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Alastair Hayfield Administrator
Senior Research Director – UK
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Alastair has over 10 years’ experience leading research activities in scaled, high-growth industrial and technology markets. At Interact Analysis he is responsible for electric trucks and buses, autonomous trucks and off-highway electrification. 

Given the scale to which COVID-19 has impacted both businesses and individuals, it is unsurprising to see a multitude of corporations finding ways to help. Be it auto companies re-tooling to make ventilators, high performance computing vendors offering virus modelling, or software vendors offering-up free licenses for collaboration tools, there are no end of ways that people are coming together to find a solution and help those in need.

These acts of generosity should be applauded. And whilst no one is questioning the sincerity of these decisions, it is an interesting thought experiment to think what impact they might have at the end of the COVID-19 emergency.

Productivity at Home

One of the major challenges associated with the COVID-19 pandemic is the need for social distancing, requiring people to stay at home and not travel. This has driven many businesses to temporarily suspend operations, furlough staff or, where possible, ask employees to work from home.

PLM vendors have, without fail, acted quickly to ensure that their solutions are available to support those who can work from home. Examples include:

  • Siemens is offering free access to online training courses, free cloud and processing assets, and help for its users working remotely.
  • Dassault Systemes has created an ‘Open COVID-19 Community’ to enable scientists, engineers, makers and fabbers to come together online to find solutions to COVID-19 related engineering problems.
  • PTC is offering free access to Vuforia Chalk, it’s augmented reality collaboration tool.
  • Hexagon MI is offering offline versions of its tools for free and the ability to access software licenses remotely through a VPN.
  • Autodesk is offering extended, free access to some of its cloud collaboration tools.

Trials can, of course, be a double-edged sword. For some, they may tip the balance and convince them they need to invest in the product. For others, they can confirm what they already suspected: it’s not something they need.

This situation is likely a little different. Given the length of time that some must isolate it may convince both employers and employees alike that they can be more flexible with their time, work remotely more often, and be just as productive (if not more so). This will likely prompt manufacturers to keep remote working solutions in place long after COVID-19 has passed.

It is very likely this will drive a long term ‘uptick’ in revenues associated with PLM collaboration tools. This is particularly good news to companies like PTC and Dassault that emphasised a shift in recent years to subscription-based models and the availability of shared, cloud-based content and platforms.

Breaking Silos

The other positive that may come out of COVID-19 is better communication and sharing of assets both internally within companies and externally between companies.

A great example of this is automotive manufacturers like Ford and GM partnering with GE and Ventec to build ventilators. Not only does this require sharing of product plans and manufacturing capabilities, but also alignment on supply chains and purchasing.

Just a few years ago – and before the advent of sophisticated cloud services – this type of collaboration would have been difficult, and certainly much slower. The ability to share complex, processor intensive designs and processes in real time and with multiple, globally dispersed users operating on different IT infrastructures is a game-changer.

Will this behaviour continue in the post-COVID world?

For sure, companies from very different industries – automotive and medical – are coming together and finding common ground. They are also finding ways to share competencies (such as automotive’s supply chain expertise and purchasing scale). At a very basic level, this type of emergency sharing of skills should highlight to companies ways they can improve and establish ‘knowledge networks’ between employees that can share insights. Beyond this, companies might develop new product ideas and look to adopt new production techniques – such as rapid prototyping (3D printing) – in the future as a result of the collaborative approach being deployed at the moment. Alibaba and JD.com – two of China’s biggest eCommerce platforms – saw phenomenal growth during the 2003 SARS outbreak. And it’s worth remembering too that Airbnb launched in 2007 right before the Great Recession – unemployed property owners looking to supplement their incomes fuelled growth in the platform.

Making Reality, Virtually

One of the big advantages for PLM vendors is they can offer their users tools that allow collaboration, simulation and virtualisation. All of these will be critical during the COVID-19 crisis but also transformation longer term.

In the automotive market Interact Analysis has written before about the use of simulation as a game-changer for the industry. It is our conjecture that the current crisis will fuel further the adoption of simulation and virtualisation tools (and cloud services as a result) as they allow the automotive industry to move faster and better survive ‘black swan’ events like COVID-19.

In our recently published report on the Automotive Design, Test and Simulation Solutions Market, Interact Analysis estimates that the market for advanced automotive simulation tools is currently worth $100m annually and will accelerate to be worth $450m annually by 2023.

Posted by Alastair Hayfield

Alastair has over 10 years’ experience leading research activities in scaled, high-growth industrial and technology markets. At Interact Analysis he is responsible for electric trucks and buses, autonomous trucks and off-highway electrification. Read More