With Autodesk and SolidWorks turning up the volume in the mechanical
design market, it has been difficult for other MCAD vendors to be heard. So
it was no coincidence that PTC rounded up 60 editors, writers and analysts
for some undivided attention. We gathered at PTC’s headquarters outside
Boston in a meeting that gave us insight into a company that has previously
not been all that accessible—and revealed a few surprises.
My first surprise was being invited in the first place. PTC has hardly
acknowledged TenLinks’ existence -- even though our coverage extends to PTC
products and our
TenLinks Daily newsletter goes to scores of PTC employees. Secondly, who
knew there were so many of us media and analyst types! And did you know
PTC’s Pro/ENGINEER is practically the standard in the design of bathroom and
kitchen fixtures? It’s not something PTC’s marketing department has run
with. Maybe “number 1 in the bathroom” would have undesired connotations.
Better to stick to race cars. Penske Racing, a Pro/ENGINEER user, was happy to
oblige and rolled in an F1 racing car for the event.
What shouldn’t have been a surprise is that PTC maintains a large and
loyal user base of mechanical designers -- maybe even the biggest for any
MCAD software. That is something all of us editors, authors and analysts
should not lose sight of, despite all the noise to the contrary. (See
Wohlers Report 2004
Uncovers Nearly 5 Million CAD Solid Modeling Seats Worldwide).
During the press event, we heard next release, Pro/ENGINEER Wildfire 3.0,
is due on St. Patrick’s day (March 17). PTC also presented their partners
But most of all, the press event gave me time to think of PTC, a very
important and significant CAD company, and its past, present and future.
Come from Behind
The industry media is fond of calling the MCAD market a two horse race
between Autodesk Inventor and SolidWorks. Products such as Solid Edge, VX,
Alibre and even the venerable Pro/ENGINEER face the risk of not even being
considered during a purchasing decision. How infuriating this must be for
PTC, the company that invented modern solid modeling in the late 1980s.
PTC’s first name is parametric. And now, Autodesk and SolidWorks, like ants
at the picnic, are stealing their lunch.
You could blame PTC themselves for being slow to respond or distracted
(more on that later). But now PTC seems to have turned itself around. It has
strung together several good quarters. With money jingling in their pockets,
PTC now thinks wining and dining the press corps is good idea. After all,
isn’t that what Autodesk and SolidWorks have been doing for years,
successfully capturing mindshare with the media and with it, the mindshare
of the general public?
While PTC’s competitors may have faulted Pro/ENGINEER’s ease of use -- or lack
thereof -- no one has dared to impugn its power. We can handle anything
thrown at us, say Pro/ENGINEER users, who have long maintained they are better off
than other CAD users. They don’t just talk, they swagger. They are proud to
tell you they cut their teeth on Pro/ENGINEER since release 14 or 18 or some
version released a decade ago. They have tamed a real solid modeler, not
some your-momma-can learn, pretty-icon, wannabe CAD system with goofy
wizards that promises to blend wings into a fuselage or handle your
million-part earthmover with the next release.
Power like Pro/ENGINEER’s is not for the meek. It is not conveyed after a few
nights of training at the local school where you can get your certificate
for CAD one day and swing dancing the next. This power was earned in the
pits with hard work and pain after months, even years of trying arcane
commands, poring through a users guide that at first seemed to be written in
another language, from busting your hump after others had gone home and from
stealing techniques and tricks from them when they where there. That’s what
it takes to earn your swagger.
You can spot the Pro/ENGINEER users at trade shows where big crowds gather,
lured by pretty young things who promise them t-shirts and prizes. The
veteran pitch men start working their wizardry, making their solid modeler
do one nifty trick after another in the guise of an imagined design process.
Soon the crowd is oohing and aahing, even applauding. The Pro/ENGINEER users, who
never bothered to sit down, look at each other unimpressed, and swagger off.
One will say to the other “Heck, we could do that years ago.”
Certainly deep in a CAD executive job description must be a line item
like “size up the competition.” Although there must be more scientific
methods for assessing the competition than the size of the crowds at trade
shows, that method is certainly free, easy and legal. It was probably easy
for PTC executives to make the connection between their bottom line and the
numbers of attendees being seduced by the flashy 10-minute canned
let-me-show-you-how-easy-it-is, no-training-needed, be-productive-next-week
MCAD programs. Maybe in a eureka moment, someone high up may even have
realized that although spending on R&D helps hang on to the current users
(PTC spends 17% of revenue on R&D), it is ease of use that gets new ones.
The Good Old Days
Flash back to the early 90’s. PTC was on top of its game. It had
single-handedly created a new market. Pro/ENGINEER was flying off the shelf. PTC
couldn’t keep up. They even turned away customers who didn’t look like they
would buy right away or wouldn’t buy enough. I know. I worked for a $100
million defense contractor and we were looking for a MCAD system. PTC
wouldn’t give us the time of day.
