PTC is a top three PLM vendor and has a long history in engineering software and PLM. PTC’s strategy is unique, aimed at helping manufacturers achieve “Product and Service Excellence.” While other vendors have invested in “managing products across their lifecycle” – as the PLM standard definition suggests – most have focused primarily on supporting products during the development phase. PTC has gone further by bringing complementary capabilities to manufacturing companies in service, among other “adjacent” capabilities.
This strategy review is a part of Tech-Clarity’s Strategic Visions of the Major PLM Vendors 2104+ series on the vision of the leading PLM vendors.
A Bit of History
PTC has a long legacy in the CAD industry and acquired their PLM product, Windchill, in 1998. The PTC website says that Windchill was launched in 1998 with subsequent modules ProjectLink and PDMLink launched in 2001 and 2002. With the acquisition they also picked up current CEO Jim Hepplemann, who has been setting PTC product strategy for as long as I can remember.
Over time, PTC has extended their PLM footprint in a few distinct areas. One of the first that comes to mind is acquiring Arbortext. Arbortext helps companies effectively develop documentation, including highly graphical product and service documentation. This was the first capability to give PTC a significant offering for the service industry, but also met a strong need close to PTC’s core domain because creating product and service documentation (and keeping them current as products change) is a challenging aspect of product development. The “service” aspect was initially a relatively minor piece of the PTC footprint but picked up tremendous speed with the acquisition of Service Lifecycle Management (SLM) vendor Servigistics. SLM is a complementary solution and fits in the enterprise ecosystem for manufacturers alongside ERP, PLM, SCM, CRM, and others.
PTC has also acquired solutions to support Quality Management (QMS) and Product Compliance in the context of product development, design, and engineering. The product compliance solution has since been expanded to provide broader product analytics capabilities in addition to environmental product compliance and sustainability. They also acquired MKS for embedded (product-oriented) software development to support the development of smarter products. These are all examples of PTC solving new problems that are close to the core of the product development challenge. This is not accidental, it is a proactive approach. But perhaps I am getting ahead of myself…
The PTC Strategy
I’ve had the opportunity to look at the PTC product strategy over the years. The one word that sets their strategy apart for me is “adjacency.” I wish I had a better single word, so let me explain what I mean. PTC has always looked to solve more problems for their existing customers as opposed to looking for brand new markets to serve. I know some of you reading this are saying that’s an obvious strategy, but it isn’t. On the one hand, PTC doesn’t limit themselves to just making their current solutions deeper and more functional. That wouldn’t allow them to grow (which is bad for existing customers). Instead, they want to expand by continually finding ways to solve more problems for their customers (and companies like them). Some of these problems are issues that have challenged manufacturers for years, such as “how can I improve my product reliability?,” while others are newer, emerging problems based on changes in the manufacturing industry and the world around us. At the same time, their strategy stays close to home. Their acquisitions and development efforts always extend PTC capabilities relatively close to the core of their capabilities and leverage what they have. Their product introductions typically add solutions that address new functions and support more departments and users in their target customer base, offering growth based on their core expertise and experience.
I’ll use two examples to illustrate this, ALM and SLM:
- PTC has a strategy for an integrated, systems-level product development environment that addresses mechanical, electrical, and software (mechatronic) design. But they are also happy to sell MKS Integrity to customers that don’t want to integrate with existing PTC solutions. They recognize developing software for smart products is a problem that their customers need to solve, so they want to have a solution to help them.
- In the same way, PTC is not just adding some minor service functionality to their PLM footprint. They have fully entered into the SLM marketplace (see my post Does PTC Acquisition Of Servigistics Signal A New Direction For PLM Acquisitions?). At the same time, they view “servitization” – the blurring of the lines between product and service – as a critical change in the manufacturing industry and want to support it holistically with a combination of PLM and SLM solutions.
Both ALM and SLM are examples of PTC solving adjacent problems for their customers, providing strong capabilities to solve those problems today, and preparing for the future when companies are ready to adopt more integrated processes (and solutions). PTC is not going far astray from their existing industry and customer strongholds in order to grow, they are amassing a larger product portfolio to offer to their existing base.
So what should you expect next from PTC? Further development of their core capabilities, integration between the solutions they have acquired (but where it matters, not just for the sake of saying it’s integrated), a continued effort to support “servitization,” and more acquisitions to solve adjacent problems for their customers. That’s what I expect, at least, let me know what you think.