The Road to SaaS: The Current Trends Driving Adoption in Product Development

Written By: Jon Hirschtick
  • 3/3/2020
  • Read Time : 3 min
road-to-saas

In the United States, many K-12 classrooms now rely on Google Chromebooks to give students instant access to their applications and projects online – and to facilitate collaboration with classmates and teachers in real time. These students, who are the next generation of engineers, product designers, and manufacturers are already accustomed to the benefits of cloud-native Software-as-a-Service (SaaS) applications. In the early 2020s, the professional product development world will quickly play catch up.

I predict that 2020 will mark the tipping point for companies adopting a wide range of SaaS product development tools, including CAD, Product Lifecycle Management (PLM), real-time simulation and generative design.

The demand for more product development applications running on cloud-native architectures will be further driven by the continued growth of 5G mobile networks. Making internet browsing and download speeds 10x to 20x faster will create an even greater expectation for instant access to information in every aspect of our personal and professional lives. In this context, the delays and work interruptions resulting from the IT requirements of installed software will become more of a competitive liability.

With continued pressure for companies to deliver innovative products and improvements on accelerated timelines, the SaaS approach to product development will offer a clear business advantage over installed desktop tools. The SaaS model has already asserted its dominance in most other business applications – such as accounting, sales, human resources and marketing – and it will soon emerge as the default choice for hardware engineers as well.

In 2020, we will see the emergence of cloud-native SaaS generative design tools that will significantly speed up the optimization of product designs across multiple parameters. These cloud-driven design tools will allow product development teams to simultaneously explore more iterations to optimize weight, strength, shape, materials and cost.

In the early days of Onshape, skeptics were saying, “How can you possibly run CAD and data management in the cloud – how could it possibly be fast enough online?” Now, it’s more common to ask how it would be possible to run product development software on a single computer. How could you possibly run generative design, for example, on just your laptop? It would be like trying to charge your electric car with one of those pocket battery packs you use for your phone.

Product design aside, SaaS platforms will also be embraced in 2020 for their cybersecurity advantages. In response to the growing threat of ransomware and viruses, more executives will trust their intellectual property (IP) security to cloud-based solutions over on-premises security software. Similar to their early CAD performance doubts, skeptics have long been asking if the cloud will ever be secure enough to protect their data. This year, that question will be flipped: “How in the world can you ever have your IP securely stored on your desktop?”

Furthermore, continued geopolitical turbulence across the world will require executives to rethink their supply chains and quickly act on their Plan B (and their Plans C, D, E and F). When changing regulations and tariffs force companies to move manufacturing operations from one country to another, they will seek out SaaS product development tools that enable the instant redeployment of their software tools and data – and that can pull back their valuable IP from their old suppliers.

These sudden shifts will also increase the demand for SaaS collaboration tools that speed up communications between teams – ironically the same kind of real-time collaboration now enjoyed by those K-12 students using Google Docs.

On a lighthearted note, the inevitable industry shift to SaaS tools will also put an end to workstation envy in the office. The compulsion to buy the latest and most powerful hardware will no longer be justifiable. No one’s workstation can be as big and powerful as Amazon’s cloud. No one’s workstation is even close.

Every company has distinct needs and priorities and will determine their own timetables for when SaaS is the better choice for them versus on-premise tools. Companies may have strategic uses for new SaaS product development tools, while still valuing the strengths of their on-premises platforms.

PTC built its legacy on installed on-prem software, and its recent acquisition of Onshape is a big exclamation point that SaaS is their (and our collective) future. The best analogy I’ve heard is from PTC CEO Jim Heppelmann, who compares our situation to how the automotive industry now views the internal combustion engine (ICE) vs. electric vehicle (EV) technology. There are still plenty of high-performance ICE-powered cars to choose from – and they are not going to disappear tomorrow. However, every major automobile company in the world is now investing heavily in electric vehicles, too. They, like you, always have to be ready for the next generation while continuing to support the current generation.

(An earlier version of this blog was originally published by MCADCafe.)

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About the Author

Jon Hirschtick

Jon Hirschtick is EVP and President of the Software-as-a-Service (SaaS) business unit at PTC. Jon leads the team researching, developing, and managing the recently acquired SaaS product development platform, Onshape. Outside of PTC, he advises emerging technology companies including Magic Leap and MarkForged.

Considered one of the computer-aided design (CAD) industry’s top thought leaders, Jon joined PTC with approximately 35 years of experience in CAD, having served as Founder and CEO of SOLIDWORKS, a Dassault Systems company; Director of Engineering at Computervision; and Manager of MIT’s CADLab.

Jon received both his B.Sc. and M.A. degrees in Mechanical Engineering from MIT. During his time at the Institute, Jon was a member of the MIT Blackjack team.

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