August 04, 2008
PTC Reports Q3 2008 Revenue Up 25%
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Jeff Rowe - Managing Editor

by Jeff Rowe - Contributing Editor
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During the third quarter PTC announced the following new products:
  • Windchill ProductPoint 1.0, a new “lighter” version of Windchill based on the Microsoft SharePoint platform. This product is targeted primarily for SMBs. It will also provide larger enterprises with a SharePoint strategy the ability to extend their product development system to broader user communities. ProductPoint will enable users to manage and share structured product content in multiple CAD formats and to present Windchill information to users in a SharePoint portal. ProductPoint is also integrated and will work with Windchill. According to the company, because Windchill ProductPoint does not overlap Pro/INTRALINK or Windchill PDMLink capabilities, PTC does not plan to develop
    migration tools or enable license transfers that would enable customers to switch to Windchill ProductPoint. ProductPoint is expected to be available sometime during Q4 2008.
  • The next version of Windchill, 9.1, is scheduled to be released by the end of 2008. In addition to usability improvements, this release will include incremental improvements to some of the new functionality in 9.0, such as MPM Link for integration with SAP and Oracle, as well as extended configuration management capabilities. Windchill 9.1 will also offer new capabilities enabling outsourced design to help coordinate with suppliers and partners.
  • ProductView 9.1 enables visual product interaction with 3D thumbnails, visualization of lightweight product viewables, and Web-based markup tools for redlining designs. According to Heppelmann, “During this past year, PTC has been working to consolidate its Division and InterComm products under the umbrella of ProductView, providing customers one complete platform for visual collaboration.” ProductView 9.1 is scheduled to be available in September 2008.
  • CoCreate 2008 was launched. Some of the major features include enhanced surface editing capabilities, more flexible work-in-process capture and faster cross-sectional modifications. PTC says it is pleased with its progress on integrating CoCreate into the mix and says it is on track to complete the organizational integration by the end of 2008. The company has also begun planning phase work to integrate CoCreate products with Windchill.

  • By lines of business, license revenues of $78 million were up 25% year over year. Every region except the Pacific Rim posted double-digit year-over-year license revenue growth. The strongest performance was in Japan, which was up over 200% year over year.

    Services revenues of $64 million were up 7% year over year. PTC had solid services revenue growth in all geographic regions except for North America, which saw a 10% year-over-year decline in services revenue, which the company believes reflects the economic environment in the region.

    Maintenance non-GAAP revenue of $131 million was up 27% year over year and 7% over Q2. Q3 was PTC’s biggest maintenance quarter ever. GAAP maintenance revenue was $130 million for Q3 2008. For the full year it is expecting better than 20% year-over-year growth. PTC expects to complete fiscal 2008 with more than $500 million in maintenance revenue.

    PTC continues to expand its reseller channel, with $70 million, or 26%, of total revenues coming from the channel in Q3. This is 48% year-over-year growth, and up 4% from Q2, reflecting both expansion from the CoCreate reseller channel and organic expansion. Year-over-year, channel revenue grew in all geographic regions: 125% in Japan, 70% in Europe, 11% in the Pacific Rim, and 1% in North America. Q3 Direct account revenue, including Strategic Account Management (SAM) accounts, grew 14% year over year, and was up 6% from Q2.

    Although various PTC executives have publicly said otherwise, I feel that PLM for SMBs takes a back seat. I say this because PTC’s Heppelmann has said that during the most recent fiscal year, 76% of the company’s sales were direct, whereas the remaining 24% went through the channel. PTC deals directly (sales and support) with companies that have sales greater than $700 million, and deals that are greater than $1 million for products and services. Anything smaller (SMBs) goes through the reseller channel. Although PTC keeps saying that it appeals to SMBs, most of PTCs message seems aimed toward big companies and their needs. While I’ll agree that there is a huge potential market
    for SMBs employing at least some level of data management, I don’t see PTC placing a huge amount of emphasis on PLM for SMBs.

    As for PTC’s outlook for Q4, the company is expecting non-GAAP revenue between $290 million and $300 million. It expects GAAP revenue to be between $289 million and $299 million.

