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Summarizing PTC’s Decades of Fervent In-House Innovation (and Acquisitions) - Part 2

Written By: Predrag Jakovljevic
Published On: May 11 2011



Part 1 of this blog series introduced Needham, Massachusetts, United States (US)-based Parametric Technology Corporation (PTC, NASDAQ: PMTC), which is an over US$ 1 billion large software company that develops, markets, and supports product development software solutions and related services. The article analyzed the company’s genesis from its inception in 1985 through the mid 2000s.

In addition to delivering Pro/ENGINEER (a.k.a., Pro/E, recently renamed Creo Elements/Pro) the first parametric, associative feature-based, solid (3D) modeling computer-aided-design (CAD) software in 1988, PTC has since acquired 18 companies to add both technology and industry expertise to its offerings. The article paid special attention to the following noteworthy acquisitions:

  • Computervision in 1998 for its competing CADDS product, but which also, as a byproduct of the acquisition, provided PTC with Windchill Technologies and its first-to-market Internet-based product lifecycle management (PLM) solution. Today, the PTC Windchill PLM suite [evaluate this product] is one of the company’s two main product lines and growth engines (as it will be analyzed shortly)

  • The Division Group in 1999, for the visualization ProductView product, which was recently renamed Creo Elements/View in connection with the launch of PTC Creo, which will be described in more detail in subsequent articles

  • Arbortext in 2005, for its technical product data authoring and dynamic publishing solution, followed by the acquisition of ITEDO, a 2D and 3D technical illustration and animation software company, in 2006. The added capabilities for dynamic authoring, publishing, and service information have enabled service organizations to create and manage the content needed by field service professionals

  • Aptivis Technology Corporation in 2005, which formed the basis of Windchill FlexPLM [evaluate this solution], a specialized version of Windchill that has enabled PTC to address the enterprise PLM needs of retailers as well as footwear and apparel/fashion (so-called “softline”) manufacturers and retailers

  • CoCreate in 2007, for its direct modeling 3D CAD capabilities, primarily to add its existing customers and history-free, dynamic modeling capabilities to PTC’s CAx (computer-aided technologies) arsenal. The product was recently renamed Creo Elements/Direct (see Part 1 for more detail on the differences between parametric/history-based and explicit/direct modeling approaches)


Most Recent Acquisitions

Most recently, PTC acquired the assets of Synapsis Technology (later renamed InSight) in 2008, Relex Software in 2009, and Planet Metrics in 2010 for environmental compliance, environmental impact, and product quality and reliability solutions, respectively. PTC's high-tech and medical device customers should especially benefit from the vendor’s newly added support for environmental compliance regulations.



PTC’s Windchill Product Analytics (f.k.a. InSight products) enables companies to manage and improve the environmental performance and regulatory requirements of their products, parts, materials, and suppliers. Windchill Environmental Compliance, Windchill Cost, and Windchill LCA solutions enable manufacturers to measure and improve product performance relating to restricted substances, carbon consumption, and cost analysis of products and their components. These help companies effectively improve environmental performance while reducing costs and mitigating risks.

Last but not least, the purchase of Relex has provided PTC with advanced reliability and quality management engineering software that provides key system performance metrics such as reliability, maintainability, and prediction. The metrics are shown in a flexible and intuitive framework that ties compliance testing and reporting back to the product design where necessary changes, e.g., corrective and preventive action (CAPA), can be made. For more details on how Windchill Quality Solution (f.k.a. Relex Reliability) enables organizations to plan and evaluate product reliability, safety and maintainability, see Tech-Clarity’s blog post by Jim Brown.

All of these recent product additions have meanwhile been turned into integrated modules for the idea concept and product design phases of the product lifecycle within Windchill 10.0. This offering started shipping in April 2011 and deserves an in-depth article of its own in the future. For now, it suffices to say that V. 10.0 has been the largest release of Windchill ever, with a US$100 million research & development (R&D) investment after being spent in the works (including the feedback from over 55 beta customers) for 27 months.



(I should note here that PTC announced on April 7, 2011 an agreement to acquire MKS Inc. to enable customers to unify management of product hardware and software development lifecycles.  MKS shareholder approval is expected in June.)

Expanding Beyond the Design Phase

Generally speaking, all of the aforementioned acquisitions have contributed to the products, solutions, and corporate culture that make PTC the leading provider of product development solutions. Integrated solutions have enabled PTC to help customers optimize their product development processes and realize greater business value.

In the past, Siemens’ Teamcenter PLM suite has been broader in terms of the product lifecycle phases it addresses (i.e., simulation, maintenance, repair & overhaul [MRO], supplier management, reporting & analytics, manufacturing process management [MPM], etc.). Windchill, by contrast, has tended to be used by its customers mainly as a CAD data manager for design engineers. This was consistent with PTC’s initial “product development” focus, as opposed to the broader product lifecycle needs that manufacturers have throughout the entire “concept/idea, design, manufacture, and service” lifecycle of a product.

