A new model: PTC unveils new version of Wildfire; plans for CoCreate

Kevin Parker, Editorial Director -- Manufacturing Business Technology, 1/18/2008 12:05:00 PM

Some might find it ironic that PTC, the originator of parametric modeling, now has its own “explicit” modeler.
The new modeler comes with the $250-million acquisition of CoCreate that PTC announced in late November.  “PTC built the very first parametric modeler,” says James Heppelmann, PTC’s chief product officer. “CoCreate developed what is now the market's leading explicit or ‘dynamic’ modeler. PTC today has both, and is the industry’s leading innovator.”

The occasion for Heppelmann’s remarks was the introduction of Pro/ENGINEER Wildfire 4.0, the latest release of PTC’s flagship Pro/ENGINEER product design software suite.

The iDEN Mobile Devices Division of Motorola already uses Pro/ENGINEER for global product development. Increased productivity comes through efficient project management, collaboration, and control of design data. One new capability in Wildfire 4.0 of special interest to iDEN, says Todd Taneyhill, a CAD tools specialist, is “enhanced electrical and mechanical design collaboration,” which promotes a phenomenon known as mechatronics. 

Besides mechatronics, Wildfire 4.0 enhancements include improved digital rights management based on Adobe technology, tolerance analysis, and multi-CAD support.

Nils Wydler, CEO of NxRev, a PTC reseller, notes the changes many companies are going through. “Five years ago one midsize company we work with protected its intellectual property by having only a single Internet connection. Today they have a distributed environment and are sharing information globally. Digital rights management is going to be standard practice, and the proliferation of PTC Rights Management Adobe righths management technology is going to add fluidity to the product development process.”

Year in review
In its 2007 fiscal year, PTC had revenues of more than $940 million, sure to grow to more than $1 billion in 2008 based on the acquisition and organic growth. With reported 2007 Pro/ENGINEER revenues of $500 million, and $340 million for Windchill, its product life-cycle management solution, PTC says it is the market leader in the categories of MCAD and PLM.

“This is a good time at PTC,” says Heppelmann. “Our customers feel we’re back, with double-digit revenue growth the last three years and growing margin rates. This is an improvement from double-digit negatives as recently as 2003.” 

While 40 percent of its revenues are derived from the Americas, Europe is PTC’s fastest-growing region, although North America’s growth was much greater in 2006.

“Resellers generated 21 percent of our growth, and their businesses grew 14 percent,” says Heppelmann, “This is a fair indication of our midmarket growth, based on the very same product we sell at the high end.”
PTC also had strong growth in license sales, a leading indicator of future performance. Windchill had more than 20-percent growth, judged by PTC as being twice the rate of overall PLM market growth.

PTC’s long-term goal is $1.5 billion in revenue and 25-percent operating margins by 2010.  

“High-tech and electronics is turning out to be our sweetest spot,” says Heppelmann, “while with Windchill, we’re very strong in aerospace and defense industries.” 

Rationale for acquisition
“CoCreate customers now know their technology has found safe haven,” says Heppelmann,” and we’re committed to continuing this product line. These customers also now have available to them a PLM suite to wrap around that explicit modeling environment.”

When a company buys a 3D CAD tool, the most basic question is what type modeler to use. PTC says it can now rise above the resulting vendor war of words and recommend based on the merits of the case.

In this view, parametric modeling is most appropriate when product design resembles what is essentially a repeatable recipe. On the other hand, explicit modeling is more appropriate for something like one-off design. Expressed another way, parametric modeling works best when multiple variations of a product—such as cars or airplanes—are built on a single platform. Explicit is best for designing a cell-phone shell that may be fashionable for a limited time.

“The approaches have inherent trade-offs,” says Heppelmann. “Aerospace and automotive modeling will remain parametric. Family-based products will remain parametric. On the other hand, explicit modeling is fundamentally easier, at about one-third the work, because it doesn’t involve parameters and features. The ‘history’ doesn’t get in the way so it’s appropriate for engineering a brand new concept with little connection to previous approaches. It really is a matter of form versus function. A cell phone is just a form. Landing gear has a function.”  

Heppelmann prefers not to call the CoCreate approach “dynamic modeling” simply because that implies parametric modeling is “not dynamic,” nor is it appropriate, in his view, to contrast them as history- and non-history based. On the other hand, he says, “explicit” connotes you’re working right on the geometry.  

The CoCreate acquisition brings to PTC the following immediate benefits: 

• PTC growth rate increases 6 percent in first year;
• Profit margins increase 1 percent;
• Earnings per share increases 5 percent;
• Adds 5,700 active customers under active maintenance contract;
• Secures 80-percent market share in explicit modeling; and
• Presents a tremendous cross-sell opportunity.

“At $250 million it was a bargain,’ says Heppelmann. “We’ll keep all the products moving forward. It’s not a cost-cutting effort when you acquire a company that has 40-percent profit margins.”

The CoCreate acquisition also brings with it a 2D drafting solution. PTC has always been religious in its belief that 2D drawings should be derived from the 3D model that is the single source of truth, but now notes there are points “at the edge of the product development process” where native 2D documents are appropriate.
Finally, while there are no plans to combine the two 3D modelers into a single product, the company says there may be places where explicit modeling capabilities could be profitably embedded within a parametric system. 

What’s on Wildfire
Wildfire 4.0 is a major release of PTC’s integrated 3D CAD software. New modules address some of the most compelling issues in global product design:

• Demonstration of a new module for tolerance analysis, powered by CETOL technology, revealed an ingenious solution for application of design tolerances in the design environment.
• New and upgraded processors allow better leverage of design from other CAD systems—including a JT interface and the ability to publish Pro/ENGINEER data in 3D PDFs.
• For digital rights management, a new module making use of Adobe technology persistently and dynamically protects valuable intellectual property, enabling additional levels of security outside the firewall.
• An eCAD-mCAD collaboration extension accelerates electromechanical design with a new interface that automatically identifies incremental changes and cross-highlights between mechanical and electronic board designs. 

Says Motorola’s Taneyhill, “Visualization capabilities allow you to look at the electrical design alongside the mechanical design, significantly enhancing collaborative efforts.” 

Future systems evolution
Heppelmann says that fits in with PTC’s business strategy. “We’re not just a CAD company or a PLM company,” he says. “We’re ‘the product development company.’ Our PDS platform is a result of 20 years of technology development. We don’t have three or four parametric platforms. Our approach is more carefully thought out.”