    Although one quarter is only one quarter, PTC seems to feel good about its business. It did, in fact, have a strong quarter and a solid outlook, despite a soft economic environment in the U.S. and uncertainty about the strength of the global economy. Knowing that companies are continuing to globalize their engineering and manufacturing workforces and processes, PTC believes that the necessity of PLM applications is increasing, and PTC is positioning itself to capitalize on the opportunity. Will good fortune continue to shine on PTC? Ask us next quarter.

    The Week’s Top 5

    At MCADCafé we track many things, including the stories that have attracted the most interest from our subscribers. Below are the five news items that were the most viewed during last week.

    Corel Corp. unveiled
    Corel Designer Technical Suite X4 technical graphics software. Created specifically to address the technical illustration workflow, the suite enables users to create technical documentation, instructional manuals, maintenance references, and technical diagrams. Corel DESIGNER Technical Suite X4 provides file compatibility, including 3D design formats and AutoCAD DWG and DXF, with precise tools for illustration, bitmap-to-vector tracing, and professional photo editing. This comprehensive suite also offers an optimized workflow, multi-language support, and network deployment. The latest version of the suite includes Corel DESIGNER X4 for precise technical illustration and layout; CorelPHOTO-PAINT X4 for professional image editing; Corel PowerTRACE X4 to convert bitmaps and legacy paper documents into vector graphics; Right Hemisphere Deep Exploration 5.5 CSE to convert 3D CAD models into accurate 2D graphics; and Corel CAPTURE X4 to create screen captures, an integral component of many technical documents. Corel DESIGNER Technical Suite X4 also includes Microsoft Visual Basic for Applications 6.4; barcode and duplexing wizards, ANSI, DIN, ISO, engineering and architectural templates; and comprehensive symbol libraries containing over 4000 manufacturing, electrical, and architectural symbols. Suggested retail pricing for Corel DESIGNER Technical Suite X4 is
    $999 USD for full product and$499 USD for the upgrade. You can download a free multi-lingual (English, German and French) trial version from

    Siemens PLM Software announced that
    Version 4 of Teamcenter Express is shipping worldwide. Teamcenter Express is the collaborative product data management (cPDM) component of the Velocity Series. The latest release adds an embedded project management option and a new shop floor access client. Two new modules help SMBs streamline their engineering resources and widen access to their product data for project managers, lead engineers, and shop floor users. For project managers and lead engineers, Teamcenter Express Version 4 delivers an embedded project management option that is integrated with the existing standard document management, project-based security and workflow capabilities in Teamcenter Express. This module improves collaboration and control by managing the scheduling of multiple projects and their related tasks, together with resource allocation and the ability to import and export project plans to and from Microsoft Project. For shop floor users, Teamcenter Express Version 4 delivers a lower cost, optional web client. This streamlined Shop Floor Viewer is specifically targeted at shop floor use cases and delivers the access to product data that industry analysts estimate saves engineers 10-12 percent of their time. It includes engineering data searches, "where used" queries to determine product usage and viewing/printing. The comprehensive visualization capabilities include viewing a
    wide variety of 2D document file types and 3D models as well as the ability to measure and view cross-sections.

    Spatial Corp. announced availability of
    3D ACIS Modeler and
    3D InterOp Suite Release 19 (R19). The latest release of the geometric modeling kernel and multi-CAD interoperability components delivers key capabilities for developers bringing products to market across a wide range of industries using 3D applications. The release includes the first version of Spatial’s Product Documentation in wiki-format. Modeled on Wikipedia, Spatial’s fully accessible, on-line documentation puts new technical information at customers’ fingertips and provides an additional forum through which customers contribute ideas. R19 provides the foundation for the recently introduced industry-targeted components--EDA 3D
    Analysis Suite for accelerating development of 3D analysis tools in EDA applications and 3D Springback for the pressed metal tooling industry--and includes the following modeler advancements:

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    To read more news, click here.

    -- Jeff Rowe, Contributing Editor.


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