PTC recently announced its intent to acquire CoCreate Software — a $80M provider of explicit 3D modeling tools — for $250 million. CoCreate was started in HP to address 3D design requirements for high-tech electronic machinery — a legacy which endures with 83% of the company’s revenues coming from this same industry segment. PTC sees the buy as broadening its current portfolio of CAD modeling tools (e.g. Mathcad, ProEngineer, and Arbortext) and bolstering its position in the high-tech market, but is CoCreate really a complement to PTC’s products in a way that adds value to customers?
On the plus side, CoCreate’s philosophy and approach to design significantly differs from PTC’s other CAD offerings. Parametric feature-based tools like ProEngineer use change history and boundary expressions to define associations between the geometries — allowing a designer to, for example, automatically create new holes in a beam drawing as the beam dimension lengthens. By contrast, CoCreate is an explicit or ‘dynamic modeling’ design tool; instead of relying on modeling history, features can be built across models using copy + paste functions just as MS Office users use copy + paste to build snippets of text across Word, Powerpoint, and other MS applications. This kind of capability can be valuable for agile design processes that are highly-iterative and require a high frequency of changes across a number of designers without the traceability and control that are intrinsic of more-traditional design approaches.
On the down side, PTC may see further cannibalization of its ProEngineer licenses as CoCreate is integrated into the company’s Product Development Systems (PDS) platform and customers orient themselves with explicit modeling methods (CoCreate itself estimates 16% of its users switched from ProEngineer). Ultimately, however, customers will benefit from more design options and better integration of CoCreate design models with Windchill PLM processes. This enterprise-level value couldn’t have come sooner; PTC’s archrival Siemens UGS announced last week that they had supplanted CoCreate as the platform provider of CAD and PLM software at Canon. Now that CoCreate is part of PTC, the battle for these kinds of lucrative, global high-tech clients is sure to intensify.
-Roy Wildeman, Senior Analyst, Forrester Research