PTC’s strategy changed with its Onshape acquisition, from a focus on desktop-based products to cloud-based ones, or SaaS (software as a service). The company’s chief strategy officer was to change a year and a half later when Catherine Kniker took over the role vacated by Kathleen Mitford.
CEO Jim Heppelmann thanked departing Mitford for her years of service at PTC and genuinely wished her luck at Microsoft, where she could prove to be a valuable ally. Microsoft recently recognized PTC as its partner of the year.
Wanting to keep up with PTC’s strategy, which can’t help but shift with the major acquisition, and to hear a wee bit of the Irish brogue from her native land, we Zoom in on Ms. Kniker and find her in the company’s Boston Seaport headquarters.
“It’s pronounced Kay-nikker, with a hard K,” said Kniker patiently. And as to why her accent doesn’t sound Irish enough, she laughs. “I came to America in the ’90s.”
Long enough for Kniker to bury herself in technology. After receiving a degree in computer systems from the University of Limerick, Ireland, Kniker spent stints at Constant Contact (email marketing) and other tech firms mostly in the Boston area before joining PTC in 2016 as the chief revenue officer of its AR and IoT division. She moved to handling PTC’s varied partnerships, including Ansys, Rockwell Automation and Microsoft, and headed the acquisition of Arena Solutions.
In her current role, Kniker reports to CEO Heppelmann and leads corporate strategy, corporate marketing team and mergers and acquisitions.
PTC headquarters are in Boston’s Seaport District, after the company moved out of its suburban HQ in Waltham in 2019, the year before the pandemic hit. Kniker is on the 16th floor with PTC’s other top executives, including Heppelmann.
Are people coming back to work at PTC headquarters?
I’ve noticed a change over the last month. They’re starting to come back. Some spend one or two days in the office, the rest of the time at home.
Tell our readers a little about yourself.
I was born in Ireland, so, this is an immigrant story. I have an undergraduate degree in computer science and started professional life as a software engineer. I moved to the U.S. for love. My first job was with DEC [Digital Equipment Corporation], a Massachusetts-centered company, even though it was global. I moved to the U.S. permanently in the ’90s. I live in Acton [west of Boston] with my husband and have four kids—one in college and three teenagers: 16, 17 and 19. You might say I have a very rich life.
That’s quite a commute, then?
We were just chatting about that. The traffic hasn't gotten back to normal, so it’s about a 40- to 45-minute commute. But you know how it is—calls on the way in and the way out.
The pandemic has changed how we work. How has the pandemic factored into the success of SaaS?
Before the pandemic, Jim [Heppelmann] was out in front selling SaaS to the engineering world. We’ve been leading; the industry as a whole has been a late adopter. We saw it as the wave of the future. Then the pandemic hit. And it was like, “Oh, my goodness, all these engineers need to be able to work.” People needed to get knowledge to those trying to service equipment, etc. The industry as a whole seemed to accelerate the transition to SaaS—probably by years, not by small increments. The nature of the discussion changed. Every CXO was talking about the future of work and remote work everywhere. How do they advance and keep product development schedules on track in this new world of the pandemic? Even in manufacturing, we saw some changes. We have a remote assist feature in Vuforia. The pandemic was a lightning rod for AR [augmented reality]. It was how to get knowledge to frontline workers. When half the staff can’t be there … that was a big trigger in a positive way. I think it’s a change that will not reverse. The world has seen what can be done and that has made SaaS even more of an imperative.
What is your role as chief strategy officer? Are you in charge of executing your CEO’s strategy, or do you come up with strategy of your own?
I’ve done extensive consulting with companies and advising companies on strategy, whether it’s company strategy or product strategy and implementation. Jim has a very winning vision for the company and we’re constantly evolving that strategy to make sure that PTC enables industrial companies to improve growth and profitability by providing an innovative suite of digital offerings. The important thing is they’re innovative and another is that they work together across the three focus areas. I don’t think the focus areas will change very much under my leadership, but on strategy, we’re focused on how products are engineered, manufactured and serviced. And what we can do to improve industrial companies’ growth and profitability and in those areas. There’s a couple of components to it, but this is the strategy at the heart: Who are we, what markets do we serve? We aspire to win where we play. How will we win? What capabilities must we have? Where will we play? We’re in the value chain, manufacturing, engineering and service. What industry verticals? What geographies? What is the customer segmentation? What is the product segmentation? That’s the strategy part of the role. I also am responsible for our M&A [mergers and acquisitions] strategy and execution. That’s been a core part and I have been doing that for the last year or more. Lastly, there’s corporate marketing, the PTC brand, our thought leadership and our image as a company—which includes the Customer Experience Center—all of those things, so that’s the new job.
What is the Customer Experience Center?
On our 17th floor, we have exhibits of projects PTC products have been used on. We’ve done a lot with it and are continuing to do a lot more, letting customers see us virtually.
How does a business background help you in a company that is all about technology and engineering software?
I’m very, very comfortable in the strategy setting. Understanding markets. Understanding dynamics, like how to play to win. What is exceptionally good at PTC is the rich heritage in technology—we have some of the best technology around. We are wrapping that with a business context and how we play to win by delivering key customer needs and focusing on value per customer.
What was your first job in technology?
My first job was with DEC as a system dump analyzer for the VMS [operating system]. When a VAX crashed, I needed to find out why it crashed using the error codes—how long was the crash? etc.
We reminisce. [The author’s first engineering position was using an application on a VAX.] What brought you to PTC?
