PTC Acquires CoCreate

PTC plans on buying CoCreate for US$250 million from HBK Investments of Dallas TX. Overpriced? Perhaps. But here's the fallout:

-- non-history-based 3D MCAD modeling is now for real.
-- expect Dassault and Autodesk to make reactionary acquisitions.
-- SpaceClaim would be cheap, probably pick it up for under $25 million, the kind of price tag Carl Bass likes.

Update

Just as editor Martyn Day notes that PTC can no longer claim to have the only unified CAD solution that scales from desktop to enterprise, the company provides this spin:

PTC recognizes that there is a broad range of accepted modeling approaches in the industry. By adding CoCreate solutions to its product portfolio, PTC will become the first and only vendor in the market to offer a full complement of design solutions.

Update 2

The price seems to in line. During PTC's conference call, the CFO reported that:

CoCreate's annual revenue of approximately $80 million.

This means PTC paid about 3.1x earnings, which is about right. PTC will pay with $50 million of its cash reserve, and then borrow $210 million to pay for the remainder

Comments

[Deelip Menezes]

Now this is getting very interesting.

[Matthew Palicki]

Wondering aloud; Will PTC re-brand the newly acquired offerings as "Pro/Create"?

[Jon Banquer]

How soon before users start demanding one product that does history based and non-history based modeling? I fail to see why a user can't and shouldn't have both.

Jon Banquer
San Diego, CA

Autodesk have been caught napping having squandered a huge opportunity and market advantage. In the MCAD market Inventor was, and is a product, that was borne of the chase instead of reality. Inventor took many backwards and has still failed to realize what was promised, a fact many those of us using Mechanical Desktop have known for a long time. Using MDT a user has at the fingertips - in one package - many different options being able to use 2D and 3D in many different combinations.

The only people who failed to see this and the full potential of the AutoCAD/MDT combination were Autodesk, its dealers and their protagonist. As a result many customers have missed out on a great opportunity and having followed blindly the Inventor mob have gone in a wrong and costly direction.

The irony is Autodesk still have the tools, the products and the market position to correct the error; but do they have the intelligence and the ability to look at why they are now in this position or will they just hold their ground for fear customers will now also realise how they have been hoodwinked and retaliate?

Now might be a good time to rename Mechanical Desktop to AutoCAD, restart development, and allow customers to choose how they want to work and apply CAD software and; at the same time take this opportunity to get OFF the incessant and unnecessary push to 3D. Customers know what is most profitable - for them - an ability few CAD software developers have demonstrated they have, choosing instead to look at their interests in the isolation.

R.Paul Waddington - cadWest

[Calvin Stigler]

AutoCAD does both history and non history based modeling(SOLIDHIST variable), though of course it's not as powerful as the "big" systems, especially on the "history-based" side.

[Calvin Stigler]

Also, I don't think renaming MDT as AutoCAD makes sense. AutoCAD could still use some 3D strengthening to be sure, but MDT is overkill for a lot of situations. It would, however, make sense to at least admit that MDT exists, maybe even give it some attention. I suppose Adesk doesn't like to acknowledge MDT (or even 3D Acad) for fear of stealing from Inventor, but the reality is that there are many valid ways to work in 3D. Seems PTC understands that...

[David Pulgar]

Jon, you're right. When two different schools of thought come to be, (in this case parametric and history-free dynamic modeling) it’s only natural some middle ground must exist. Companies like PTC and CoCreate are finally realizing that neither modeling methodology (parametric or dynamic) may satisfy all of a user’s needs. An ideal system would make use of features from both parametric and dynamic modeling systems.

However, a program that bridges the gap between parametric and dynamic modeling already exists. It’s called IRONCAD. To learn more about it, go to www.ironcad.com.

[Jon Banquer]

David, If you really think I'm right then open up IronCAD's web forums so anyone can post to them. Get someone to build a CAM system inside of IronCAD. Stop being so afraid of SolidWorks Corp. and go head to head with then. I have no respect for companies that shy away from direct competition. IronCAD V10 sounds like it's going to be just awesome to me! You have better file management than SolidWorks does, you have that awesome Tri-ball thingy that no one else has, you have a free download of IronCAD, IronCAD seems to be very well documented, you have an independent book out for IronCAD. What you don't have is decent marketing and a CAM system running inside of IronCAD. Better surfacing for IronCAD would also help but it's not the most critical thing right now. Do you have any idea how bad the CAD is in systems like Gibbscam, Surfcam, DP Esprit, Mastercam, etc. is? No one wants to use these products to draw with! Their graphics and their solid modeling are just horrible and then you have the file transfer headaches from not running an integrated CADCAM system. You have the opportunity to make IronCAD into the next generation of CADCAM system like HSMWorks is doing for SolidWorks right now.

Jon Banquer
San Diego, CA

Deelip - this does have a chance to get interesting. My bet, though, is that it will end up being rather boring.

[John]

Not all that surprising of an acquisition in that CoCreate has been shopped in the market for well over a year now, probably closer to two. I'm sure ADSK had their reasons for passing on this acq (as well as others). See PTC's move more as an act of desperation than anything else.

What is of interest, that others have commented on, is the acquirer. Now PTC wil have to go back to the drawing boards and re-define their core messaging to the market as this acq certainly throws out their previous message.

[Alberto]

Well, in my opinion it is not a matter of having history/non history based product. From the user standpoint, it is a matter of being able to use parameters to make modifications and families, and/or being able to make modifications without worrying about the parameterization. thinkID (think3) is able to do that. Parameterization, and direct modeling commands like GSM and tweaking. And they do not destroy the parameterization! It's so simple...

Alberto Savelli
Bologna, Italy