Product-life-cycle-management software sales are expected to exceed $9 billion in 2008, with rapid adoption among Asian manufacturers.
Global manufacturers are increasing their investment in product-life-cycle-management technology as they refocus on top-line growth, analysts say. PLM is becoming one of the top enterprise software markets and is expected to grow at a compounded annual rate of 11.5% over the next five years, with the most rapid growth taking place in Asia.
The PLM market was $5.31 billion in 2003 and is forecast to be more than $9.17 billion in 2008, according to ARC Advisory Group. Product-data management, a subset of PLM, is expected to grow faster than any other PLM sector because manufacturers are realizing that product-data management has to be taken out of the traditional engineering setting and applied to a multitude of cross-division business processes, ARC VP John Moore says.
"Companies want to get out of their engineering departments and share product-centric information across various disciplines that have a role to play with regards to the product," Moore says. "They are trying to get a better handle on their product information so they can improve the various processes like engineering change orders, standardizing their supply base, and it's really structured around marketing products faster, more effectively, and at a lowest cost."
There's also a large replacement market for legacy product-data management systems because they don't have the collaboration capabilities that manufacturers need in today's market, Moore says.
Asia will represent more than 27% of the PLM market by 2008, ARC forecasts. "We're seeing the manufacturing base migrate to Asia, and that's where all the new manufacturing operations are taking place," Moore says. "Asian companies are looking to adopt PLM tools so that they could produce better-quality products and meet the needs of their customers."
Sales growth of lower-end PLM systems is projected to be especially rapid in Asia, led by products from vendors such as Dassault Systèmes, UGS, Parametric Technology, and Autodesk, according to ARC. "High-end solutions are costly, they're very complex, and can be time-consuming to implement. They may be more than these Asian companies need right now," Moore says. "They're looking for low-cost, fast implementation because they have some very immediate needs that they have to address."
Research firm Daratech projects that Dassault Systèmes will lead the PLM market this year with end-user sales of $2.06 billion, followed by UGS with $1.15 billion, Parametric with $911 million, and Autodesk with $515 million.
There's an increasing split in the PLM market between ERP-centric suppliers of PLM systems and design-centric suppliers, Moore says. "They are going to be the two major providers of solutions to the market."
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