We used to look forward to hearing the ceo of PTC slag his competitors during quarterly conference calls with financial analysts, but yesterday Richard Harrison disappointed us by making merely neutral comments against Autodesk and Dassault.
On the Dassault Deal
Ross MacMillan of Jefferies & Co asked, "Just any implications from Dassault's yesterday to kind of buy out their PLM sales force, any implications for Parametric?"
Mr Harrison replied: "I think we're going to learn more about that in the coming quarters. I think it's something ...that we sort of saw happening eventually.
"...a simple level it's going to level the playing field. And so SAP, Siemens, PTC, and Dassault will now compete on an equal playing field.
"I think Dassault had the advantage of IBM [as its sales force], which is a great partner. And they're no longer going to have that. It's going to make our job of talking about our benefits with customers easier when we don't have to overcome the presence of the IBM company and their footprints in all of these large accounts. So it's, I think it's positive news for the market."
On PTC Sales
"The channel business was challenging for us in the fourth quarter and it was probably down about 25% year-over-year. The channel business actually performed better than the direct business for the first half of the year, and then worse than the direct business in the second half of the year."
"The best performing business for PTC this year ...was SMB [small and medium business] and PLM [product lifecycle management]. ...Arbortext is probably our third largest product line behind Pro/ENGINEER and Windchill.
"So we've seen in channel what some of our competitors have seen there, maybe Autodesk would be a good example, which is the low-end MCAD business has been impacted relatively significantly by the macro-economic environment."
On Not Hiring Americans
"Head count will increase slightly. Not a lot, probably 2% to 3% over the course of the year. Most of that increase, if not all of it will be driven by continued shift to low cost geographies. PTC's head count today, 36% of the head count is in low cost geographies compared to about 20% two years ago."
On the Impending Recovery
"We would expect that that recovery would be in the second half of our next fiscal year."
PTC figures the recovering will come in waves, by world regions and by industries: "North America is starting out, China maybe is right behind there, in Europe and rest of Asia will probably follow."
On the Domino Theory
"And I think as investors, you are sometimes scratching your heads saying, 'I don't get it. Why are you so excited?' So let me first say, the number one reason fundamentally is because today's domino becomes tomorrows annuity.
"So, we are excited because it says that there is a big technology gap, that the gap is big enough that it's worth switching vendors and in most cases switching products. And it takes a big gap, because nobody likes to switch until -- or unless the gap is big enough that -- the system you thought was supposed to be helping you in our view is hurting you.
"The second thing, each domino win in turn influences so many other sales campaigns. I can't tell you how many deals entered our pipeline on the back of the ABS wins. Everybody said, 'If PTC can win, in that fairly hardcore environment, European company, co-ownership with the Dassault family, all that stuff. Then PTC must have something special, I better take a look at it.'"
On Wondering Where the Lions Are
James [Jim] Heppelmann: Neil, you just want to add to that?
Cornelius [Neil] Moses III: I couldn't have said it better myself, Jim.
James Heppelmann: Good.
Cornelius Moses III: Where are you Jim?
James Heppelmann: I am in Europe
Operator: Your next question comes from Steve [inaudible].
James Heppelmann: I am with an important European customer, Dick [Harris].
- - -
You can read the entire transcript at http://seekingalpha.com/article/169498-parametric-technology-corporation-q4-results-call-transcript
On the Dassault Deal
Ross MacMillan of Jefferies & Co asked, "Just any implications from Dassault's yesterday to kind of buy out their PLM sales force, any implications for Parametric?"
Mr Harrison replied: "I think we're going to learn more about that in the coming quarters. I think it's something ...that we sort of saw happening eventually.
"...a simple level it's going to level the playing field. And so SAP, Siemens, PTC, and Dassault will now compete on an equal playing field.
"I think Dassault had the advantage of IBM [as its sales force], which is a great partner. And they're no longer going to have that. It's going to make our job of talking about our benefits with customers easier when we don't have to overcome the presence of the IBM company and their footprints in all of these large accounts. So it's, I think it's positive news for the market."
On PTC Sales
"The channel business was challenging for us in the fourth quarter and it was probably down about 25% year-over-year. The channel business actually performed better than the direct business for the first half of the year, and then worse than the direct business in the second half of the year."
"The best performing business for PTC this year ...was SMB [small and medium business] and PLM [product lifecycle management]. ...Arbortext is probably our third largest product line behind Pro/ENGINEER and Windchill.
"So we've seen in channel what some of our competitors have seen there, maybe Autodesk would be a good example, which is the low-end MCAD business has been impacted relatively significantly by the macro-economic environment."
On Not Hiring Americans
"Head count will increase slightly. Not a lot, probably 2% to 3% over the course of the year. Most of that increase, if not all of it will be driven by continued shift to low cost geographies. PTC's head count today, 36% of the head count is in low cost geographies compared to about 20% two years ago."
On the Impending Recovery
"We would expect that that recovery would be in the second half of our next fiscal year."
PTC figures the recovering will come in waves, by world regions and by industries: "North America is starting out, China maybe is right behind there, in Europe and rest of Asia will probably follow."
On the Domino Theory
"And I think as investors, you are sometimes scratching your heads saying, 'I don't get it. Why are you so excited?' So let me first say, the number one reason fundamentally is because today's domino becomes tomorrows annuity.
"So, we are excited because it says that there is a big technology gap, that the gap is big enough that it's worth switching vendors and in most cases switching products. And it takes a big gap, because nobody likes to switch until -- or unless the gap is big enough that -- the system you thought was supposed to be helping you in our view is hurting you.
"The second thing, each domino win in turn influences so many other sales campaigns. I can't tell you how many deals entered our pipeline on the back of the ABS wins. Everybody said, 'If PTC can win, in that fairly hardcore environment, European company, co-ownership with the Dassault family, all that stuff. Then PTC must have something special, I better take a look at it.'"
On Wondering Where the Lions Are
James [Jim] Heppelmann: Neil, you just want to add to that?
Cornelius [Neil] Moses III: I couldn't have said it better myself, Jim.
James Heppelmann: Good.
Cornelius Moses III: Where are you Jim?
James Heppelmann: I am in Europe
Operator: Your next question comes from Steve [inaudible].
James Heppelmann: I am with an important European customer, Dick [Harris].
- - -
You can read the entire transcript at http://seekingalpha.com/article/169498-parametric-technology-corporation-q4-results-call-transcript
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