One-to-One: PTC and Autodesk Strike with Acquisitions - Significant?

It was to hard to pick one company for my One-to-One today, but
I couldn’t get
the following thought out of my head. Is there
significance to the fact that both PTC and Autodesk made
acquisitions over the last week or so? I think the
answer is yes, so I’ll briefly touch on the acquisitions and talk
about what I think it means for the PLM market.

Just the Facts
Last week PTC
announced the acquisition of Synapsis, a
specialty software provider that offers regulatory
compliance solutions. Beth Stackpole wrote about the
acquisition in
PTC Targets Environmental Compliance with Synapsis Acquisition
which can provide a bit more detail on the acquisition. Please
don’t think less of me that I am quoting her because she quotes me
in her article, after all you have to have a bit of an ego to be an
analyst and a blogger right? I will discuss implications below (see
“Implications”).

This week Autodesk
announced the acquisition of ALGOR, a specialty
software provider (notice a trend?) that offers
advanced simulation solutions.I’ll point you toward Al Dean’s
comments in Autodesk to acquire
Algor on Develop3D for more, because I have been following him
on Twitter and he has some good commentary. Again, see my thoughts
on the implications below.

Implications?
What are the implications for
PTC and to Autodesk?

• Autodesk is filling out their “Digital Prototyping”
  vision. Adding Algor offers them some pretty interesting
  capabilities for simulating real-world events using multi-physics.
  This is similar to what Dassault acquired with Abaqus, which has
  helped Dassault
  with their strategy for realistic simulation. By adding in
  these specialized capabilities, Autodesk goes further in their own
  quest to help companies develop and simulate products virtually to
  get them right before ever committing to a physical prototype.

• PTC is taking the opportunity to replace (or extend)
  their own compliance solutions in Windchill with best of breed
  capabilities. PTC has clearly placed product compliance in
  their strategic sights for their “Product Development System”
  vision. The existing solution was a start, but did not provide the
  same depth of capability as the specialty solution. 

Significance?
First, let me say that I don’t
think that the timing of the two acquisitions is related, although
sometimes vendors like to counter-punch when a competitor makes a
market move. These acquisitions are not directly related, or at
least not in any way that I can see. To understand the significance
(and why I am writing about them together), let’s discuss the
motivations behind the acquisitions. These are not large,
financially motivated acquisitions. They are strategic acquisitions
that help bolster the product lines of each company. To
me, this is a sign that each of these companies is viewing
the economic downturn as an opportunity to improve their own
solution sets. As opposed to staying stagnant, they both
believe that the future for PLM (or in Autodesk’s case “digital
prototyping”) is worth investing in. I expect to see more of this
consolidation as specialty vendors start to get nervous about going
it alone in an uncertain economy, and larger vendors start to see
opportunity to make strategic moves while the market is in
transition. I almost said slowing down, but the performance in the
PLM sector seems to be pretty strong despite the economy, although
there is still uncertainty given weakness in the automotive and
other manufacturing sectors.

So what we are seeing is a couple of large suite
providers looking to further their strategies despite (or due to?)
uncertain times. I am seeing the same thing happening in
some of the manufacturers I talk to - taking the opportunity during
the lull to retool and get ready for the next round of battles in
the market. See PLM for
Struggling Economies and Struggling Industries for more on
that.

So that’s what I heard from PTC and Autodesk, with a bit of my
view on what it means. I hope you found it useful. What do you
think?