PTC Inc - A Deep Dive (Part 2)
Product tour, AI strategy and financial considerations
Friends of NFTBC.
In Part I of the PTC deep dive we examined the company’s past, present and future. We also talked about PTC’s varied growth drivers and the durability thereof. Part I was intended to be a largely self-contained overview of the most notable considerations for investors weighing up PTC. But, as promised, there’s a second part.
First we’ll go on a whistle-stop tour of PTC’s most important products. Then we’ll have a look at PTC’s evolving strategy with AI. We’ll conclude by highlighting some of the financial considerations for understanding PTC and its growth drivers.
[NFTBC does not give advice - please do your own research. I currently own shares in PTC].
Products
Under Jim Heppelmann, PTC used to host an annual showcase conference for customers in Boston, called LiveWorx. As successor Neil Barua has decided not to continue LiveWorx, opting instead to make product demos more regionally/locally focussed rather than centralised at a large event that many cannot attend. I’m bringing this up because Heppelmann’s keynote at LiveWorx 2023 is recent enough still to be highly relevant and it was also a helpful overview of PTC’s main products, their capabilities and the digital thread strategy - if you’re investigating PTC and you’re new to the story it’s worth watching.
Rather than attempting painstaking technical detail about these various products, my ambition here is to try to point you in the right direction and provide you with relevant leads on the most important ones. In Part I, I outlined the case for durable long-term growth because I believe that the totality of the evidence supports it - here is the evidence. You’ll notice I have embedded quite a few videos in this post to add further context and complementary visualisation to the text - they are purely optional and to help you with your own investigations.
PLM / Windchill
Some years ago Autodesk’s CEO famously described product lifecycle management software as “a load of crap” and just a way for PTC, Dassault and Siemens to get more money from their customers. Boy, was he wrong - and he eventually changed his mind. But it’s notable that Autodesk isn’t a major PLM player today.
PLM software has three characteristics that make it compelling from the investor’s standpoint:
It’s incredibly sticky - customers are about as likely to replace their PLM system as they are their ERP
Having previously been largely confined to engineering departments, PLM is going forth into the wider enterprise - the market is less mature than CAD and growing faster (from “nice to have” to “must have”)
It’s very dull. Anecdotally, I rarely encounter investors talking about PLM, I assume because it’s not exactly exciting. I wonder if it’s slightly off the radar therefore.
