Much has happened in the highly competitive and maturing CMMS software industry during the past decade. CMMS vendors have struggled to maintain growth, remain profitable or even survive. Some have gone the merger/acquisition route, others have built competitive advantage through specialization or market focus, a few have simply milked a relatively faithful installed base and still others have combined a number of these and other strategies.
Regardless of the strategy adopted, there appears to be a pattern that I first observed shortly after I began reviewing CMMS software in the mid-1980s. Not unlike other industries, success in the CMMS world seems to revolve around innovation. More specifically, the quality and quantity of spending on R&D appears to be correlated positively with success factors such as market share, growth and profitability.
I recently happened on an article I wrote in November 1994, introducing a 50-page comparison of dozens of CMMS packages. This was my fifth such review published during a seven-year period. In the article, I reflected on CMMS industry trends during the previous decade, and the first key trend that was cited focused on research and development. The following is an excerpt from the article that rings almost as true today as it did nearly 20 years ago when the article was written.
“The future of the CMMS industry rests on the ability of vendors to keep current. Those vendors that spend heavily on R&D will be better positioned to survive the inevitable increased competition in future years. In turn, these companies can supply modern systems that are well supported and reasonably priced. As long as the hardware/software industry in general continues to rapidly evolve, pressure on CMMS suppliers to keep pace will be sustained.
“Those CMMS vendors that have completely rewritten their software within the past few years have significantly superior products to those who have not. It is estimated that the more successful vendors are cycling through a major facelift every 5 to 7 years, a major revision every 1 to 1.5 years and a minor revision every 6 months to a year. The impetus for changes stem largely from formal user groups, and prospective users demanding ‘modern’ functionality.”
Because of the growing scope and sophistication of their software, it’s likely that fewer of today’s major CMMS vendors can afford to rewrite their software packages completely as often as in the years when the two paragraphs above were written. Regardless, increased R&D spending remains an important competitive advantage for vendors and an important source of new features and functions that better satisfy user requirements.
The Plant Services CMMS/EAM Software Review, to be released later this year, will be updated to reflect recent trends in the industry. These trends are summarized below.
Comparing CMMS packages fairly on the basis of value for money has always been a struggle for potential buyers because of the many pricing schemes for the hardware, software, customization, implementation services, training, technical support, consulting, maintenance and upgrades. Price comparisons have become even more difficult during the past few years because of emerging pricing schemes such as software as a service (SaaS) and pricing based on business metrics.
Although there are many variations on the theme, SaaS customers typically pay nothing upfront for, at least, software licenses and maintenance, and, in some cases, implementation, training and other services. Instead, they pay a monthly subscription fee for a block of hours used. Pricing based on business metrics, such as budget size or even energy consumption, can provide a great incentive for companies to focus on sustainability and overall business performance.
One of the most significant trends in the CMMS industry is the development of specialized software and services for specific industries and asset classes — plant equipment, facilities, fleet or mobile assets, infrastructure or linear assets and IT assets. CMMS vendors have responded to the needs of a given niche market by hiring experts knowledgeable and experienced in each relevant industry; establishing a website, newsletter or advisory council geared to a given user group; and building appropriate functionality into the software.
For example, some CMMS vendors have wooed facilities or property management companies with features such as space planning, property performance management and energy management. Other vendors have focused on companies with large fleets of mobile assets by offering functions such as garage and bay location availability and utilization, recall and campaign capability and advanced warranty functionality. But the greatest gain in CMMS features appears to be in support of municipalities, pipeline companies, utilities, telecommunications, airports and other organizations that have linear assets. Features include tracking anomalies or features along a linear asset, sophisticated estimating capability and tracking accomplishments, such as miles of pipe inspected or acres of grass cut.
There has been a significant increase in the number of software applications with which CMMS vendors have integrated. The level of integration varies from providing a link to the application to a seamless interface where users can’t distinguish between applications. Examples of integrated applications include geographic information systems (GIS), building automation systems, vehicle telematics such as GPS or fuel consumption, document management, and real-time asset locating and tracking systems.