Here's to the future! PTC CEO Jim Heppelmann on the changing PLM market and where the $1.46 billion ServiceMax takeover fits in

Early last month, PTC competed its $1.46 billion acquisition of Field Service Management (FSM) giant ServiceMax. At the time the deal was announced last November, the stated intent behind the takeover was to bolster PTC’s closed loop Product Lifecycle Management (PTC) offerings by extending the digital thread of product information into downstream Enterprise Asset Management (EAM) and FSM capabilities. More information would follow, it was promised.

Yesterday additional insight into the strategic direction ahead came from PTC CEO Jim Heppelmann as the firm announced its latest quarterly earnings. PTC is about the interplay of physical and digital, he said, with the latter being centered on when products are under development and exist in a purely digital form, authored in PTC’s Creo and managed in its Windchill offering: 

Being purely digital at this stage products are easy to change and highly configurable. Each time our customers get an order, their factories take a configuration of the digital product data that matches the order and use it as the recipe to produce the physical product, which is then delivered to the end customer.

Physical products are very different. If you want to change them, for example, you need to dispatch a truck to the customer site, carrying a technician and spare parts. Spare parts are managed in our Servigistics software. The technician will need access to similar types of digital product information, as what the factory used when creating the product. This service information is created using Arbortext and Vuforia.

PLM is moving from being a nice-to-have to a need-to-have, he argued, citing the use case of model-based enterprises where users are going to interact with 3D models: 

3D models are too big to e-mail around. When you're interacting with a 3D design, it's not one file - it can be dozens, hundreds or thousands of files, and you need a system to find them all and fit them together and present it to you so that you can understand what's going on.

What's happening [in] all forms of digital transformation is that companies are saying, ‘We're going to get rid of paper drawings and PDF files. We're going to go to 3D.’ Therefore, everybody in the company who interacts with product data is going to need a PLM seat and they're going to need some type of a 3D seat. It might be a viewer, it might be CAD, whatever. But it's driving proliferation of PLM out from the engineering department, where it's always been, into purchasing into manufacturing, now into the service technicians.

We pretty quickly envision service technicians out in the field on their phone, interacting with 3D models when they're standing in front of a piece of equipment, if not augmenting it right onto the piece of equipment.

Synergy 

And this is where ServiceMax comes into play. Heppelmann explained: 

High-value products are operated by the customer for years or even decades. These products require regular service to keep them up and running, and this service is typically provided by the manufacturer, who views the recurring service contracts and spare part sales as a highly desirable source of revenue and profit.

ServiceMax helps the manufacturer manage their entire installed base of physical product instances and orchestrates all the necessary service activities. By monitoring the installed base of products, ThingWorx adds a lot of value to ServiceMax, because it allows service to be more proactive and preventative in nature. Sometimes the service can even be done remotely thereby canceling the need for a truck roll.

ServiceMax has great synergy with Creo and Windchill, he argued: 

On the one hand, the service process consumes the digital product data created in engineering, in the form of parts catalogs and service instructions. And on the other hand, the service process is the primary source of feedback that drives ongoing product improvements through engineering change orders or ECOs.

Windchill serves as the system of record for the digital definition of all possible product configurations, and ServiceMax serves as the system of record for the actual physical instances of products that exist, each of which may have a slightly different configuration…There is a digital thread of product information flowing between these key systems in both directions throughout the product life cycle. 

Aligning ServiceMax with PTC's various offerings will lubricate this flow of data creating tremendous business value. No competitor has a solution comparable to this. Equally important, as the service system of record, ServiceMax knits together our existing SLM products, allowing PTC to now offer the industry's first truly comprehensive offering for service management optimization.

Think of it as a hub-and-spoke model with ServiceMax as the hub and PTC’s other service offerings as spokes, he added: 

For example, ThingWorx IoT connects to and monitors the vital signs of installed products to enable preventative remote service. Arbortext dynamically publishes technical service information to match each product configuration in the installed base. Vuforia AR enables this technical service information to be augmented onto each installed product to make service technicians more productive. And Servigistics allows customer service level agreements to be met, while carrying the smallest possible inventory of spare parts.

With the acquisition now closed work is underway on deeper integration between ServiceMax and these various PTC offering. There will be more detail to come at PTC’s LiveWorx event in May, but customers are already contacting both firms to find out more. According to Heppelmann: 

We had a thesis of what this was going to mean. We've gotten into it. We found how many customers had independently purchased software from both of us, but also how many customers ServiceMax has that looked like PTC customers and how many customers PTC have that look like they should be ServiceMax customers. And a lot of common customers immediately contacted me, immediately contacted [ServiceMax CEO] Neil [Barua] and said, ‘Hey can we get together? Can you fly out and see us? Can we come visit you? We want to hear this story.’ To be honest, we're pushing back a little bit on them saying, 'Could you just give us a little bit of time to figure out the details?’ So we're really targeting that for LiveWorx.

My take

The future starts here. Look out for an exclusive interview with Neil Barua in the coming weeks.