PTC Live: CAD, PLM, Services, IoT – lots of IoT

PTC had a tough balancing act last week at its Live Global event: act like a CAD and PLM company for the majority of the attendees, help a smaller but vibrant community of manufacturers develop their services delivery capabilities while also pulling us towards the Internet of Things. If attendees were focused, they got what they came for; if they were willing to look up and around a bit, they got a great deal more.

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To characterize it as a single “PTC Live” isn’t really right, since three events were taking place simultaneously. The main event was PTC Live, fka Planet PTC, in its 25th anniversary incarnation. PTC Live covered all things Creo, Windchill, Mathcad, et al and presented content related to PTC’s more traditional portfolio, end-use cases and end-industries. Alongside that event, like last year, was the Service Exchange, sessions focused on helping customers build a sustainable competitive advantage through services offerings. New this year was the third event, LiveWorx, which presented PTC’s second-to-last acquisition to all attendees and then channeled off for deeper dives into harnessing the value of the Internet of Things.

We started out together for Monday morning’s keynote, headlined by PTC CEO Jim Heppelmann:

Mr. Heppelman sees PTC’s evolution as natural, both a consequence of and a driver for the way our manufactured goods are changing. He told attendees that products that used to be purely mechanical have evolved to contain electrical and, increasingly, intelligent components — and that these products will soon be connected to a support network, perhaps via the Internet of Things (IoT). CAD used to be enough; now it’s essential but no longer all you need to design a modern, competitive product. Collaboration and distributed workers mean you need PLM; add in software, and you need ALM; grow stronger customer relationships and profit centers via a services offering, and you may need SLM. Mr. Heppelmann sees PTC now offering a closed loop: Creo for physical design, Integrity for software design, Atego (see below) for systems engineering, all managed in  Windchill. SLM (Services Lifecycle Management) manages the manufacturer’s relationship with the product and customer after sales, through its services life. All of this is enabled by the technology PTC acquired with ThingWorx, its IoT brand.

It was important that PTC started the three events by bringing everyone together, to make clear that there’s a coherent, overarching strategy — and that PTC is committed to serving its manufacturing constituency from any part of the customer enterprise: design, manufacturing or service. Once past that, though, Mr. Heppelmann’s excitement about the IoT came to the fore. He talked about the potential for the IoT to change the way products are designed, sold and serviced, and told us that

The IoT isn’t really about the Internet, it’s about the things. The things are what’s changing. That’s where the innovation is really happening … There is no Internet of Things without your things.

The keynote session included customer presentations; foreshadowed product release announcements and introduced us to Atego, the latest acquisition.

Atego is a UK company that develops applications for model-based systems and software engineering. PTC paid $50 million in cash for the company, which had revenue of about $20 million in 2013.  Atego’s eponymous solutions connect requirements, architecture, physical product design and system verification to make it easier to standardize processes and common components, combining mechanical, electrical , controls and software. Brian Shepherd, EVP Enterprise Segments, PTC told us that Atego “extends our existing ALM and PLM technologies, and directly supports customers’ needs to integrate multiple systems engineering disciplines.” PTC expects the acquisition to close in FQ4, which ends September 30. Given that timing, PTC expects to realize about $5 million in revenue from Atego and expects it to be neutral to PTC’s non-GAAP EPS.

Many of you want to know what’s coming in Creo and Windchill. Mr. Shepherd and Mike Campbell, EVP CAD Segment, quickly ran through dozens of highlights and showcased customers along the way:

while VP Brian Thompson took a deeper dive into Creo 3.0:

From my conversations with attendees, the most popular coming attraction in Creo 3.0 are

