by James E. Heppelmann
[Reprinted from Seeking Alpha]
The Internet of Things is the #1 topic of interest right now in the field of information technology, and PTC has a legitimate opportunity not only to play in this market, but to emerge as a bona fide leader.
And it isn't just an interesting adjacent market for us. I truly believe it will redefine what CAD, PLM, ALM [application lifecycle development -- used to manage computer software], and SLM [service lifecycle management -- used to manage the delivery of services] are all about. At PTC, after spending more than two decades helping customers create physical products with CAD and PLM, over the last five years we've been helping our customers expand in the smart products with ALM and to optimize their aftersales service business with SLM.
The Internet of Things is really about connecting these smart products to the Internet to create feedback loops that inform
- The owner or operator
- The engineers who created the products
- The service department who need to keep them up and running,
- The sales and marketing department who want to optimize their relationship with the customer
I've invested a tremendous amount of personal energy into understanding this phenomenon, and long ago, I came to realize that the products our customers manufacture are the things on the Internet of Things and that our industry can't really do justice to the term "lifecycle management" of these things, without enabling and then leveraging these powerful feedback loops.
So the Internet of Things [IoT] is not just an interesting new business opportunity to pursue. It's also an opportunity to dramatically improve the capabilities, value proposition and differentiation of our CAD, PLM, ALM and SLM offerings.
Because we see so much opportunity to both upsell existing accounts and to penetrate new accounts, we're dedicating a segment of our sales force to pursuing new IoT opportunities in 2015. This sales segment will focus primarily on landing new logos [customers] with IoT outside our current customer base. As we land these new logos, we'll work to expand our position by introducing SLM, which is really the killer app for IoT, as well as ALM, PLM and even CAD technologies over time.
I can tell you that the ThingWorx and Axeda companies that we have acquired have both grown considerably versus their own year-ago comps [comparisons, financially], and we expect to build on this momentum at PTC. Between the various segments of the sales force (who are either lending or cross-selling IoT solutions), we expect that by the end of 2015 we'll have approximately 400 IoT accounts, which is roughly double the current level, and $40 million to $50 million of run rate IoT revenue. That will give PTC a strong claim to IoT's leadership.
Mr Heppelmann is chief executive officer and president of PTC.