What's Next in PLM? with Stéphane Declée of ENOVIA - Part 2

Stéphane: Obviously, this is also a very fascinating question because it's not only about technologies, it’s what the technology opens as new possibilities. And I think this is what is always amazing with being in the IT or software and technology space. There is first a kind of correction I would like to make if I may, Arvind. Because I think it is very important for people to understand that there is a big difference between cloud and SaaS, and sometimes we are making the shortcut, I will say, to speak about cloud as being the revolution. 

The truth is that cloud-hosted services or third party-operated PLM services, but still with the same constraints of complexity and management maintenance, have been existing actually for a long time. And the outsourcing of IT operations has been the strategy of many companies in the last years.

I think the real revolution is not cloud, it’s SaaS. And this is really what is opening new possibilities. So really software as a service – not only a third party is operating your environment but actually it is also operating and mutualizing somehow the maintenance upgrade on those systems. So, we can come back to this a little bit more.

The second point I want to make is, if we come back to maybe two or three years ago, this was more emerging, this was more – as you said – challenging some IT considerations or IT habits, and that's a fact. But today it’s really, for us – at least as we see it – really becoming what people call a well-established and steady trend that more and more clients actually see as the way of the future. So either they can go there right now, either they are building a really practical plan to get there with concrete actions.

But we really see that as more than a trend, and really as a drive. Actually, when you look today at our client base, we have over 20,000 clients enjoying 3DEXPERIENCE for different types of usage. And actually of course for companies of many many different sizes – it can be from a two or three-people company to multi-ten-thousand-user companies – but actually 60% of those clients are SaaS clients today. 

The recent trend we see is that while these 60% were highly concentrated in the small-sized clients – startups and small teams in the early days, at least in the early days of Dassault Systèmes’ SaaS history – we see more and more large organizations, even large, established, I will say, what some people call legacy clients or long-time companies, are really not only thinking but also adopting cloud. And then the question is: why? Back to your point, Arvind. So I think there are several elements to that, and we can go quickly  on the key elements.

The first one is really the fact that, actually, it's really a way to be up and running in a matter of – depending, it can be hours, can be days, a few weeks. Then when you compare to, I will say, historic PLM project implementation, that could take six months, eight months, sometimes a year to happen, it’s a dramatic change. The time between the evaluation, decision and, I will say, return of investment, or experience value is really shrinking to the max.

Second point is the flexibility. Again, if you are owning or running your own installations before you can evaluate something, validate something and get the skills and everything – again, it takes months. With cloud, you can really actually investigate, potentially quickly get external support: it's a question of hours, days, to get on a new topic. And you can try – you can go down, can go up to the flexibility and usage and adoption. Scalability and flexibility, I think, is really critical.

Of course there is a direct implication on the type of cost, on the skills you have to maintain to run those complex IT systems, which is of course a direct thing. And, again when you now see business acquisitions, getting people in different locations, different countries, everything… the process yourself to upgrade, update your IT infrastructure to be able to be available from the USA, to Europe, to Asia… It's complex.

Cloud: you declare a location, the system automatically provides and provisions the right resources in the right place. You can be up and running from the US to China or to Japan in a question of days or weeks. So when we come back to the speed aspect of the business, I think this has a direct implication to speed; and democratization because, as you mentioned, it gives access to companies of smaller size to capabilities that were before reserved to large organizations: having not only the right IT support and infrastructure and everything, which is a revolution.

And the last point is security. You know, there has been a belief, or there has been a fear with SaaS, that it could create concerns for security. “I will have my data somewhere that I don’t master anymore.”

