Agile's CEO Talks About 2005 Product-Life-Cycle Management Trends
An increasingly global economy, compliance issues, and a need to get more successful products out the door faster are driving the product-life-cycle management market. Hear more from Agile Software CEO Bryan Stolle.
The product-life-cycle management software market continues to gain ground, as more and more companies try to get a better handle on their product information. Agile Software Corp. CEO Bryan Stolle talked with InformationWeek this week about the challenges that companies are facing in today's global economy and about the biggest issues and trends in PLM for 2005.
InformationWeek: What current business challenges are companies facing in product-life-cycle management?
Stolle: The global economy has created a highly competitive environment for companies with significant pressure on time-to-market and margins. We've also seen shortened life cycles for innovative new products at lower prices, and we've seen environmental regulations require immediate action. Therefore, companies are left managing a complex outsourced design, manufacturing, and service operation, as well as managing launch and ramp time, costs, quality, and compliance through constant and protracted product change cycles.
InformationWeek: What are companies doing in response to these challenges?
Stolle: Because of a globalized economy, companies also have more SKUs to manage. They can't afford to produce marginal products anymore and they are looking for better ways of managing their product portfolios. According to Gartner, from 2004 to 2010, Global 1000 manufacturers will increase their investment in portfolio management by at least a factor of five.
CEOs are now responding to strategic problems. How products are made and managed has become a CEO imperative, which we haven't seen in over a decade.
InformationWeek: What new industries are tapping into product-life-cycle management?
Stolle: We've seen more and more life sciences and pharmaceutical, food and beverage, and consumer-goods companies focusing on PLM. Our recent major customer commitments, for example, include Apple Computer, Tyco Healthcare, Micron, Johnson and Johnson, Dell Computer, Phillip Morris, GlaxoSmithKline, Harris Corp., Bayer, Albertson's, Flextronics, and Veritas. Just from this list of companies, you can see how many industries are getting into PLM.
InformationWeek: How do the Oracle-PeopleSoft acquisition and other similar acquisitions impact Agile?
Stolle: These acquisitions have not impacted us negatively. We've continued to grow and expand our customer base through our own acquisitions. Since 2003, we have acquired six companies. The general enterprise market hasn't been growing much, but we have experienced a 35% annual growth.
InformationWeek: What has Agile come to believe are the biggest issues in product-life-cycle management for 2005?
Stolle: The major one would have to be environmental compliance, driven by regulations like the [Waste Electrical and Electronic Equipment] and the [Restriction of the Use of Certain Hazardous Substances in Electrical and Electronic Equipment]. Manufacturers must comply or lose revenue.
We've also seen quality come up as a priority for companies in the past nine months. Bad products simply result in losing customers, and as companies outsource there is potential to lose control of quality.
Everyone agrees that streamlining the product innovation process is important but don't agree on how to get there. Margin pressures now require that five or six product ideas out of ten have to work, whereas in the past two out of ten was enough.
Product portfolio management and small and medium companies as a new market opportunity for PLM are also big issues for 2005.
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