SaaS Adoption Hits a Tipping Point in Product Development – Insights from PTC

Will Hastings, Research Analyst Manager at PTC

Software as a Service (SaaS) is now a game‑changer for PLM and CAD. Research Analyst Manager Will Hastings of PTC shares his insights on the next phase.

The pandemic pushed many teams to work from home, driving a surge in video‑conferencing tools such as Zoom. Yet, simply adding a conferencing app is only a partial fix; productivity suffers when collaboration tools remain separate from the core design and execution platforms.

PTC believes that cloud‑native SaaS, built for flexibility, collaboration, and mobility, will empower organizations to thrive in a dispersed, digitally connected environment.

A recent survey of 150 senior leaders in engineering design, manufacturing, and product lifecycle management revealed that interest in SaaS far exceeds historical market trends.

Embracing SaaS‑based solutions

Although SaaS currently captures only a modest share of the CAD and PLM market, the survey indicates a strong willingness among respondents to consider SaaS for their next solution. For CAD, 75 % were open to SaaS versus just 9 % opposed. In contrast, only 52 % expressed interest in on‑premises CAD, with 25 % hesitant (Figure A). A similar pattern emerged for PLM, though the preference for SaaS was slightly lower (Figure B).

These findings imply that earlier doubts about SaaS—once a barrier to adoption—are now unlikely to influence market dynamics. Product‑development leaders are actively seeking a broader array of SaaS options. The following questions shed light on the forces behind this attitudinal shift.

COVID‑19 as a catalyst

To confirm the hypothesis that COVID‑19 has accelerated SaaS investment, respondents were asked how the pandemic influenced their interest in cloud‑based solutions. Thirty‑five percent reported a heightened or markedly increased interest in adopting SaaS for CAD or PLM (Figure C). The pandemic’s disruption may well trigger a large‑scale migration to SaaS within product development—an evolution already observed in other enterprise domains such as CRM and HCM over the past decade.

Intrinsic benefits fuel adoption

Although COVID‑19 may ignite the shift, sustained growth will hinge on SaaS’s inherent advantages over other deployment models. Participants assessed 18 business drivers—spanning deployment and architecture—to determine whether SaaS or on‑premises best met each need.

The results speak for themselves (Figure D). With only two exceptions, respondents judged SaaS as better positioned to deliver on each driver. Drivers tied to collaboration, scalability, total cost of ownership, and innovation velocity, in particular, favored SaaS, illuminating why the pandemic has heightened interest.

As anticipated, local accessibility—accessing features offline—leaned toward on‑premises solutions. A noteworthy split emerged around cybersecurity, suggesting that further research is needed to discern whether this reflects divergent expert opinions or gaps in market understanding.

Beyond adoption drivers, the survey uncovered inhibitors—software capability concerns and cultural barriers—that will be examined in Part II.

For more on PTC’s perspective on SaaS in product development, click here.

Author: Will Hastings, Research Analyst Manager, PTC.