The reality is that, actually, we have seen many clients coming to SaaS for one reason: because they get ransoms. They get attacked by external, of course, bad people. But they put their business in danger. Sometimes they have lost data, and we have seen people understanding that, actually, of course, when you have a company like Dassault Systèmes investing in those SaaS infrastructures, actually developing a special brand called 3DS OUTSCALE which is really mastering all the complexity and all the different aspects of securing data and access to this IP at all the different levels…

Actually, I would argue that the SaaS environment is actually more secure than maybe 80-90% of on-premise infrastructure. And especially when you have to open it to external people, this is where the nightmare really is coming. So I think these are really the points. And also today – and I think this is still the case for some of our competitors, but today – the portfolio of solutions available on cloud is covering everything. We even today have solutions that are only available on cloud because they are taking advantage of the unique aspect of technologies that we can deliver and maintain on a continuous basis on the cloud. So if you want to be fast, if you want to be up and running in days, if you want to always be up-to-date so you can take advantage of the latest at any time, if you want to be able to explore new frontiers, start things, stop, restart, grow, I think that SaaS is really the way to go. 

Arvind: Yes. And I want to add, if you want your data to be secure too, SaaS is the way to go.

Stéphane: And secure!

Arvind: Yes. Thank you. Actually, I was going to touch up on security later, but you did a fantastic job of covering that part. I just wanted to tell that Lifecycle Insights did another study quite recently and we found that there is a lot of fear in the minds of executives when it comes to putting their data on the cloud. But I think you have dispelled those fears really well, especially given the ransomware attacks for very established companies on their own servers. There is no doubt that SaaS is going to actually secure your data much better than what you could, right?

Stéphane: Exactly. And we have different levels of service in our SaaS offering that can, I think, address even highly regulated clients. So you can be in the global environment, you can also be in a more restricted environment, you can even secure your IT infrastructure if it is part of the mandate that you have to comply with for whatever reason.

So again, there is more and more flexibility also in the deployment approach that we can propose to clients to fit with their specific, I would say, security or compliance regulation constraints.

Arvind: You know, I learned something today. Cloud is the enabler and SaaS is the game changer. Thank you. Yes, I completely agree with you. 

Stéphane: Yes, it’s a good summary.

Arvind: Yes. And I think there's been a lot of confusion, not just from people like me, but a lot of executives about what's the difference. And I think you gave an excellent refresher for people to know the difference between cloud and SaaS.

Yes, cloud enables SaaS, but if without SaaS, that's the revolutionary product that people are exploiting. And I also really like the fact that it levels the playing field. As a small startup, I can actually aspire to compete and even win successfully against incumbents. And that's a great service, to be very honest with you, to mankind, if you really think about enabling and fostering innovation.

And actually SaaS is a great enabler of innovation that way. You know, Stéphane, this is a topic that I think everybody is talking about. So let's also talk about that. 

We live in a world that is rapidly changing. We are not talking about viruses anymore. We're talking about climate and environment, right? You live in Paris and you can tell me if I'm wrong, but I saw in the papers that you had 40 degree days last year, which is probably unheard of for people in your city, right?

I mean, long story short, I think everybody is worried about sustainability and the environment, and they should be. And that's the right thing. But, you know, the culprit – manufacturing, unfortunately, is one of the culprits towards greenhouse gas emissions, right? I was listening to a very renowned speaker from the World Economic Forum from Davos last year, and I learned that more than a quarter, almost a quarter of carbon emissions in the US is due to manufacturing. 

In Europe I don't think it's any different. They say that the industry emits close to a billion tons of carbon dioxide equivalent, making it the largest emitter of greenhouse gases. But it's not the villain, manufacturing has changed lives, and for the better, for billions of people and it’s made excellent products possible, right? So there's always this tussle between climate and manufacturing.

And Dassault Systèmes is actually sitting in the middle of this, right? I mean, solution providers like you: I know you are looking to help manufacturers become more sustainable.

 

Stéphane: Yes, it’s a very critical question, these days. I think that, first, there are a few beliefs that we have that I think it’s important to share. 

Number one is: you are mentioning that manufacturing is creating…somehow is part of the problem. But also, we strongly believe that the industry at large, actually, are also part of the solution.

