Quick update on PTC + Rockwell

Jun 19, 2018 | Hot Topics

I’m at PTC’s LiveWorx user conference this week. Yesterday, CEO Jim Heppelmann gave a bit more detail on the partnership with Rockwell Automation, announced last week. A quick recap: Rockwell is buying 8.4% of PTC’s shares for around $1 billion. PTC will use that money to buy back shares from other investors, to not dilute their investment in PTC.

Yesterday we learned that

  • PTC has factory customers, just not very many right now. Growing that part of the business with its existing sales force is challenging — Rockwell brings thousands of sales people and even more installed customers. PTC’s goal with this partnership is to enable those sales resources and define a joint go-to-market for ThingWorx
  • Rockwell’s automation solutions serve both discrete manufacturing and process industries. PTC doesn’t do much in process, so this gives it access to a completely new set of prospects
  • The deal does limit PTC’s ability to sign similar partnerships with Rockwell’s top competitors but that leaves lots of others to consider — but Mr. Heppelmann was clear: the Rockwell partnership gives PTC the access it wants and should keep it busy for the foreseeable future
  • The GE relationship is still in place — just not as active as GE’s interests shift under its new CE

Mr. Heppelmann said that PTC has typically gone it alone, which he sees as limiting. Partnering with Rockwell (and ANSYS and Microsoft, more to come on those) will enable PTC to better compete against vendors like Siemens, who offer IoT/PLM/CAx and factory automation.

Of course, it all comes down to execution. How well PTC and Rockwell align their strategies for specific customers, markets and geos — and then how well the individual sales teams sell products that may be outside their typical — will determine the success of the partnership. Mr. Heppelmann said that Rockwell has made revenue commitments but didn’t share those with us. For now, it seems that PTC is taking an all-in approach on the go-to-market but a very conservative “wait and see” for revenue.