Spotlight

Design outsourcing spurs PTC’s growth

Product Lifecycle Management (PLM) is an essential component of manufacturing and PTC is among the leading suppliers of this software, says Vinutha V

Product Lifecycle Management (PLM) is a major competitive weapon in the arms chest of any global manufacturer. PLM can play a crucial role in integrating design and production systems. As Indian SMEs start to play a vital role in the outsourcing of global manufacturing, their principals abroad encourage them to adopt these solutions.

For Boston-based PTC, its Indian operation is the fourth largest followed by Japan, China and Korea. PTC provides software products for CAD, collaboration and data management. PTC India has carved a niche for itself in the CAD/CAM/CAE and PLM markets over the past decade. Since its inception in 1994, PTC India has acquired over 15,000 customers spread across large enterprises, MNCs and OEMs. Its Product Development System for new product development combines three flagship products namely Pro/ENGINEER Wildfire, Windchill ProjectLink and Windchill PDMLink. This system is being used in verticals such as heavy engineering, manufacturing and consumer goods. The company’s marquee customers include Tata Motors, Dana Corporation, Whirlpool, GE, TVS Suzuki, Lucas TVS and Eicher Motors. The company has been adding 250 customers every year. Kishore Rao, managing director of Parametric Technology Corporation (India) Pvt Ltd says, “PTC’s rapid growth can be imputed to the good quality of its products and customer support.” Although reaching out to OEMs was tough in the beginning, the tie-up with reseller partners such as Ingram Micro and Rolta helped PTC rope in a significant number of customers. 80 percent of the customers added every year are through the company’s channel partners.

Offshoring spurs growth

Going by the growing demand for PLM, Rao adds, “India is going to become an engineering design outsourcing hub and we feel that PLM solutions will play an important role [in this transformation].”

For the next two years, PTC’s blueprint envisions reaching out to customers with a strong focus on government and defence. The company achieved revenue growth of 30 percent in 2003 and it aims to maintain this 30 percent year-on-year growth rate for the next three years.

Windchill at the wheel

India is going to become an engineering design outsourcing hub and we feel that PLM solutions will play an important role [in this transformation]. Kishore Rao Managing Director PTC India

In the last three years, PTC has sold 1,800 licenses of Pro/ENGINEER and this product line has contributed 70 percent of its revenues during this period. Now, it believes that the time has come to focus upon the Windchill suite. Since the Windchill range of products goes beyond the creation of a product, the company sees considerable potential for it. Currently 30 percent of PTC India’s revenues are derived from Windchill. Indian customers who have deployed Windchill include Sona Steering Systems, Pricol, Lucas TVS, Audco, EMCO and Hi-Tech Gears. “As the PLM market has been gaining momentum, we expect sales of the Windchill product to grow quickly. In the next three years, our revenue realisation from Windchill will improve as we expect it to contribute 40 percent of our revenues,” says Rao. PTC believes that it needs to be strong in the SME segment, which can be easily achieved through its channel partners—the relationship with Ingram and Rolta will help PTC penetrate into deeper pockets and bring in more revenues.

PTC has been serving the defence sector for the last three years from which it gets 20 percent of its revenues. As defence labs such as BHEL and ISRO are focusing on designing satellites, warships and military aircraft, PTC aims to seize this opportunity and double the share of the defence sector in its earnings pie over the next three years.

Mass appeal through awareness

The next few years will be crucial for PTC and it has outlined marketing strategies to raise awareness about its products in the country. Although PLM is growing at 30 percent globally, awareness among Indian companies about the company and its product lines could be better. Hence, the company believes that there is a need to educate potential users of PLM solutions. “Large enterprises are apprehensive about implementing PLM as they have faced problems with ERP system deployments,” adds Rao. PTC India intends to raise awareness about PLM’s advantages while dispelling any issues that enterprise customers might have about the technology. It will hold road shows and campaigns across the country to this end. The company plans to showcase successful PLM implementations as references to prospective customers hoping to win deals in the process, something SAP has done successfully in the past.

PTC will also target educational institutions and it has tied up with 250 engineering colleges across the country under its University Plus program. PTC has donated PLM software for free in order to educate secondary school children under the ambit of its School Plus programme.

Pune R&D centre—the catalyst

PTC Worldwide acquired Computer Vision in 1998. Since then the latter’s Pune-based R&D centre has been engaged in all stages of product development including design, development, integration, technical writing and localisation to suit the Indian market. The largest facility outside the US, it has worked upon Pro/ENGINEER, Windchill, Pro/ INTRALINK, CADDS and Optegra. The centre also offers product support to customers across the world. The Indian R&D team has been working on newer versions of both Pro/ENGINEER and Windchill in collaboration with PTC’s US-based R&D centre. The company wants to launch Pro/ENGINEER 3.0 in June and Windchill 8.0 in December 2005. PTC has 530 people in India and it plans to augment its sales and support staff by 15 percent over the next three years.