A new buzzword was recently thrown my way at the annual PTC Live conference in Anaheim. I’ve never been a big fan of buzzwords nor the concepts that they represent, as they are often watered-down or tainted versions of truly original ideas that have been bastardized by Corporate America. But, I digress.
During the opening keynote, PTC President and CEO, Jim Heppelmann, used the term: servitization. Like any good buzzword, it sounds made cheesy and made up. Heppelmann admitted that the buzzword was not one that PTC had coined, but one they had certainly adopted. My distaste doesn’t lie in the fact that servitization is a buzzword (though, it isn’t the prettiest or easiest thing to roll off your tongue). The concept of servitization is what raised (or furrowed) my brow.
Heppelmann used the Rolls-Royce jet engine as an example of servitization. As we all know (or at least you can draw an easy assumption), jet engines are extremely expensive to purchase. Also, if not more so, they are expensive to maintain. These expensive engines slow down the manufacturing process of the planes and add a significant expense to the BOM, which is quickly passed to the commissioning customer. Rolls-Royce now leases the engines on the planes, providing maintenance and regular inspections.
The idea is that owning something as expensive as a jet engine is not only costly, but risky. An investment in an engine of such size and innovation needs to be kept up, and (just like most technology) will eventually wear out and/or find itself quickly outdated. Why own an expensive piece of equipment and take the risk of poorly maintaining it or having it outdate, when you can lease until the next best thing comes along?
PTC is striving to make itself, in this sense, a servitization organization. This certainly seems like it could be helpful for a PLM company and it isn’t uncommon in the engineering world, nor is it uncommon in the commercial sphere. Netflix and Adobe are both prime examples. Netflix provides access to a plethora of entertainment with the push of a remote button and a small monthly fee; and Adobe gives company-wide access to its most up-to-date software for an annual fee.
This is all fine and dandy until democratized-progress (which is sometimes not so democratized) or corporate dealings change the product. For example, I watch South Park regularly, but I don’t pay for cable… I subscribe to Netflix. South Park has been the go-to show in my household for mindless entertainment, even though we’ve seen most episodes multiple times. Recently, Netflix’s deal with the creative company behind my beloved TV show ran out, and now I can no longer watch the foul-mouthed quintet from Colorado. Really, this is small potatoes, but it speaks to the larger issue of democratizing access.
As more companies, both commercially and professionally, seem to be adopting this format, the question begs to be asked: What are we going to lose? And, who gets to decide what stays and what goes?
Don’t get me wrong. I’m a happy lessee of a Honda Civic, and I enjoy the fact that the only maintenance required is a few oil changes (not to mention a new car every 3 years). But, varying features on a car over the years only changes a driving experience. Software changes affect workflow, time-to-market, and even the end product. It’s a tricky conundrum, but PTC seems to have their foreseeable bases covered.
What are your thoughts on leased software and servitization? Comment below or email email@example.com.
Filed Under: Rapid prototyping