I came to PTC because of IoT and AR almost five years ago. PTC had made a series of acquisitions. We needed to integrate them and tell a cohesive story of their value to customers. My initial role was in sales and marketing for that purpose. Initial bookings for IoT and AR were less than 10 percent of our overall bookings. About two years later, bookings jumped to over 25 percent of overall bookings. One of the key cornerstones of my approach was to leverage partners. I strongly believed in an ecosystem play. During that time, we forged a big partnership with Microsoft. We did the partnership with Rockwell. Jim then asked me to “double down on the strategic partners”—those global systems integrators, the ones with the long tail of technology. I’ve done that. I’m not talking our reseller channel business. That’s about 30-plus percent of our business and growing. I’m talking about co-selling with Microsoft and Rockwell and the big systems integrators.
We have tried to institutionalize partnerships at PTC so when we go see a customer, we don’t go alone. When a customer is doing a digital transformation, they can be best helped by a lot of partners. We’ve done a lot as a corporation to make that work in the field.
How is your success measured?
A few different ways. Certainly by impact on the business with bookings. We are definitely measuring ARR [adjusted run rate]. Those are just two of the metrics. Over time, they have an impact on things like NPS [net promoter score] because if you show up with a customer, it’s a much better experience than if you are putting a solution together for the first time in front of the potential customer. Another measure is the number of awards we’ve received. We have received Microsoft’s Partner of the Year Award. We were their Manufacturing Partner of the Year two years in a row. Also, we measure the size of practices that the various global systems integrators are developing on PTC products—and those are growing. Over time, we’ll have more and more partner-developed solutions as extensions of what we offer.
How do you measure success for Onshape?
I’m not sure that we reveal our trade numbers publicly, but I’ll tell you that Onshape is growing—high double-digit growth. I’m talking 50, 60 percent plus. It is executing and executing very well. We’re really happy with Onshape. There were two reasons we bought Onshape. One was for Onshape the product. It was SaaS native. Second, we bought it for the underlying technology which we have rebranded as Atlas. We’re making that our industrial SaaS platform on which all our other SAS offerings will ride. We’re giving proof points with generative design and Vuforia, both replatformed recently. We’re getting great reuse out of identity management and common services. It makes a story to the customer over time, which will become even more cohesive because we’re building on a common SAS infrastructure. That alone gives us a lot of runway. Onshape is performing very well and meeting our expectations from an M&A perspective.
Is it safe to say that Atlas is the platform of the future? Or will Atlas coexist with the desktop applications? Are there parallel paths or are they converging?
I would say there are two converging paths. Jim has talked publicly about refactoring Creo and Windchill. To make them SaaS … that will happen over time. It’s a journey. It doesn’t happen overnight. Access is at the core of that strategy. So, we will only have one platform with more feature-rich enterprise-ready applications, like Creo and Windchill. Then we will be serving the other huge piece of the market that's opened up with SaaS, the small and mid-market. Then there’s departmental uses for collaboration and some of the features from Onshape that we see in some of our enterprise accounts. But, yes, Atlas will be the converged platform.
What was your role in the Onshape and Arena acquisitions?
We did the Onshape acquisition in October of 2019, and I took over M&A this last January. I’ve been intimately involved with it since. We bought a massive amount of technology. It was more than anyone imagined. I was at the head of the pack when we added Arena Solutions. As a SaaS application, it will migrate to Atlas and leverage features over time, offering great growth and be targeted at a market that we were not really playing in with Windchill in terms of the segments and size.
Looking down the road, what will happen to parallel products? PTC now has two design products, Creo and Onshape, and two PLM products, Windchill and Arena? Will they merge?
I think there will be a customer segmentation. Each product plays in very different segments of the market and there’s big parts of the market that we never really played in. I certainly believe that SaaS opens up those markets like never before. It also opens up suppliers and facilitates collaboration, giving many access to design data. It’s so much easier in an Onshape world than it could be in a desktop world. Our products, Creo and Windchill, are very feature-rich products. But you don’t always need all that. All of the features may be needed in an enterprise or on a very complicated design. I think there will be a segmentation that will provide the right tool to the customer—whatever their need. We see that some of these will coexist and work side by side or together. I’m very bullish in terms of the future of our enterprise products. Our growth rates in PLM are outsized relative to the market worldwide. If you are a PTC customer, you know you’ll be along in this journey and you will be able to select the right tools for the job.
How would you address a Creo or Windchill user who might feel as if all the attention to SaaS leaves little attention to their products?
We got out ahead of that because we knew that was going to be a question. What we ship does not mean there’s no future for Creo and Windchill. Nothing could be further from the truth. We’re going to bring these products into the future—the SaaS future. By the way, it won’t be one big bang, where you wait for years and the magic happens. We are doing it over time. Generative design is a great example: making cloud native services available to the desktop or the on-premise community. You will see features being rolled out every year that will show our customers that we are not only investing in their products but that we are delivering. We’re not hearing that worry from the customers we talk to. They’re intrigued by some of the new offerings. We’re hearing how they want to leverage Onshape or Arena in our customer base. That worry that we are no longer committed—that’s just not happening. We’ve been very vocal about our commitment.
You now work with Jim Heppelmann and Jon Hirschtick, both icons of the industry. Can you compare and contrast them?
Quite honestly, both are visionaries in their space. It’s great to see them together. They totally geek out on technology. They’re both about customers. They’ve been around so many customers that they know what the customers need. Our conversations are terrific—so customer centric. There’s a mutual admiration between both of them. You can’t help but look at their careers and not admire them. PTC, as a company, has done a really nice job evolving and creating a culture that helps integrate companies, especially smaller companies. We’re clear on our values. And both Jim and Jon make a big impression from a values perspective. Personally, I love working with both and am quite inspired by their accomplishments.
As long-time industry observers, we share your admiration. Great meeting you, Catherine, and thank you for letting us introduce you to our readers.
God bless you, Roopinder. Thank you for your time and your coverage of us.