Last year PTC was telling manufacturers to prepare for seven major external trends that are driving product development. This year, they are focused on the Internet of Things mega-trend to enable superior product development.
At his keynote at PTC Live in Boston, CEO Jim Heppelmann cited a prediction for 50 billion connected devices, roughly 6X as many as people on earth, by the year 2020. He also referenced a report by consultancy McKinsey that projected $62 Trillion of value by 2025 from the Internet of Things.
In response, PTC plans to be the technology company that best enables its customers to create this value through the development of “Smart Connected Products”.
In the old days, a product was just a product. It was mechanical and perhaps electrical, if it needed power.
Now electronics are used to make the product smarter as well, with logic and processing. By connecting the product to the Internet, companies can monitor the performance of their products in the field, allowing new business models based on delivering services and outcomes rather than physical products.
This strategic overview goes a long way towards explaining why PTC acquired Thingworx, an IoT platform development company.
Applications for Smart Connected Products
With smart connected products, Heppelmann sees 4 new main types of capabilities
1. Monitor remotely. Biotronik of Germany, for example, is monitoring pacemakers in humans. The pacemaker communicates with physicians about the condition of the device, and also about the patient’s heart. As a result of this platform shift, the company can offer home health monitoring rather than a physical product.
2. Control remotely. With physical products, you have to be with a device to control it. Now designers are controlling the physical operation of their products as well as the configuration. Heppelmann referenced the Doorbot as an example. The device allows users to remotely unlock their front door even when they are not physically present. More sophisticated applications would be for fleets of machines, like valves and pumps in offshore oil rigs or in underground mining equipment.
3. Optimize the product. With connected devices operators can, for example, remotely configure elevators to service certain blocks of floors based on traffic flows around events, enabling superior service.
4. Automate. Smart products can operate autonomously either alone or in coordination with each other. For example, the Bioswimmer from Boston Robotics is designed to mimic the shape and behaviour of a tuna to map out underwater terrain.
Trane, best known for their air conditioning systems, provides a good example of a company that is moving from a product to a services orientation. Dane Taival, VP Service said that Trane in North America is now “about 50/50 in revenue from product versus service.” More than revenue, Taival said that this product orientation is tying Trane more tightly to their customers over time.
When tied to a service strategy, remote diagnostics can enable repairs to complex machines in the field on the first visit rather than having a technician go on site to diagnose a reason for downtime.
Thingworx - A platform for product development for Internet of Things
PTC acquired Thingworx, a product development platform for Internet of Things connected devices at the end of 2013. Russ Fadel of Thingworx says, “manufacturing companies use Thingworx to manage the data from sensors and devices to optimize their factory operations.”
Thingworx also offers a platform that they claim speeds product development for those companies that have a disruptive industry innovation. For example, a rental car company using Thingworx can track and gather data from all their rental cars while they are in use. That allows them to tie driver behavior to a loyalty program to reduce wear and tear on their fleet.
A new direction for PTC
These acquisitions and customer examples provide a lot of insight into PTC’s plans for product development. It’s not all about the cloud, although cloud enables it. And data interchangeability from concept design through to field maintenance is part of the story too. The 30,000 foot view is that PTC plans to help their customers leverage the Internet of Things to create smart, connected products that can be maintained automatically in the field.
To get there, PTC will need to continue to acquire or develop more technology. I expect we will see more news from the company around:
- Analyzing the massive data streams from IoT communications (“Big Data”)
- Systems design (just announced acquisition of Atego)
- System simulation (TBD?)