “vanilla” version?
- What happens in a next phase, to license costs, to your discount rate, to access to new modules and feature sets to be released in the future.
- PLM is interconnected, what productivity enhancements are readily available to achieve the set of functional tasks faster and easier
- What happens when you need to make a change; to a workflow, to a user, to a CAD integration, from one version of PLM to the next – including your configurations.
What do you need now? And what do you need in two years, five years?
Of course, the first step is figuring out which problems you want to solve with your future PLM system and why. This goes beyond a functional task list, but we’ll discuss that more in a future post. Because if you don’t know what you need, and why you need it, do you even know what to buy?
When you have identified what you really need from your PLM system, you need to ask yourself the second question: How much more do you need to make the PLM system as relevant in five years as it is today? Often the second half of this question is difficult to pinpoint and that’s ok. It begins with considering the future, will your company look the same as it does today?
Check out our PLM selection process guide here
Taking away the distractions
So you’ve done all the work, you know what you need, how do you ensure you’re buying the right set of licenses?
Wouldn’t it be nice if you could choose to implement your known needs today and ensure when you’re ready to make changes and expand your requirements, it’s available to you without increasing your per-user price?
To avoid a costly and very complex license model, we have chosen a simple and flexible subscription business model for Minerva PLM, taking the functional pay gate out of the equation. Instead, we offer a wide range of capabilities, all included. It’s a bit like an all-inclusive resort. Do all the activities, eat all the food, drink whatever you please, at a predictable cost.
Read more about our subscription model here!
Ready to go off island? There are integrated routes provided by partners to get you there at a predictable cost as well.
Want to discuss your situation and get a sound advice of a 15+ year PLM veteran? Comment, direct message, or email me at email@example.com – I’m happy to help. Remember, I am always available for coffee.