PTC is full speed ahead to the future of SaaS and this is very encouraging confirmation of the industry moving towards cloud SaaS offering and online business. I capture the following slide showing the growth of AWS (Amazon Web Services), the leading IaaS platform from the CIMdata cloud PLM webinar yesterday presented by CIMdata VP of Research Stan Przybylinski.
PLM vendors are actively moving in the SaaS direction. Some of the vendors are investing in re-architecture their solutions to support virtualization, micro-service architecture, and host their existing platforms using IaaS infrastructure. Others, like PTC, are actively acquiring companies and technologies. With the last acquisition of Arena Solutions, PTC already spent around $1.2B on SaaS technologies and companies.
I shared some initial information in my article PTC double down on PLM SaaS Acquisitions and today I want to share a few additional bits and pieces captured yesterday during PTC public investor communication call.
The following 3 slides can summarize the product taxonomy by PTC. It is combined from 3 levels – MCAD-PDM-PLM. Such a hierarchy is not new and exists in the industry for many years. It also delineates the strategy of separation between PDM (CAD file and document management) and CAD agnostic or xBOM (or Item) driven PLM models.
PTC is offering two versions of product portfolio – traditional (Creo+Windchill+Windchill) and SaaS (Onshape+Onshape+Arena)
Below is the only Arena Solutions marketing architecture slide I was able to capture. It is very high-level and doesn’t provide much information about the tech stack used by Arena. The latter will be important to understand how PTC is planning to integrate it into Onshape and PTC Atlas SaaS platform.
PTC Atlas slide was more informative and provided a collection of applications. The important data point is that PTC is positioning it to run on both AWS and Azure, which raises a question about the future of the Onshape tech stack and tools today only available via AWS public cloud.
The slides made me think about the overall PTC PLM Puzzle from the following standpoints – portfolio, tech stack, and customers. While marketing architecture is clear, the integration of various data management tools and technologies is a humongous task. The history of PDM/PLM integrations demonstrated mixed results and increased time the company spent on similar integrations. DS was doing such a thing for a decade building 3DX platforms and discontinuing some old PLM products. Arena Solution itself made an acquisition of Omnify software a few years ago – it is not clear how that tech stack will be integrated. However, the most interesting perspective is related to customers. The modern manufacturing growing demands in connected systems means OEM and different Tiers of suppliers must be connected and integrated. Larger manufacturing companies are working with smaller suppliers and contractors. How it will be segmented and supported by PTC traditional products combined with SaaS products is another interesting question. It might require the portfolio to be mixed. Last, but not least is tech stacks of SaaS products and their integration. I will need to talk about it as I will learn more.
What is my conclusion?
PTC SaaS strategy and commitment to spend resources is impressive and confirms significant industry opportunities in the future PLM SaaS business. Arena CEO, Craig Livingston mentioned the exceptional stickiness of SaaS products and adoption by customers, which is probably why PTC paid such a price for acquiring 1200 customers using Arena PLM. At the same time, PTC will face significant data platform integration challenges to bring the SaaS portfolio together, to combine technologies, products, and to create an integrated user experience. The last one is absolutely critical because it is key to SaaS product adoption. Just my thoughts…
Disclaimer: I’m co-founder and CEO of OpenBOM developing a digital network-based platform that manages product data and connects manufacturers and their supply chain networks. My opinion can be unintentionally biased.