Arena Solutions: Leading the Charge to Popularize PLM

Arena Solutions was once known as bom.com. If that reminds you of dot com bomb, that may be why it was changed. Probably more likely is that hardly anyone outside of engineering and architecture knows that BOM stands for bill of materials. Besides, Arena Solutions' charter has grown to encompass far more that bill of materials. Arena is about PLM. But wait-- before you you dismiss them as just another vaguely-defined, solution-to-everything company trying to sell you expensive software you've been able to do just fine without, you ought to read on, because Arena has an idea -- and the financial backing -- to be the next big thing in our industry.

I met with Michael Topolovac, Arena's CEO, in the upstairs office of their PR firm in San Francisco, near Union Square. I had met Michael  a few other times at trade shows, but it wasn't until this meeting I finally got it. I doubt that I had become smarter. Maybe it was the barrage of PLM-will-save-the-world literature I have been subjected to for the last few years.

What distinguishes Arena from other vendors selling PLM software? According to Michael, Arena has the advantage that it is cheaper and easier to use than enterprise solutions offered by Dassault, UGS and the like. While they sell big, heavy solutions that require servers, IT staff and lots of training, Arena's PLM application is on demand -- it runs off a web browser on Arena's servers. A light application, no IT staff required and Michael insists training is minimal. Also, PLM from Arena is a service, not a product. When you buy a product, a vendor naturally loses interest. However, with a service, the vendor has a continued interest in making sure the customer is satisfied -- or they don't renew.

Some questions raised:

Q: Easy to use implies lack of power? Is this true of Arena?
A: Arena thinks feel supplying most of the power at a fraction of the cost is a good model.

Q: How safe is customer data with Arena?
A: With a lot of customers, storing data is like keeping money under the mattress. There is usually inadequate security. We're more like the data bank with security and safeguards in place.

Q: What does it cost?
A: Work group edition is $500/year, Professional is $1200/yr and the Enterprise edition is $1600/yr.

Comments

[Bobby]

Another SaaS company to check out for PLM is Datastay. http://www.datastay.com

They are much more robust than and tailorable than Arena, hence the choice by our firm to go with them

[Adam]

Previous Post:
"SaaS seems like a great idea for transaction-based apps that primarily use someone else's data (think credit card processing, sales tax calculations, travel reservations, payroll).
But PLM's primary role is to manage your company's proprietary product data, and a few hours without your product database sends everyone home."

Agreed. Thats why Arena posts real time system performance metrics for the public, not just customers, to see.

http://www.arenasolutions.com/uptime

I'd be you'd be hard pressed to find an IT admin from any fortune 500 company that can match Arena's uptime guarntee.

Are those per-user or per-site costs?

[Tom]

SaaS seems like a great idea for transaction-based apps that primarily use someone else's data (think credit card processing, sales tax calculations, travel reservations, payroll).
But PLM's primary role is to manage your company's proprietary product data, and a few hours without your product database sends everyone home.
The nature of mission-critical SaaS (PLM, CRM, SCM, or whatever) has audit/SOX/control implications, and requires explaining to your Board the risks of
* inaccessible or lost data
* info stolen or mistakenly shared with other SaaS clients (how would you even know?)
* system upgrades (and related client updates and user training) imposed without your input
* maintenance downtime oblivious of your project schedules
(Imagine *not* telling your Board!)
I'm not saying these problems are inevitable, but they all require thorough identification, vendor negotiations, and on-going process validation.
By their nature, SaaS clients are usually browser-based and therefore may have weak UIs, limited performance, and limited configuration options. This is not an problem for casual use, but a mission-critical app is typically used all day by at least some users, who may not enjoy the experience.
Furthermore, there is a definite barrier to exiting a SaaS vendor: Consider the cooperation you'll get if you decide to move your data elsewhere. You'll eventually get your data in Oracle, MS SQL, Ingress, MySQL, Access, Excel or a flat file on a dozen CDs, but maybe the SaaS vendor considers his DB schema to be proprietary and won't provide (or simply doesn't have) adequate documentation. How much support can a departing client reasonably expect, on what scehdule, and at what price?
If the *data* is critical to your success, it belongs under your direct control.

SaaS based applications due to their inherit nature, remove many of the traditional barriers to entry/exit that many companies face today in purchasing enterprise software such as: lengthy deployment times and large upfront licence costs. With SaaS platforms, companies can also "try before they buy" and further reduce the risk of implementing a new system or switching from one to another.

[Albert]

I'm sure there are advantages (and disadvantages). I simply disagree that service vendors are intrinsicly more customer-oriented. *If* (and this is a big if) the SaaS model creates a more functioning market (where buyers can easily move from one vendor to another) *then* SaaS will result in more customer-oriented vendors. But highly competative "product" markets produce the same result.

[Jeff Ordonez]

I'll politely disagree. For me, it helps to think of the customer-vendor relationship in SaaS as one that begins new every 365th day (for bargaining as well!). Where most of the product companies we grew up using make the majority of their money on ongoing maintenance costs and services, SaaS businesses tend to derive the lion's share of their profits from recurring license fees, which can be all inclusive of upgrades and customer service. The biggest Plus with SaaS, though, isn't a departure from how customers have traditionally paid vendors a lot over time to fatten up their pockets for a product that was oversold the first time - it's the expensive iron, extensive time to deploy, 3rd party DB-licenses, and most importantly, our IT time. In plan black and white, its the tremendous internal investment in physical architecture to run these oversold apps and the valuable time configuring this architecture to manage an application that can now be accessed from the web. I've had bad experiences with a particular SaaS vendor or two, but the model is superior for the needs I've faced.

[Albert]

>However, with a service, the vendor has a continued interest in making sure the customer is satisfied -- or they don't renew.

This is silly. "service" is a product. The vendor have no more or less interest in keeping the customer satisfied. This is just a different payment and product update model.
It is competition that keeps corporations honest and customers happy.