By Daratech's current estimates, spending on PLM software and services topped $9,64 billion in 2004, a growth of 13% over 2003. These totals far outpaced Daratech's earlier forecasts. Looking ahead, we project the PLM market to reach $10,6 billion in 2005, up 11% over 2004. These projections, however, are certain to change as companies begin to announce 2005 quarterly earnings. Indeed, Dassault recently announced strong first quarter revenue and PTC strong second quarter revenue, and both companies upwardly adjusted their respective fiscal 2005 earnings forecasts.

Market growth is attributed to several factors: the strong Euro and Yen, which boosts market data reported in US dollars, increasing acceptance of PLM concepts by manufacturing firms, and the growing maturity of PLM toolsets. It is more apparent than ever that manufacturers recognise that innovation - and not continued cost-cutting - will ultimately lead to success, which can only be positive for technology providers that aid new product development. PLM is a way to be more competitive, a way to innovate and to capture and monetise that innovation.

More than ever before, manufacturers have an opportunity to streamline their processes by formulating strategies that leverage the information-rich electronic data at their disposal. PLM offers a way out of the paper shuffle. It is said that 80% of a product's cost is built-in during the first 10% of the product development cycle; having data made available to the right people earlier in the product development process ensures that decisions will be made with better information and more confidence.

In Daratech's taxonomy, PLM includes CAD, CAM/CAE, PDM and DMPM (digital manufacturing process management). All markets included performed above expectation in 2004, and the positive results are expected to continue in 2005 and beyond.