Where cloud PLM is propelling?


Oleg Shilovitsky

Oleg Shilovitsky,
CEO / co-founder, OpenBOM(TM)

Money is coming to cloud PLM vendors. Earlier this week, my attention was caught by Propel PLM announcement about raising $18M in series B funding. TechCrunch article gives it a simple description.

We hear so much about managing the customer relationship, but companies have to manage the products they sell, too. Propel, a Santa Clara startup, is taking a modern cloud approach to the problem, and today it landed an $18 million Series B investment.

The round was led by Norwest Venture Partners. Previous investors Cloud Apps Capital Partners, Salesforce Ventures and SignalFire also participated. Today’s investment brings the total raised to more than $28 million.

“We are focused on helping companies design and launch products, based on how you go through the life cycle of a product from concept to design to make, model, sell, service where everybody in a company gets involved in product processes at different points in time,” company co-founder and CEO Ray Hein told TechCrunch.

The investment lingo can be confusing. However, if you want to get into details, check Crunchbase page of Propel PLM and you can learn that so far Propel PLM raised $28M from investors from 2015. Somebody is betting a good chunk of money on cloud PLM. It is hard to find a comparable example of investments in PLM eco-system. You can think about JMI acquisition or investment (depends how you like to call it) will be a similar benchmark. There was no publication about how much JMI paid for Arena, but JMI typically investing $20-100M. Aras grabbed $40M last year, but Aras is not similar to Propel PLM.

Propel PLM investors are betting on cloud and platform.

Traditional PLM tools from companies like SAP and Oracle are on-prem or have been converted from on-prem to cloud services. Propel was born in the cloud and Sean Jacobsohn, partner at Norwest Venture Partners, who will be joining the Propel board, sees this as a key differentiator for the startup.

“With Propel’s solution, companies can get up and running faster than with on-premise alternatives and pivot products in a matter of seconds based on real-time feedback gathered from marketing, engineering, sales, customers and the entire supply chain,” Jacobsohn said in a statement.

The letter from CEO (Rey Hein) published here gives you lot of information about what Propel PLM does and how is it different from anybody else in PLM world.

The thing that caught my attention and made me thinking was the world "platform". Propel PLM position their differentiators as cloud-based platform to build other brands. I've been trying to decode marketing statements and here is how I see it (in a plain English).

Propel PLM is giving data management foundation to store information about products in a way of objects and data structures. The differentiation here is Salesforce.com platform. I wrote about it few years ago - will Salesforce boost cloud PLM? Propel PLM is doing it in the cloud, so it is accessible and easy to use. The third is collaboration, which is a key for everyone in a modern manufacturing world. There are 3 Propel PLM differentiators.

I found one thing is missing in the Propel PLM story - path to the product data. In a modern world, data is a new oil. Therefore, to insure easy access to data resources is a key to success. I didn't find anything in Propel PLM story that can help me to understand how Propel PLM is getting into this. Last week, at AU 2018 in Las Vegas, my favorite passage from Scott Borduin, Autodesk CTO was - data is a positive sum game. The more you have - more knowledge you can generate. And Autodesk strongly positioned themselves as a data platform. Propel PLM has a data foundation (Salesforce). So to get access to data sources can turn into a way to double down on platform investment.

What is my conclusion? Platform is a key word in Propel PLM differentiation story. Propel PLM is leveraging Salesforce platform as a strong foundation. But customers need to get value and it can be done only through the data that can flow into Propel PLM and as a result will bring an intelligence to Propel PLM. Just my thoughts...

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