CIMdata reports PLM market growth exceeds forecasts
Heavy investments in software and services better than expected for all sectors during 2005
ANN ARBOR, Michigan, April 6, 2006 – According to recent statistics compiled by consulting and research firm CIMdata, Inc., the worldwide Product Lifecycle Management (PLM) market experienced an excellent year in 2005 and demonstrated significant growth. CIMdata research shows that the overall PLM grew 8.7% to reach $18.1 billion in 2005. This growth rate exceeded earlier estimates, with the boost attributed to continued strengthening of the global economy and an increased recognition of the value of PLM in improve companies’ business performance. PLM investments are forecast to continue their climb over the next five years, reaching an estimated $26.3 billion by 2010 (as shown in Figure 1), for a compound annual growth rate of approximately 7.7%.
The PLM industry is a broad market encompassing investments in many different types of technologies and services. PLM is not just a set of technologies, but a strategic business approach that applies a consistent set of business solutions in support of the collaborative creation, management, dissemination, and use of product definition information across the extended enterprise from concept to end of life – integrating people, processes, business systems, and information. PLM forms the product information backbone for a company and its extended enterprise.
CIMdata segments the overall PLM market into two primary sub-sectors: PLM information authoring and analysis applications (Tools), and collaborative Product Definition management (cPDm). Historically, the Tools sector has received the largest amount of investment, although growth of that sector has slowed noticeably over recent years. According to CIMdata, $12.1 billion was spent in 2005 by companies worldwide on PLM Tools such as mechanical computer-aided design (MCAD), electronic design automation (EDA), engineering simulation and analysis, technical publishing, and others. Growth in this sector was primarily driven by investments in areas such as mid-range MCAD. Areas such as high-end MCAD experienced very low growth. The Tools portion of the PLM market is forecasted to grow at a CAGR of 4% over the next five years to reach $14.7 billion by 2010.
The fastest-growing sector of PLM, and the remaining portion of the overall PLM market is for expenditures on cPDm, which is focused on collaboration, management, and sharing of product-related information. This segment covers technologies and approaches such as PDM, collaboration and visualization, data exchange, portfolio management, digital manufacturing, enterprise application integration, workflow, functional applications such as configuration management, and solutions for specific industries or businesses.
CIMdata research indicates that the cPDm portion of the PLM market exceeded previous forecasts for growth and reached $6.1 billion in 2005, representing an increase of approximately 14.7% over 2004. The cPDm segment is expected to continue its strong growth to $6.8 billion in 2006 and reach $11.6 billion by 2010 for a CAGR of 13.9% (as shown in Figure 2).
“Manufacturers of all sizes are continuing to implement PLM in record numbers. Increased levels of investment in both new and expanded PLM solutions affirms that companies clearly recognize PLM as fundamental to improve their top and bottom line performance,” explains CIMdata President Ed Miller. “More companies are committing to PLM while current users are continuing to expand their PLM solutions. According to Miller, PLM investments are fueled by executive-level awareness of the tremendous business value of PLM as an enabler in compressing time to market, reducing cost, improving quality, and achieving product and process innovation.
“With so much at stake, PLM is truly a competitive necessity,” says Miller. “PLM supports initiatives that can make or break companies in today’s global economy: integrated product development, design collaboration, intellectual supply chain management, and global resource utilization. The approach allows businesses to transform their processes so that they can operate more efficiently and bring profitable products to market more effectively. In this respect, manufacturers that implement PLM will most likely be among the top performers in the years to come.”
