Part 1 of this blog series introduced Needham, Massachusetts, United States (US)-based Parametric Technology Corporation (PTC, NASDAQ: PMTC), which is an over $1 billion (USD) 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 until the mid-2000s.
Part 2 then analyzed the more recent acquisitions of the products that have meanwhile been turned into integrated modules for the idea concept and product design phases of the product lifecycle within PTC Windchill 10.0, which started shipping in April 2011 (see TEC’s certification report on the product here). The article established that the product lifecycle management (PLM) arena, also referred to as “Enterprise Solutions,” and the realm of computer-aided technologies (CAx), referred to as “Desktop Solutions,” are two distinct markets that present different growth opportunities for the vendor.
Part 2 concluded with an analysis of the PTC Windchill PLM suite [evaluate this product], which is one of PTC’s main product lines and growth engines. Part 3 analyzed the current state of affairs of PTC’s desktop solutions (including the novel PTC Creo suite of applications, as another growth engine) and the company’s competitive positioning.
The final part of this blog post series will conclude with my discussion with PTC’s executives about recent events and the company’s current state of affairs. In the meantime, I attended the company’s PlanetPTC 2011 user conference in June 2011, and here is the blog post series with my impressions and observations.
PTC Speaks Out about the Past Year
PJ: Of which capabilities are you particularly proud?
PTC: Windchill provides an integral environment in which all of our products, as well as partner and competitor products, can work together to support product innovation, quality, compliance, and efficiency across the full product lifecycle. In addition, PTC provides a business value roadmap with best practices to help guide our customers in selecting and deploying solutions in the context of their product lifecycle business processes.
PJ: What is your technological environment?
PTC: Our Windchill server software supports Java and Microsoft .NET development environments, as well as Oracle and Microsoft SQL Server databases. Our Windchill SocialLink and Windchill PPMLink server software is based on Microsoft Windows and SharePoint. Our desktop software, including Creo Elements/Pro, Creo Elements/Direct, Mathcad, and Arbortext Editor, is mostly Microsoft Windows based.
PJ: How far down the track on unifying your products on the same Creo platform are you?
PTC: In late 2010, we announced plans to release Creo 1.0 in mid-2011 (which we did with the first crop of available applications at PlanetPTC 2011), followed by additional releases of Creo applications over the next few years (please note that product delivery dates and functionality are subject to change). Over time these releases will update and support our older product design and visualization products until we have developed Creo applications that can provide the existing and new functionality that our customers require. Customers who are on maintenance will be able to move to the new Creo applications that map to existing products already licensed without paying extra.
PJ: How do you view your competitive landscape, and why do you win over or lose to these competitors?
PTC: We win because our products provide the capabilities customers need in one product design and development environment backed by a business value roadmap with best practices for selecting and deploying our solutions in value-centric engagements. In addition, customers like doing business with us because they appreciate the fact that we listen to them to understand their product business needs. Windchill is also valued for its rich support of multi-CAD environments and integration with third-party solutions in areas including enterprise resource planning (ERP) and manufacturing execution systems (MESs).
PJ: What are your views and approach toward going multi-tenant software as a service (SaaS)/on demand, or not?
PTC: Many of our customers already run Windchill in a private cloud environment and, with the help of partners, PTC can meet the needs of customers who prefer hosted Windchill services. PTC provides the product and technical support for both on-premise and hosted deployments to continue to give the choice to our partners and customers. Because of concerns over intellectual property (IP) security and system performance, we expect the vast majority of our customers, at least in the near term, to continue to choose single-tenant over multi-tenant applications in this area.
PJ: What is your view on natively linking PLM with plant automation applications, which some competitors have been offering (see a related blog post)? Will you follow suit?
PTC: Our focus continues to be on product design and lifecycle management and integration with third-party solutions in areas such as MESs. As an example, we recently announced that Apriso has joined PTC’s PartnerAdvantage Program at the Gold Tier and will be integrating its MES product, FlexNet, with Windchill.
PJ: What were the major highlights and messages from PTC in 2011?
PTC: In a nutshell, we have seen very strong interest among our customers and partners in our Creo product vision and our way of expanding the PLM footprint by adding product analytics within our integral PLM environment. Stay tuned for more on our application lifecycle management (ALM) forays following our MKS Integrity acquisition.
PJ: What is your strategy for collaborative social and mobility tools in PLM, PDM, CAD, etc.?
PTC: We have a growing set of products that leverage the collaboration and social media capabilities of Microsoft SharePoint to enable collaborative and social product development for small to large customers. These include the aforementioned Windchill PPMLink for program and portfolio management (PPM), Windchill SocialLink for product development communities, and Windchill Web Parts for SharePoint access to Windchill and other enterprise system information. The next major release of Windchill will have more of major search engine enhancements with the open-source Soir technology. In terms of our mobility strategy, you could see Arbortext working on Apple iPad at PlanetPTC 2011, and look for more mobility device enablement of our products.
PJ: Although many trends have been positive lately for PTC, what issues or challenges are still keeping you up at night?
PTC: We see our enterprise PLM (non-CAD) business as being the largest single product available from the top PLM suppliers, but that isn’t recognized in the industry due to the tendency of combining CAD and non-CAD products, which gives our competitors a size advantage. However, that hasn’t kept us from winning more than 20 large customers over our larger competitors. One of the most recent and significant ones was Hyundai Motor Company and Kia Motors Corporation (HKMC), one of the largest and fastest-growing automotive original equipment manufacturers (OEMs).
We call these Domino wins because they involve some of largest discrete manufacturing companies in the world choosing PTC after conducting comprehensive benchmarks of the major PLM solutions. Like in the game Dominos where each tile causes another tile to fall, we believe these big wins lead to additional wins because we believe they signal the technical superiority of PTC’s products. Dominos have benefited PTC in the automotive space where the growing number of wins among leading automotive parts suppliers and truck OEMs provided the momentum and credibility for us to win the auto OEM HKMC.
PJ: What do you say to the assertion that Siemens’ Synchronous technology already covers the idea behind Creo to accommodate multiple design methods? (That is, Solid Edge ST4 incorporates synchronous and ordered features in the same file. This integrated approach gives users the ability to start a design using either technology and leverage either technology as the design evolves, thus eliminating pre-planning in choosing the correct appropriate design method.)
PTC: Creo is being designed to bring together direct, parametric, 2D, and 3D modeling in a way that makes switching between design modes and models fast and easy. Attempts by other companies to also support different kinds of modeling validate the demand for this capability. With Creo 1.0 apps availability for several months now, customers, prospects, and independent industry observers will be able to assess how well Creo and other solutions address customer requirements.
Dear readers, what are your comments, thoughts, suggestions, or individual experiences with the aforementioned product development issues and PTC’s related solutions. What is your take on PTC’s stated strategy in light of the current PLM and CAD market trends that you are seeing?