But this situation has changed during the last few years. In addition to the aforementioned new quality and product analysis modules, there is the Windchill MPMLink module (from former Polyplan, see Part 1 for more detail) within PTC’s integral Product Development System (PDS). Moreover, the vendor has developed a new generation of Arbortext solutions that should enable product organizations to associate their downstream technical and service information (e.g., illustrated 3D parts catalogs, marketing specifications, Web-based training materials and interactive 3D service procedures) with original product development data located in PLM tools.

As described in Part 1, this integrated field service solution is designed to ensure that updates in product designs are reflected in real-time within a service information system (SIS) throughout the product lifecycle. In contrast, traditional pre-published hard copy content easily gets lost and/or outdated in the field.

Pursuing PLM (Enterprise) Solutions and CAx (Desktop) Solutions Markets Differently

The PLM and the CAx (and other desktop software) markets PTC serves present different growth opportunities for the vendor. PTC believes that the market among large businesses for enterprise PLM solutions (referred to as “Enterprise Solutions”) presents the greatest long term opportunity for revenue growth for the company (even if at somewhat lower profit margins in comparison to its desktop software “Desktop Solutions”). The revenue from this market is expected to constitute an increasingly greater proportion of PTC’s revenue over time. In addition, PTC believes that the markets for both its PLM “Enterprise Solutions” and CAx “Desktop Solutions” among small- and medium-size businesses also provide an opportunity for future growth.



PTC’s PLM solutions suite addresses common challenges that product companies, in particular discrete manufacturing companies, face in their product development processes, including PDM (often involving multiple CAD file formats), communication and collaboration with the extended enterprise, product/project/program and portfolio management (PPM), engineering change management (ECM), requirements management, regulatory compliance, technical and marketing documentation, product quality and reliability, and product parts, service, and maintenance requirements.

PTC Windchill PLM Suite

The PTC Windchill suite of solutions is a family of Internet/browser-based content and process management solutions for managing complex product data and relationships, processes and publications. Windchill has many modules for PLM that manage bill of materials (BOMs), collaboration, and integration with other enterprise and manufacturing systems. Some Windchill modules that are worth mentioning here are as follows:

  • Windchill PDMLink -- a PDM solution that is used to control information by facilitating data accessibility to automate and manage the product development process throughout the life of a product. Windchill PDMLink is fluent with workgroup level CAD data management as well as complete enterprise-wide PDM and enables BOMs and document management, change management, and configuration management.

  • Windchill ProjectLink -- a collaborative project management solution that enables companies (including their employees, channel partners, suppliers, and customers) to work together on projects through Internet-based compartmentalized workspaces. Windchill ProjectLink also has capabilities for project plan development, milestone and deliverable tracking, activity assignment and management, and on-line discussion forums.

  • Windchill ProductPoint and SocialLink are solutions that, by extending the capabilities of Microsoft SharePoint, enable the sharing of CAD and other structured data among teams through social computing and associated Web 2.0 technologies. These offering should attract interest among small to midsize manufacturers seeking a team-centric PLM offering with a good understanding of how design teams collaborate on new product development.


The enterprise-class Windchill PLM suite has driven much of PTC’s revenue growth for the past several years, and the company is striving to take market share and grow Windchill and Arbortext by over 15 percent in 2011. In June 2008, PTC announced its "domino" strategy that places a high priority on pursuing opportunities for its Windchill PLM software and services at the world's largest discrete manufacturing companies. PTC believes it can offer the most comprehensive solution of the major PLM technologies available today.

Domino wins are those situations in which PTC is selected as the winner in a highly competitive situation.  Since 2008, PTC has announced 25 "domino" account wins with a goal of 30 by the end of this fiscal year. These wins are important because PTC believes that they serve as a "signpost" signaling the technological superiority of its products.

PTC calls them “domino" wins because, like the game that involves tipping over a series of domino pieces with each one being tipped by and then tipping over another one, the vendor expects that each time one of these selections tips over in PTC’s favor, it will help the vendor tip over the next opportunity through a momentum driven by success in being chosen by the world's largest companies.  As PTC demonstrates the real value of its PLM technology in the initial installation phase, it expects that these accounts will be significant customers for years to come.  This is already the case with the largest existing customers who look to PTC year after year for more value from additional products, modules, and services.

Part 3 of this blog series will analyze the current state of affairs of PTC’s desktop CAx solutions (including the aforementioned PTC Creo suite of applications) and the company’s competitive positioning. In the meantime, your comments, thoughts, suggestions, or individual experiences with the aforementioned product development issues and PTC’s related solutions are customarily more than welcome.
 
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