But the years have not been kind. Like an aging actress, PTC has seen the
spotlight swing away. Upstart SolidWorks not only has won over hundreds of
thousands of 2D users but its success has even forced the lumbering giant
Autodesk to spawn Inventor--which Autodesk claims is the new leader in units
“Simple, Powerful, Connected”
Can Pro/ENGINEER add the simplicity to attract new users without losing the
power? That was the goal behind Pro/ENGINEER Wildfire, a complete rewrite of
the flagship product with a new interface. The new name (rather than just
call it another double digit revision) was meant to underscore its
difference from previous editions. Ease of use was stressed. The first
Wildfire release may have thrown the old-school Pro/ENGINEER power users, many of
whom had grown accustomed to its clunky, aging UNIX-look. They complained
about a loss of functionality and power which they had come to love, feeling
that it had been sacrificed for an ease of use they didn’t need. But with
release 2.0, those complaints started to subside. Pro/ENGINEER Wildfire, by all
accounts, seems as powerful, if not more so, than the Pro/ENGINEER of old. And
Pro/ENGINEER Wildfire 3.0 seems intent on piling on even more power.
Is it the simplest MCAD program now? Let’s not get carried away, says
Michael Campbell, PTC’s VP of Product Development. “We know
Pro/ENGINEER is not
going to be the easiest CAD system out there—it’s just too powerful.”
The theme oft repeated at the press event was “simple, powerful,
connected.” It’ll take more than a marketing slogan to convince the masses.
However, given that Pro/ENGINEER is a very capable program, PTC seems to have
solved the toughest part of the formula for market domination. One has to
start with a robust product. Millions of mostly 2D CAD users have yet to
make the decision as to which CAD program to buy and big customer wins will
certainly not go to MCAD programs that cannot do it all.
Juice is Not Worth the Squeeze
The only chink in Pro/ENGINEER’s armor (as far as capabilities go) seems to be
lack of advanced surfacing. This may be only a perceived deficiency as
does indeed have several advanced surface commands. PTC also sells
Pro/ENGINEER Interactive Surface Design for free form surfaces, for
industrial designers who are famous for using smooth, curvy organic shapes,
quite unlike prismatic shapes favored by machine designers, mechanical
engineers, tooling designers and the like. Still, PTC acknowledges CATIA’s
lead in advanced surfacing, in particular with automotive styling, aircraft
fuselage and ship design. PTC will not aggressively pursue that market.
Perhaps they think too few potential customers occupy this lofty realm. Or,
PTC may consider CATIA, the industry powerhouse, to be too deeply
entrenched: the juice is not worth the squeeze.
However, its failure to provide sophisticated tools and the lack of high
profile customers could be looked on as a weakness by the market. Let’s face
it: planes, trains and automobiles are sexy. Software used to design them is
looked at with admiration. In a MCAD market that seems to be playing follow
the leader, the strategic decision not to create dominating, world-class
advanced surface capability -- and to not pursue the high profile customers
who need it -- is a mistake.
For now, PTC claims to be content with winning a few battles. It claims
leadership among MCAD vendors in engine and drivetrain design (customers
include Toyota, VW and others). Also, even companies that may use CATIA for
body design, use PTC’s PDM products, a PTC marketer was quick to add. It’s
the Medium AND the Message
Looking for Love in All the Wrong Places
Certainly saying “Hey, look at me, I’m easy to use” would be a start in
attracting customers shopping for their first MCAD software. The message
must be delivered at the right place and in the right way. PTC does have
impressive booths at trade shows but trade show audiences are just the tip
of the iceberg. Increasingly, decision makers with money are shying away
from national trade shows. The biggest CAD show, NDES, has downsized from
the Chicago’s cavernous McCormick Place to a smaller venue in nearby
Rosemont and is up for sale. Trade magazines get thinner every month or just
disappear. So how many see PTC’s two page color spreads? And for those that
do see the ads, how many get the message? Madison Avenue doesn’t necessarily
get CAD. Stylish, edgy ad campaigns that show neither the product nor its
use aren’t going to hit the mark with engineers. Also, PTC should wake up
and consider where MCAD shoppers have been getting the information they
need. Hint: where are you reading this? That’s right, the Internet. (The
author admits his company has a vested interest in online advertising)
Focus.. and Perspective
In the superheated market that PTC now finds itself, focus seems
critical. For an example PTC needs to look no further than SolidWorks. (Easy
enough, both are located in the Boston area). Launched in the mid-90s,
SolidWorks staked a claim to the midrange – the area they saw between higher
cost products like Pro/ENGINEER and low cost products like AutoCAD. Just like PTC,
it found gold and then set about happily mining it. It enjoyed unparalleled
success for years. Since its inception, SolidWorks has rounded out its
portfolio. Not only does it have over a thousand 3rd party vendors, but
through acquisition and development, it offers rendering, product data
management, analysis and more. But throughout it all, there is no doubt that
SolidWorks’ core product is its namesake. SolidWorks’ focus may have
expanded beyond its initial core design product, but to its credit, it has
Arbortext: Distraction or Diversification?
