PTC LiveWorx 2018: Evolving to Become the “Digital Thread” for Enterprise Transformation

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By Dan Shey | 3Q 2018 | IN-5221

PTC just completed its latest LiveWorx event, which was held June 18 to 20 in Boston, Massachusetts. This year was its biggest event ever, with more than 6,000 attendees. The event showcased all of PTC’s products and services that provide enterprises with a complete set of tools to create, manufacture, operate, and service products. This event was a bit different from past events, as more of PTC’s portfolio was showcased beyond the Internet of Things (IoT), which demonstrates PTC’s evolution as it seeks to become the “digital thread” in the smart connected world.

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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:

  1. Partner for Channel Growth: Partnering is necessary for multiple reasons, including innovating and creating new goods and services, gaining scale, and improving operations and supply chain management. But it is clear that partnering for PTC is becoming increasingly critical for driving sales. This is best exemplified by the partnership with Rockwell. PTC has 35 sales teams pushing its suite of products into industrial markets; Rockwell has nearly 1,000 sales teams! Rockwell and PTC are currently working on defining the activities and conditions of this partnerships to enable joint sales efforts.
  2. App-Led IoT Marketing: The IoT platform market is dense and, for many, including PTC, breaking through the noise is a challenge. Now, more and more IoT platform suppliers are marketing their platforms around specific vertical markets, typically via case studies and website marketing. PTC went a step further and is offering horizontal apps like Asset Advisor and Production Advisor. These apps can be used by multiple levels of the organization, from shop floor personnel to management, providing IoT-data driven insight into machine performance and operations impact. The more important value of these apps is that it provides PTC with a foot in the door from which to learn enterprise needs and pivot either to a different set of PTC services or grow PTC’s IoT product footprint.
  3. The Cloud and the Microsoft Relationship: The cloud was a consistent theme with PTC customers who noted that their IoT plans accelerated as their companies, many industrial, began embracing (or fearing less) the cloud. This trend favors Microsoft for its Azure services and, therefore, portends opportunities for PTC. However, this partnership needs to be nurtured and aggressively managed, as Microsoft has competing products (e.g., Azure IoT Hub) and the resources to create similar products as PTC, particularly in analytics. While the Rockwell partnership is definitely significant, an equally significant, if not more important one for PTC, is with Microsoft due to the strategic importance of cloud services to business evolution and efficiency, and its important role in the IoT.
  4. Augmented Reality (AR) is the Ultimate App and Ties Together All PTC Products: AR was given a lot of stage time with customers discussing its use and benefits. Sysmex, an anchor PTC customer, is testing AR to improve efficiency of support staff. Bell Howell is using AR for training its vast field force for installing smart locker solutions. China Industrial Marine Container is using AR for remote maintenance and looking at AR for use in its factories. AR could be considered the ultimate app in that it personalizes the customer experience and, equally compelling, its features improve productivity, which makes for a compelling value proposition regardless of the company. However, another less stated value, but evident at the event, is that AR allows PTC to tell a much larger story for its suite of products. AR can use Creo CAD data to simulate part components and their physical movements. ThingWorx-generated IoT data can populate the AR application for context. Part information and history can come from PTC Navigate. PTC’s Product Lifecycle Management (PLM) and Service Lifecycle Management (SLM) applications can both support activities in the AR application, as well as receive outcomes from the AR application.

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.

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