Tech Soft 3D Blog

Post-COVID Business Trends

Posted by Ron Fritz on Aug 3, 2020 3:06:01 PM

In my last blog, I shared the trends I picked up from talking with several dozen of our partners, focusing on the very immediate economic impacts that companies were experiencing and expecting in the very near term.

Since then, I’ve talked with several dozen industry leaders about their predictions about what a post-COVID world will look like and how that will impact our industry specifically.

trends

Let us know whether you agree, disagree or have a different idea:


Resistance to cloud-based solutions will soon seem arcane:
In the engineering market, resistance to cloud-based solutions was slowly and steadily melting
away as people realized that their concerns and objections were either a) not well-founded or
b) being mitigated with technology advances. At this point, it seems clear that resistance is
futile. This pandemic forced people to work outside of the traditional office and outside of the
traditional corporate firewall. A shift to cloud-based solutions accelerated rapidly and by the
time the COVID crisis is fully behind us, it will absolutely be the norm – and many of the fears
and objections will be disproven.


Purchasing power will shift to the individual:
During the crisis, we have seen that products which were purchased directly by users did well,
while those with enterprise sales models struggled as these kinds of top-down decisions were
on hold. This will continue, with individual users feeling more empowered to choose the best-
in-class solution that works for them. Although central decisions will still be made regarding
major tools like the primary CAD system or PLM system, individual users will increasingly use
tools of their own choosing for more of their work. This trend will put pressure on applications
to have strong interoperability, so 3D data can move smoothly between applications. It will also
help upstarts unseat legacy systems based on the merit of the solution rather than decisions made in the corporate board room. Ultimately, this will lead to more innovation at the product level and more freedom for the user.


Subscription pricing will accelerate:
The price points of subscriptions are typically such that an individual user can make the
purchase decision. In addition, cloud solutions, which will be more attractive, lend themselves
well to subscription pricing, pushing these two trends to grow together. This will be further
accelerated by companies realizing the economic benefits of a subscription model and by
extension, the economic disadvantages of the traditional perpetual licensing model. CEO’s and
CFO’s will have seen that the more a company had already transitioned to a subscription
model, the less revenue disruption they saw during the pandemic. For companies with
perpetual license approaches, new licenses were down, so they were heavily dependent on
maintenance streams – which proved to be more sensitive to economic conditions than
subscriptions. This isn’t to say that all users will prefer the subscription model, but software
companies will continue to move strongly in this direction nonetheless.


Collaboration and communication will be king:
The downside of not being together in an office is that certain kinds of communication are
more difficult than when we can be face-to-face, negatively impacting collaboration. As a
result, anything that allows people to collaborate and communicate more effectively while not
being in the same space will be extremely valuable. Video services like Zoom and Microsoft
Teams showed both how important it is to communicate and the limitations of that medium.


This will translate into a few specific trends. First, adoption of both Virtual and Augmented
Reality technologies will dramatically accelerate. Virtual because people will want to occupy
other spaces and interact more with avatars, and Augmented because the Digital Twin is the
only way for an individual who can’t physically be in the building, factory or next to a machine
to be informed.


Second, data management tools will increase in importance and be cloud-based. Storing files,
documents and models is one thing; but finding what you need precisely when you need it is
quite another and solutions that make that easy will rise.


Third, point cloud technologies - capture, management and sharing - will become important.
Increasingly, people will not want (or need) to gather at a building site or factory. Instead, one
individual can scan the building, factory, product, etc. and share it virtually and with far more
impact than video or photos.


Finally, 3D web visualization will continue to rapidly develop, since 3D can be such an effective
communication medium and models (even very large models) will need to move smoothly and
seamlessly across the internet.


Flexibility will become a critical consideration for supply chains:
While this trend is only peripherally relevant for software, it will be impactful in a number of
software areas such as supply chain management, Manufacturing Execution Systems (MES) and
Industrial IOT, Factory Planning, and off-line robotics control. Today this supply chain question
has more to do with manufacturing, but as the approach to building and construction grows to
mimic the way manufactured goods are produced, similar trends will apply.


As the COVID-19 pandemic spread around the world, it disrupted supply chains everywhere.
Since COVID-19 didn’t impact all regions of the world equally or at the same time, it illustrated
the risks involved with too much dependence on far-flung manufacturing, or too much
dependence on one country or region. In a sense, manufacturers realized that, in addition to
the cost of transporting goods, there is also a hidden cost of ‘risk of disruption’. Companies
have long considered this as they ponder the political stability of a place where they choose to
manufacture. Now it’s clear that any region, independent of its political stability, can and likely
will be disrupted at some point in the future. Once these risks are turned into potential costs,
the ‘cost gap’ between places like North America & Western Europe and other regions of the
world will shrink. In many cases, it will make more sense to move at least some manufacturing
back to these more expensive regions.


This flexibility won’t just mean geographical flexibility. It will also apply to manufacturing
methods. The trend toward using additive manufacturing was accelerated by COVID-19, as
companies were sometimes forced to shift to using additive approaches to compensate for
disruptions to their traditional supply chain. In addition, many factories pivoted to
manufacturing items related to health care – highlighting how easy it is to shift additive to
produce different products in comparison to the complexity of retooling a factory filled with
traditional manufacturing machines. Note, this does not mean traditional manufacturing will
disappear, but rather that the flexibility of additive will accelerate the trend and help
companies see the benefits additive can provide as a part of their production chain.

Automation:
Automation has grown so quickly that it deserved to be called out specifically from the trend
mentioned above. COVID-19 made it even more clear how important automation is in
manufacturing and to a lesser extent, the building industry. As investment in automation
increases, the importance of labor costs decreases. This will be a key factor in the trend
mentioned earlier of manufacturing moving back to North America and Western Europe. In
addition, increased automation means that production is less reliant on people being present,
thereby providing some insulation for a manufacturer from future workforce disruptions like a
pandemic. As mentioned above, this will be great news for IoT / Industry 4.0 technologies as
well as Robotics, Augmented Reality, etc.

What do you predict?
These views are a composite from several dozen conversations with leaders across engineering
software. Of course, not everyone shares the same views. Let us know to what extent you
agree or disagree with these points – or what you think is missing.

Subscribe via E-mail

Latest Posts

Follow Me