Fear seems to be a big part of the engineering-on-the-cloud discussion, at least in the blogosphere and on discussion boards. But I think there are two different fears that need to be addressed. The first fear, the fear of losing your intellectual property, can be overcome and it is what I would call an “unhealthy” fear. The second, the fear of falling behind, is trickier but I would argue that it is a “healthy” fear because worrying about it can make you stronger and ultimately help you. So read on to see if either of these fears resonates with you.
Fear of IP Loss
This is the one that most people focus on immediately during cloud computing discussions. Jon Hirschtick makes some solid points regarding cloud just being a different model related to security in this interview with Matthew West. It depends on the user situation as to whether cloud security is better, worse, or about the same when compared with the on-premise equivalent. A lot of people aren’t aware that there are options in the cloud, too. There are private clouds, public clouds, hybrid clouds, and other options (you can read more here). So just like with picking your level of internal IT security (onsite datacenters, multi-factor authentication, shielded equipment rooms, etc.), you can pick your level of cloud security, too. In my opinion, fear of IP loss is understandable, but there are well-defined answers available. They all have cost-benefit trade-offs (read that as, some are very expensive). The second fear is a much bigger deal.
Fear of Falling Behind
This is the one that I think a lot of small businesses should be watching. We all understand how outsourcing works – if you can find a cheaper resource and there is very little friction in switching to that resource, most businesses do it. We’ve seen it in manufacturing (even though there is a lot of friction involved in moving manufacturing to other countries) and we’ve seen it in software development. Cloud-based engineering will reduce the friction involved in outsourcing parts of the product development process.
Years ago, when I was in engineering, two guys in my department spent 12 months learning ANSYS because we needed to do FEA 4-5 times a year. We tried outside consultants first, but networks were slow, we couldn’t manage design iterations with them, and they didn’t use our CAD software. Cloud-based engineering will make all of that simple (reducing the friction). You’ll temporarily “publish” your cloud CAD data for use by this partner, they’ll perform their work, upload their results to your system, and you’ll keep trucking. And if you need to iterate, it will be even simpler to publish revisions to them and have them rework the analysis. Some companies will continue to follow the old-school model (and cost themselves $100k+ in buying their own software and developing their own FEA skills). Other companies will gain a competitive advantage by using the cloud to quickly involve an FEA expert, paying a fee (let’s say $20k, for example), and having the work done in days or weeks, not months.
Let’s take a more positive example. Say I am designing a new product for my core market. Today, no one in this market space uses software in these electro-mechanical products (imagine Sony back when the Sony Walkman tape player was the #1 portable music device on the planet). I have a plan for introducing a new device that adds a software feature to my product. I could take a couple of years to hire the right people and try to develop the right expertise in-house to be able to add these features to my design, or I could find an expert in this area and work tightly with them (across the cloud) to bring the new product to market faster than I ever could have if I had insisted on doing it all myself. Think of this as an extension of the law of comparative advantage (specialization). Are you going to be able to use an example like this to kick your competitors to the curb, or are they working on something right now to do the same to you?
The second “fear” is the one that I think we all need to be paying attention to. There’s competitive advantage hidden in the cloud, you just have to get over fear #1 to be able to find it. I’m not saying that PLM-as-a-Service / engineering-on-the-cloud will instantly catapult companies into being market leaders, but I am suggesting that it could be a significant enabler of real competitive advantage. So when it comes to engineering, manufacturing, and cloud computing, what are you afraid of? Seriously, I mean it. Please leave me a comment and let me know what about the cloud is worrying your company. Is it one of the two fears that I mentioned, or am I missing the real issue here?