Content Management Vendors May Challenge Growth for PLM's New Product Data Management Strategy.

PALO ALTO, Calif. -- Product lifecycle management (PLM) has had a slow start despite its potential to create operational efficiencies in the life sciences market. Enterprise resource planning (ERP) is likely to provide the necessary impetus for the PLM industry to take-off successfully.

New analysis from Frost & Sullivan (http://www.healthcare.frost.com), PLM Markets for Life Sciences, reveals that revenue in this industry totaled $38.3 million in 2004 and is projected to reach $48.8M in 2007.

If you are interested in a virtual brochure, which provides manufacturers, end-users and other industry participants an overview of the latest analysis of the PLM Markets for Life Sciences, then send an e-mail to Danielle White - Corporate Communications at [e-mail] with the following information: your full name, company name, title, telephone number, fax number, and e-mail. Upon receipt of the above information, an overview will be sent to you via e-mail.

"There is a move to position PLM as the backdoor extension to enterprise ERP," says Frost & Sullivan Research Manager Amith Viswanathan. "Since 45 percent of life sciences companies already have a current or a legacy ERP system license, conversion to PLM is just the natural next step."

License restructuring and add-on discounts are expected to become a key part of the penetration strategy for PLM vendors having an ERP presence.

Once PLM gathers pace in the life sciences market, there are possibilities of fusing it with ERP systems to form a unified solution that eliminates complicated and expensive integration procedures.

However, ERP's existing links with data management systems may create a cheaper solution for customers, and bypass many of PLM's similar application sets. Faced with this challenge, PLM vendors need to consider "out of the box" solutions wherein they focus on core application sets and use flexible integration software to win business.

There are still chances of encountering integration roadblocks in these "out of the box" solutions. For instance, the bulk of the integrations between dissimilar PLM and ERP applications require conversion software. Not only does this add extra layers to an already bulky infrastructure, but also it can lead to conversion errors and data migration problems.

"For such larger installations, the market is likely to continue to rely on conventional integration channels that add heavy premiums to PLM prices," notes Viswanathan.

Vendors must also be ready to face competition from content management (CM) vendors seeking to expand their presence in the enterprise applications markets. Regulatory document management, in particular, is a prime candidate for competitive entry.

Warding off competition from CM vendors is likely to be a potentially difficult task. This is largely because current and legacy CM systems are used in over 70% of the life sciences market. This gives powerful leverage to established players to expand outward into specific data and document management niches like manufacturing, clinical trials, and resource planning.

"If larger CM vendors decide to compete, PLM companies could have a serious issue on their hands," cautions Viswanathan.

The threat posed by CM vendors is expected to be greater for PLM companies striving to make inroads in the process engineering segments such as biotechnology and pharmaceuticals.

CM vendors are likely to adopt aggressive strategies to maintain their dominance. They are already adding tools that resemble PLM such as document archive and authorization and eRoom collaboration.

Although PLM is highly undersold in process engineering industries such as pharmaceuticals, the year 2005 is anticipated to witness profound changes in the way PLM is perceived in more discrete manufacturing industries such as medical devices.

"PLM is moving to add value to logistical efficiency goals that are coming sharply into vogue among management circles, such as just-in-time inventory planning," concludes Viswanathan.

PLM Markets for Life Sciences, part of the Life Sciences Information Technologies subscription (9654-B1), evaluates the key drivers and challenges in the PLM markets for life sciences. This research service evaluates buyer behavior and includes both their pain points and the factors that influence their purchase decision. Participants can use such information to direct solution sets in the right direction for gaining long-term traction. The study also focuses on the trends shaping the market and discusses possible ways of gaining market share. Interviews are available to the press.

Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. Our advisory expertise integrates growth consulting, growth partnership services and corporate management training to identify and develop opportunities for our clients. While serving clientele ranging from virtually every Global 1000 to emerging companies, Frost & Sullivan's comprehensive industry coverage includes a global perspective of all vertical and horizontal industries. Our unique coverage combines ongoing analysis of markets, technologies, econometrics, and demographics. For more information, visit us at http://www.frost.com.

PLM Markets for Life Sciences

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Keywords in this release: product lifecycle management, PLM, life sciences, enterprise resource planning, ERP, content management, process engineering industries, document archive and authorization, eRoom collaboration, regulatory document management, research, information, market, trends, technology, service, forecast, market share