SolidWorks detractors may say that Cosmic Blobs-- a children’s modeling
software incubated at SolidWorks -- constitutes a diversion. But SolidWorks
is smart enough to keep it low profile. In fact, you’ll not find Blobs
listed among its products on the SolidWorks website.
Contrast that with the PTC’s home page. At the time of this writing, much
of it was taken up with Arbortext. What is Arbortext? It is text-publishing
software, like Framemaker. What is the connection? Jim Heppelmann, executive
VP at PTC, explained it very succinctly: “It’s like Pro/ENGINEER but instead
of creating assemblies out of parts, Arbortext creates documents out of
The Arbortext acquisition happened naturally enough. During a site visit
to a big customer (Solar Turbines, Inc. a Caterpillar company), Dick Harrison, CEO and president of PTC,
observed the customer’s difficulty in handling the huge task of assembling
the manuals that accompanied the company’s products. He noted that CAD data
(from Pro/ENGINEER) was “thrown over the wall” to the technical publication
department, who often redrew many of the illustrations. The sheer amount of
work—and rework--done by tech pubs had created a delay in the sales of the
product. Products were sitting and waiting to be shipped
because their manuals were not printed. This led to a visit to Arbortext
headquarters in Ann Arbor, Michigan. PTC ended up buying the company. It
paid a premium: $190 million for a $40 million company--4.75 times revenue
when 3 times revenue is a rule of thumb. PTC justified it because Arbortext
was growing 40-50% a year. CAD CEOs drool over growth like that because they
are used to single digit growth, if any.
Like the parent of a new child, Harrison happily discussed Arbortext and
how it will help PTC grow. And the fact that it ought to revamp and
streamline the whole process of throw-it-over-the-wall-to-the-techpubs-and-wait
process ought to make it an easy sell to all sizeable Pro/ENGINEER customers, most
of whom are probably experiencing the same frustration Caterpillar had. In
fact, many of the customers that were paraded before us at the press event
were not only aware of Arbortext but were considering it. On the other hand,
none have bought it yet and Framemaker is an established industry standard.
Lesson not Learned
Those who cannot remember the past are condemned to repeat it. --
poet philosopher George Santayana
PTC readily admits that there was a time it lost focus on its core
product. For years, it sought to distance itself from its core product,
Pro/ENGINEER. We’re a data management company, said previous CEO Steve
Walske when the company launched Windchill, their data management product.
After all, wasn’t CAD just data? Despite products like Pro/INTRALINK and
Windchill having now achieved some measure of success, the company’s
distinct shift in focus from its core – coupled with a loss of
perspective--did lead to several quarters of decline and loss of market
share in the MCAD market.
Now, as I listen to PTC people who claim its focus is back and locked on
MCAD, I see the unabashed emphasis on Arbortext.
Arbortext is not the only example. PTC also bought Polyplan. I looked in
vain to see what Polyplan was good for on the Polyplan website, but
descriptions were so vague I gave up. A PTC employee told me it was a
manufacturing process control program (like Tecnomatix). PTC had not yet
figured out what to do with Polyplan. It is not currently marketing or
The Billion Dollar Club
Dick Harrison should not be faulted for wanting to grow his company. That
is definitely in his job description as CEO. That Harrison appears happy is
also understandable. PTC is in the black. He also stands to make $4.8
million from salary, bonuses and stock. (see
PTC made $721 million last year. Not enough. Already Autodesk, Dassault
and UGS have claimed $1 billion dollar years. Harrison may have taken a page
out of Autodesk’s playbook—but is it the wrong page?
Cash-rich Autodesk has long sought to diversify and has acquired many
companies along the way. It has spent recent years seeking to downplay its
core product, AutoCAD. Carol Bartz, CEO of Autodesk, has been known to
befuddle her CAD users by showing them movies made with 3D Studio. It’s not
uncommon to find non-CAD products emblazoned across Autodesk’s home page,
too. Recently, it was King Kong, the movie.
Now that PTC appears to be back on solid ground, the challenges ahead
seem to be more marketing than technical. Pro/ENGINEER Wildfire 3.0 will
probably keep current PTC customers happy but the trick will be to get on
the short list of the millions of 2D users looking to upgrade to 3D. PTC’s
corporate mindset is geared to growth by acquisition but care must be taken
that the focus does not appear to wander from the core design software.
1. According to PTC, it is a potential of $4.8 million
which includes restricted stock over three years contingent upon
achievement of goals
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