I mean, they are the ones that will ultimately create, and drive, and ensure that the next generation of innovation are going not only to reduce emissions, but actually to solve the problem. So for us they are really the solution. That's why for us it’s very important, obviously, and strategic to provide them with ways that will enable them to, actually, to accomplish this mission as a solution, solver for this humanity challenge.

Second point is that we believe that actually this specific topic, which is not a new role of regulation and the problem of constraints, and we see actually more and more regulations coming and decisions driven by countries or organizations like the European Union and others to put some rules. But the consumers also, as I was mentioning at the beginning, are also playing a role here.

And we see more and more trends of consumers like you, like me, and many many others that are taking this as a criteria for selecting products, solutions, services, experiences for their delivery. So there is this double pressure which is coming on many of those companies and for some of them, and more and more clients.

Second point is that, again, we mentioned that for other topics before, studies also have been demonstrating that, again, a lot of the decisions which are impacting the end sustainability of your delivery – which is not only about the impact on the environment to manufacture, deliver, but also sustain it, recycle it or eventually repurpose it to something else – a lot of the decisions are, today, or could be taken, decided, defined, during the early phase of the product development. 

So again, we are putting a new topic to be addressed by people using virtual solutions to imagine, design – and collaboratively – those products. So we are committed, of course, to develop solutions. There are many aspects of what we do and what we are going to do, which have a direct impact on this topic.

And we have to move from just measuring the problem at the end and trying to understand after everything is done, what we could do, to really think about it as a strategy on how we can drive actually what we do, to achieve the target that we want to get to.

So there are several aspects to it, as I said. 

Number one, of course, is to be able to make the assessment as early as possible of what will be the environmental aspect, whatever it is: energy consumption, of course, CO2 emissions. We see that actually as a growing concern: water consumption, that is going to be highly strategic in many countries where, actually, water is going to become more and more difficult to access and rare, scarce, for manufacturing-related activities. 

So, the first thing was really to integrate the lifecycle assessment solution in the engineering environment so people – engineers – can really measure, understand the impact of the decisions, taking into account all the downstream activities of their design. And for this we have embedded, actually, one of the well known LCA content and rules knowledge database which is called ecoinvent, actually, which is enabling us to, again, to be able to predict and compute and give a view of the consumption, globally the impact of the design to those environmental variables.

And also to be able to balance it with cost because at the end, businesses to survive, they have to be profitable. So, again, making this balance and being able to combine both, I would say, business and sustainability assessment, I think is a strategic topic for many clients.

The second one of course is the power of the virtual twin to really design for circularity, to do actually what I think our CEO is calling “design for waste”, which is really about reducing any kind of waste at the minimum for everything – whatever it is, for manufacturing goods, for sustaining, maintaining, upgrading goods, product systems; and of course maximizing their reuse and all of this of course, measuring and minimizing emissions, consumptions and overall risks for the business.

So this is really what we are focusing on, on the power – we have been telling the story of the power of virtual twins to do things that could be eventually dangerous, that could be expensive. To do it virtually at zero cost and zero risk – and I think this really well applies to sustainability. You can play those scenarios, understand the impacts and really engineer sustainable products that will contribute to the sustainable planet that we are really dreaming for.

Arvind: Absolutely. Thank you Stéphane, because you nicely articulated the importance of the circular economy and how the Virtual Twin Experience and other products from Dassault Systèmes are going to play a big role for companies who are interested in actually doing this. So, you know, we are in such an engrossed and enthralling conversation that I forgot to keep track of the time.

But I have one final question that, certainly your users, like JLR you mentioned, are very excited about, you know. Let me ask you about your group's plan. I'm talking about Dassault Systèmes’ ENOVIA, right, you are the leader.

Stéphane: I can make a few comments, obviously, without of course giving secret things… but of course there are several elements. And in the way we are organizing our portfolio, there are several areas that we are using, ways, to group and to articulate solutions and values that we are delivering. There is an important one, which is overseeing, which is what we call “Simply Planning”, which is part of, actually, the ENOVIA motto, because the ENOVIA brand promise is helping clients to plan their definition of success, to really give the direction and the mean to control and to understand how those decisions or those plans are being executed. 

