It has been more than a month since PTC acquired Onshape. Such a big event triggered many conversations about the future trajectory of CAD and PLM solutions as well as their ability to change the market status quo. Here is a PTC slide explaining the rationale behind the acquisition.
According to Tech-Clarity analyst Jim Brown – Onshape for PTC is more than CAD in the cloud. One of the strongest points of Onshape is multi-tenant platform and integrated CAD data management.
PTC’s announcement highlighted the target – small and medium-sized CAD customers in the announcement.
“Today, we see small and medium-sized CAD customers in the high-growth part of the CAD market shifting their interest toward SaaS delivery models, and we expect interest from larger customers to grow over time,” continued Heppelmann. “The acquisition of Onshape complements our on-premises business with the industry’s only proven, scalable pure SaaS platform, which we expect will open new CAD and PLM growth opportunities while positioning PTC to be the leader as the market transitions toward the SaaS model.”
WorldCAD Access blog article is highlighting that as it happened few times in the past disruptive technologies demonstrated their capabilities in the mid-size market first)
It’s happened time after time that disruptive new technologies gain traction first in the SMB [small- and medium-sized business] space, where customers generally have more flexibility to switch and then proceed up market over time. We expect that any SMB buyer who looks at Onshape will stop dead in their tracks due to its amazing capabilities, plus all the fundamental SaaS advantages it offers. I’m referring to cost of ownership, support for any type of client device, including phones and tablets, ease of getting started, collaboration that works like Google Docs, and plus no need for upgrade the patches, no file servers and software.
Engineering.com article about PTC’s Onshape Acquisition () is also speaking about the opportunity of mid-market.
New CAD system sales and business opportunities are mainly coming from mid-market environments, and PTC wants to have a larger slice of the mid-market pie. Can Onshape prove to be a catalyst in this context, as well as a way to expand PTC’s SaaS business?
Jim Heppelmann believes that “the SaaS model in the CAD and PLM markets will quickly evolve towards becoming the industry’s best practice in these and most other program domains.” He further points out that, “the SaaS model enables customers to work faster, improve collaboration and innovation, with lower costs and without an IT infrastructure to manage and maintain.” No one will dispute these conclusions. The question is rather how far into the future this massive transformation to the cloud will take place.
What customers are thinking? I found an interesting discussion and assessment of CAD system replacement shared by Moshe Baum. He is sharing the frustration about Solidworks – The CAD world after Solidworks and his opinion about are alternatives to replace Solidworks. His conclusion is quite brutal – don’t try to find a benchmarks, just try it.
If you’re evaluating new CAD package or OnShape in particular – don’t waste your time googling for benchmarks and user feedback. None of these apply to your context of needs. Try it out, go through the online tutorials, make a design that has enough of the typical workflows and features you expect to be using. Have at least 2-3 users participate simultaneously, and have at least some actual production parts that need to go through a release cycle. The next few years might show new unexpected movements in the CAD market. Choose your bet wisely
Will SaaS and cloud change CAD boundaries?
Onshape was introduced as CAD in the browser back 2012, but later it becomes clear that customers are not looking to “replace CAD”, but prefer to address a wider scope of problems starting from design data management and even more. The complexity of the existing solution today is much higher than it was back in 1995 when Solidworks disrupted the market. While Onshape was laser focusing on browser-based mechanical CAD and design data management, Autodesk is growing its Forge platform and Autodesk Fusion 360 to provide a comprehensive set of tools and functions. Both clearly targeting existing Solidworks market. At the same time, Solidworks is growing the 3DEXPERIENCE platform and making better integration of this platform into existing Solidworks tools.
Rightsizing of PLM
In the past PTC made several attempts to address the needs of mid-size businesses with different solutions. Product Point was one of them my hunch PTC learned few lessons from SharePoint and Product Point experience. Windchill PLM Essential is probably another one. Check my PLM wrongsizing and rightsizing debates article.
How SaaS can fit PLM mid-size business?
Who has the best understanding of the mid-size business? This is a question in my view, PTC should be asking these days. PTC acquired great assets and experience with Onshape technologies and the team. Does it mean SaaS will automatically make PTC solution mid-size friendly? I don’t think so. There are some interesting data points that PTC can capture from 5,000 Onshape customers. At the same time, Autodesk Fusion 360 growth is another example of interesting market development.
What is my conclusion? SaaS is the best foundation to fit mid-market needs. It is proven in other industries and it solves many problems existing PLM solutions have – the need to have substantial IT resources, lack of global access, the prohibitive cost, slow ROI. PTC has a good chance to win, but here is the thing… While Onshape can be a good foundation, the solution is not complete yet. PLM mid-size solution puzzle is a complex thing with a unique set of functions PTC has to figure out. This future solution will have to get traction and create a changing force in the market. To make it happen, PTC needs to immerse itself into problems of mid-size businesses to go beyond the existing PLM paradigm and to reshape the current manufacturing mid-size market status quo. Just my thoughts…
Disclaimer: I’m co-founder and CEO of OpenBOM developing cloud-based bill of materials and inventory management tool for manufacturing companies, hardware startups, and supply chain. My opinion can be unintentionally biased.