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Partnerships and Evolving Messaging to Find Each Customer’s Sweet Spot |
NEWS |
PTC has always been ahead of the curve with technology and its value to enterprises. The challenge is having to wait for enterprises to catch up and realize they should invest in new technology. Two years ago, PTC’s theme was “Take a Fresh Look” and this year’s theme was “Partner to Create.” Partnerships are critical in the IoT market and, given PTC’s role traditional role in an enterprise, partnerships are especially critical. Major partnerships announced were with Ansys, Rockwell, and Microsoft.
The Ansys partnership will enable finite element analysis in real time on Creo-created parts. Discovery Live is the Ansys product providing real-time stress load simulation, which will be integrated into PTC’s Creo Computer-Aided Design (CAD) software. The combined product set will reduce total product development time and allow the two companies to better compete with Siemens and Dassault.
The Rockwell partnership involves a US$1 billion investment by Rockwell in PTC stock. Rockwell has been slow to the IoT party, but it has been aggressive the last few years first with FactoryTalk, and then with Project Scio analytics and applications services. However, it is clear Rockwell saw the gaps in its IoT portfolio and that internal development would never catch up with the market opportunity, hence the PTC partnership. One area of focus was in analytics automation, which PTC offers through its ThingWorx Analytics (formerly Coldlight) services. Rockwell offers manufacturing equipment for discrete, hybrid, and process industries, and it has more than 35,000 customers in over 80 countries.
The Microsoft partnership was announced in 1Q 2018 and continues to evolve, but at LiveWorx, this was presented as two companies whose values are aligned to help companies advance their digital innovation initiatives. PTC was highlighted by Microsoft Vice President (VP) Rodney Clark for its best-in-class CAD and Augmented Reality (AR) toolsets, which complement Microsoft’s strengths in cloud and security offerings. Rodney stated that Microsoft is investing US$5 billion in IoT, with major focus areas of intelligent edge and intelligent cloud.
The products most highlighted at LiveWorx 2018 were AR, Creo, and Navigate/Windchill. Messaging around other major product classes, including ThingWorx IoT platform, IoT-apps, analytics, and Kepware, were not given major presentation roles; however, they were mentioned by many speakers as valuable toolsets used on their journey for building smart, connected products, operations, and systems.
Security was also an area that PTC was mentioning more readily throughout the event. Driven by the increasing emphasis on data privacy and security (e.g., the General Data Protection Regulation (GDPR) and industrial market needs for secure solutions, PTC has been building a library of white papers on the topic over the past year.
Prominent Themes from LiveWorx 2018 |
IMPACT |
Following a review of all the activities and discussions with enterprises and PTC, there were four prominent themes:
Analyst Take |
RECOMMENDATIONS |
PTC sits in a position in the market that can be either considered a disadvantage or an opportunity. It is disadvantaged by the fact that, in the IoT space, it does not own critical control points, such as the cloud or the endpoint itself. Targeting the industrial space provides another challenge, as owning the machines gives the Original Equipment Manufacturers (OEMs) deep insight into the design, operating capabilities, and operating environments, including the related field services markets.
However, the opportunity is that PTC has a suite of products that are the glue for building smart products and processes. Traditionally, it has always had the software for product design and PM/SLM, i.e., the Information Technology (IT) side of the business. Adding ThingWorx, Kepware, Coldlight, Vuforia, and enterprise apps has brought PTC closer to the machine operations and associated processes and people needed to run the business, i.e., the Operations Technology (OT) side of the business. Kathleen Mitford, PTC’s VP of Product & Market Strategy says PTC has the only portfolio that allows creating a digital thread across digital, physical, and human assets—and I agree! As the LiveWorx event showed, momentum is growing for PTC for its vast product suite. And it is clear in speaking with and hearing from industrial customers that PTC plugs gaps for OEMs that simply do not have the time or money to invest in building scalable IoT solutions.
But this momentum can be short-lived because with Do-It-Yourself (DIY) as one of its primary competitive challenges, in some ways, PTC could be considered more of a “fill the gap” solution provider versus an end-to-end IoT solution partner. This is not necessarily a negative perception, but it exemplifies the importance of innovation and staying “best of breed” in its various product segments by investing in product development and possibly making more acquisitions. As enterprises mature and need more advanced components of an IoT solution, they will turn to the “best of breed” suppliers. Product development will also be critical to ensure that partners do not chip away at PTC’s value proposition by creating similar solutions.
The other area critical to PTC’s success will be a continuous focus on cross-product line integration to drive value in adjacent PTC solutions. PTC is well aware of this and some of its integration efforts have likely not been well publicized. Smartly, its AR portfolio, as shown at LiveWorx, is the poster child for demonstrating its integration efforts, but PTC will need to expand its messaging to demonstrate integration value outside of AR.