  • The multi-CAD capabilities aka Unite, which will let users open native CATIA, NX, and SolidWorks parts without needing a 3rd party license or converting data. Unite is available in PTC Creo Parametric, Creo Direct, Creo Simulate, and Creo Options Modeler apps. In addition, users can import Solid Edge and Autodesk Inventor files into PTC Creo without the need for additional software (note that the first set of file formats are opened directly; the last are imported). Users will also be able to save changes in native SolidWorks, NX and CATIA formats later in the 3.0 release cycle.
  • The new PTC Creo Design Exploration Extension (DEX), a dedicated environment in Creo Parametric for creating and investigating design alternatives. The designer sets a baseline design and creates branches and checkpoints, can bookmark alternatives.
  • New and improved resources to help Pro/E users (for example) get up to speed more quickly — tools like a command finder, “getting started” tutorials and guides, and a fully searchable help system should increase that productivity curve.
  • Your mileage, of course, may vary so take a look at all of Creo 3.0 here. Also, see more about Creo Elements Direct 19.0 here. Creo Elements Direct 19.0 is out this month; Creo 3.0 is out in July. The Unite enhancements will be phased in between July and the December 2014 maintenance releases

I also spent a bit of time in the Service Exchange. It was a fascinating look at the opposite end of the product creation process. One company after another told of its journey from making air conditioners, electronics, or industrial equipment that was serviced by a contractor, to expanding their services capability for existing products, to fully blended product/services offerings. I learned that there’s a continuum from the “white van” (a van rolls out to investigate a customer report without knowing anything about the service call) to the “outcomes-based service model”, where the focus is on the outcome that results from having the product: air temp between 65  and 75 degrees Fahrenheit with average energy consumption of X watts/hour for an air conditioner, perhaps. How the vendor reaches that target is a combination of product design and service.

PTC’s research shows that 70% of companies are today at the white van end of the continuum, and many want to aggressively move their businesses to include more services. Depending on the situation, motivations are financial (many services offerings are highly profitable), competitive responses, the result of a lack of good services partners — but it’s far from easy. Company cultures often value product design more highly than services; there may be a lack of connection between services, sales and marketing (let alone engineering) to make the necessary changes; too few talented service reps capable of upping their game to a bigger offering; and, music to PTC’s ears, a lack of specialized technology for services. It’s not PLM, it’s not ERP, it’s a distinct set of IT tools that are just now starting to emerge as purpose-built to support a more services-centric go-to-market.

The journeys seem well worth it. I didn’t sit in on any presentations where a speaker said it so boldly as “we went from $XX and profit of $YY to 3*$XX and 5*$YY”, but it was implied again and again: it’s possible to design product/service offerings that increase service revenue and profitability, while building closer customer relationships.

I also tried to get to as many other sessions as possible. Since I’m interested in oil and gas, I attended Petrobras’ session on PROTEUS, a system they developed to gather data from CAD tools (Integraph’s SmartPlant and PDS, AVEVA’s PDMS, and others) and corporate databases to integrate business processes during the design, construction and assembly of production units in Brazil’s Campos Basin. PROTEUS gathers piping, equipment, structural and other discipline-specific data and feeds that to viewers, on-demand. They use it for design reviews, inspection reports, simulations for emergency and planned shutdowns and ergonomic studies. PROTEUS uses Creo View to connect these data sources together, and Arbortext and Creo Illustrate to simplify report generation. On their roadmap: doing materials management with Windchill. There was a mining session, too, though I wasn’t able to attend that one. Today’s PTC is so much more than auto, aero and industrial machinery. And that’s a good thing.

As end-products have grown more complex, so has PTC’s offering. From CAD, to PDM to PLM, to ALM, to SLM, to IoT. The company wants to serve its customers more broadly, moving outward from engineering to manufacturing to controls to service. To be sure, the majority of the customers at PTC Live were CAD/PLM types, many of whom seemed happy in their CAD/PLM worlds. But quite a few were intrigued by the potential of working with their support team to build a more serviceable product, or connecting to the IoT and figuring out how that data could change their businesses. They’ll stick to CAD for now, but are keeping their eye on what PTC does next.

Here’s one more video, the IoT keynote which starts at 31:00. Example uses start at 41:00 or so:

* If the embedded videos don’t work, try http://www.ptc.com/events/ptc-live-global-keynotes-2014/.

Note: PTC graciously covered some of the expenses associated with my participation at the event but did not in any way influence the content of this post.

Images courtesy of PTC, videos; Monica Schnitger, top photo.

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