Tuesday, September 9, 2008

CAD Obsolescence - Wither Pro/Engineer?

A nondescript Russian Genius created a monster in the mid '80s - shaking the Design World with a new Paradigm called Bi-Directional Parametricity. At a time when the CAD market was ruled by the likes of IBM and EDS, along came Samuel P. Geisberg - a mathematician - from Leningrad to the Great American Promised Land - to re-write the script and re-cast the deck with all Aces up his sleeve. Rest is history. Parametric Technology Corporation, known for its Pro/Engineer came, divided and conquered, much to the chagrin of prevailing well-established CAD Software houses.

Due credit should be given to PTC for creating a new market for a new technology - driven by the passion to perform or perish. Be it Technology - Created, derived or acquired, Sales, Marketing or sheer Grit, PTC had it all. It was a great American Dream of an Enterprise that started to conquer the mind and hearts of Engineers of all hues. Sure enough, there came a time when if you were not using Pro/Engineer you were perceived as a loser or a Not-Destined-to-Succeed type.

When Success gets to the head, it starts a downslide that only self-analysis can stop. PTC was no exception. The same innovation, that helped PTC scale great heights, proved to be its nemesis. With few innovations coming in, slower adoption of, by-now-ubiquitous, Microsoft Operating System coupled with easy-to-use functional modellers (read SolidWorks) breathing down the neck, PTC had already started to show signs of cracking.

Grapevine has it that, when PTC was downsizing to stay profitable, after the acquisition of Computer Vision, a Management representative was sent to CV's not-well-known Minnesota office to close it down. Flustered by an extremely warm reception accorded to him, he reviewed the work done and was taken aback by a new product that was under development. His initiative prevented the Division closure and, surreally, PTC's own. The product ? None other than Windchill.

A re-vamped user interface (relatively easy to use toolset - much to the chagrin of the Pro/Engineer loyalists), costly re-training efforts, stability issues, loss of focus, lack of innovation and loss of marketshare, lead PTC on a downward spiral, much to the frustration of its User community and fiercely passionate loyalists who would wage a World War III in its favour.

No company that does not listen to its Customers can survive. Not an unfamiliar adage? Still PTC chose to ignore them and with them their wads of Dollars that PTC just could not get. Is it a surprise that PTC was able to add only a fraction of new users Year-on-Year while contemporary CAD software corporations continued to grow with users at many orders of magnitude? Losing new orders, a shrinking client base due to attrition by vibrant new CAD products, and increased frustration amongst its own user community (who looked, with disdain, at PTC's stock getting flogged ) is perilous, however cash-rich a company may be.

Spending hard-earned dollars on acquisitions of Abortext (just because one of its large clients wanted a synergy between Pro/E and Abortext publishing), MathCAD, NC Graphics and, now, CoCreate, while losing focus on Mainstream product that took PTC to its dizzying heights added to the ills. Nevertheless, PTC was intent on playing its own requiem.

Now, PTC is up for sale, by its looking-to-cash-on-the-last-stop operatives. A relevant message for all CAD companies is apparently written on the wall.

Innovation, Improvisation, Hearing customers and Raising the Technology Bar are the Pre-requisites for any CAD Technology Company to survive and conquer. It is not the dollars in the bank that matters in the long run. It is the place in the broad hearts of the CAD users, aspiring to create new designs, that cements a permanent position. Money will come in with popularity and acceptance.

Alas PTC is scripting its own Swan's song for Pro/Engineer.... So long comrade ....


Anonymous said...

PTC Shopping for a Buyer

PTC has hired investment banking firm Goldman Sachs to seek potential buyers for the company. The stock closed today up 9% to 20.78, near its 52-week high of 21.54. The news was first reported today by the Financial Times, but then picked up by other business publications.

The higher stock price drives PTC market capitalization past the $2 billion mark. Published reports today suggest the asking price is $2 billion, but stockholders will likely want a premium above recent trading level.

PTC is coming off the second-best quarter in company history, and recently announced a blockbuster multi-year deal with EADS, the parent company of Airbus, that will over time become its largest single sale. The sale came after a long and rigorous benchmarking process that pitted PTC’s Windchill PLM software against rival products from Siemens PLM and Dassault Systemes. For details on EADS’ benchmark process, see the CADCAMNet article, “EADS Raises the Bar for PLM Benchmarking.”

In recent years PTC has been following a growth by acquisition strategy, picking up smaller technology firms with complimentary products, including Arbortext for product documentation, ITEDO for technical illustration, and CoCreate for its alternative 3D CAD software which uses an explicit approach as opposed to PTC’s Pro/ENGINEER, which pioneered parametric 3D modeling.

Nat said...

I do not find Pro/Engineer mentioned anywhere in your comments but for the last line wherein you have, probably, confirmed Pro/Engineer's obsolescence. PTC is know for Pro/Engineer. If all is well then why sell? Compare the stock performance of PTC vis-a-vis others such as DS and Autodesk and you will see the difference. Where should PTC have been and where is it today?

PTC is trying to sell off as a Windchill Company? Why? They have been talking about Selling for quite sometime now. Let us admit that they could have consolidated and grown in their primary business (CAD) had they focussed on REAL customer issues, innovation et al.