So the first thing is actually related to flexibility, agility and so on. We see more and more clients, actually, who are applying a new way of product development, applying agile kinds of practices.

So this is one of the key topics for us. And actually there will be deliveries in the coming, almost days, weeks. We are actually going to enable new methods and new ways of planning. Not only, I think, that have been used mostly in the software industry for some years, that we see clients planning or even starting to implement even for cross organizations, cross discipline activities; so mechanical, electronic, software and everything.

So one thing is really there: so, to be able to manage your backlogs, be able to manage your sprints, and to manage it in the context of a global product planning with your milestones and launch dates and everything; so this is one area. 

We are also working to help clients manage their portfolio, also in an integrated way.

People today are using Excel, are using, I would say, standalone solutions. Providing a way to have portfolios connecting with, actually, analytics, machine learning, to be able to have an intelligent planning and evaluation; and at the same time connecting that to configuration on the actual product definition I think has a huge value for clients.

On the quality side, we are really going from what we call document-based quality, which is kind of state of the art today, to data-driven quality. This area is a core topic for us and is, I think, very innovative; an AI-powered and data-driven solution, actually coming out this year which I think will have, given the point I was mentioning about the ever-growing focus and interest and quality and transforming quality processes by clients, I think will also be a key topic.

On the pure engineering side there are really few aspects. One is sustainability; I was mentioning that before and we have already delivered some solutions and are obviously continuously working on expanding that. And as I was mentioning, we want to provide ways to actually combine criterias with sustainability, cost, material compliance, all this in one way so we can really help clients and users make the decision in the context of what they are doing. 

We’re also investing in the growing semiconductor space. We see a lot of, again, a big revolution in this area, both in terms, of course, technology, but also in terms of players and reinsourcing. And there will be, of course, a huge demand for any kind of semiconductor. So this is a point that we are also investing with a new SaaS-based solution that we will be, I think, the only one to be able to deliver and to provide.

And then the other big topic is related to supply chain value networks at large for all the different aspects – whatever it is – facilitating the collaboration for, I would say, co-innovation, co-engineering that we see also happening more and more as companies join forces and skills, knowledge and know-how to deliver new types of solutions and products, that they would not be able to do by themselves. But it's also about optimizing between “I do” versus “I buy” and, as we mentioned before: connecting, sourcing, procurement, even supply chain and engineering in a collaborative and inclusive space. 

And finally, for what we call, really, enterprise collaboration and business innovation: as we said, we have the ambition to serve users outside of the engineering or manufacturing space, outside of the product development space itself. And actually, we are developing a new category of solutions that are based on a low-code/no-code kind of technology to really provide a configured, I would say, a business cockpit, what you call business experiences that will be able to serve organizations and connect teams between even marketing, finance, HR – human resources – and capital management, which we see as really very important and connected to what we do. 

So again, just to give a few elements. And all this, leveraging data, data science, we are putting data science now in all places or solutions with, of course, AI, machine learning and all this kind of technology, again, with the only objective to empower and simplify the life of our important users.

Arvind: That is no small list, Stéphane. If you can only disclose this, how much is a part of the list that you didn't disclose or you could not? Well, I think I'm very excited for your users. These capabilities are indeed going to give them an edge to prosper in their industry, and give us better products and a better, sustainable planet, right?

Stéphane, thank you for the informative discussion and very encouraging discussion we had today. I know time is quite premium for you and I really appreciate you taking a few hours of your morning today talking to us. I really appreciate this discussion and thank you very much.

Stéphane: Thank you all. And again, enjoy your day. I'm looking forward to connecting with you in different ways. And look at this survey because there’s some very insightful information and much more we have to do, and we are committed to that, obviously.

Clara: Thank you for listening to Designing Impactful Innovation. To find out more, go to 3ds.com/cloud. Don’t forget to subscribe for more insights and stories from our guest experts!