I had a chance to speak with Jim Heppelmann, CEO of PTC (NASDQ: PTC), on the last snowy day of January 2019, about how his company is bringing AR and IoT technology solutions to thousands of enterprises around the world. Not many people realize there’s a company with a ten billion dollar market cap, six thousand employees in thirty countries talking to thousands of companies in diverse verticals about how they can use AR in their business process and industrial settings to increase efficiency and accuracy.
Heppelmann joined PTC in 1998 when the Minnesota-based company of which he was co-founder and CTO, Windchill Technology, was acquired by PTC. Windchill is a PLM (Product Lifecycle Management) system now used by companies like John Deere to manage a product’s digital life, which starts with the very first design spec and travels with the product through its retirement.
From 2001 to 2009, Heppelmann served as PTC’s chief technology officer, driving the company’s product vision and strategy. He moved into the CEO role in 2010. Heppelmann gradually took PTC from a CAD (Computer Aided Design) and PLM company into the leading provider of industrial AR solutions. One of the first steps in this transformation was the 2013 acquisition of ThingWorx. ThingWorx is a platform for managing the Internet of Things (IoT), which is comprised of remote sensors found in everything today from consumer products like i-watches, and bio-monitoring wearables, to large-scale industrial equipment, and even self-driving cars, which talk directly to the other smart cars around them.
PTC’s AR business accelerated through the 2015 acquisition of Vuforia from Qualcomm for $63M. Since then, the company has expanded its AR capabilities through organic development as well as additional acquisitions. Portfolio highlights include:
Vuforia Engine – consists of a library of computer-vision (CV) and tracking capabilities that enables developers to create powerful cross-platform AR applications
Vuforia Studio – enables AR authors to reuse 3D CAD content, incorporate step-by-step instructions and IoT data, and scale AR authoring and publishing in industrial enterprises
Vuforia View – with this universal CV-enabled browser, end users can consume AR content on phones and tablets running iOS, Android, and Windows, as well as digital eyewear like Microsoft HoloLens.
Vuforia Chalk – enables technicians to get remote assistance from experts
Vuforia Waypoint – allows front-line workers to capture what they do as they go about their job and repurpose that content into AR experiences for new workers being trained.
Vuforia Reality Editor – allows end users to create and edit virtual human machine interfaces (HMIs) for any machine or system that is smart and connected via the IoT
“PTC is building out a comprehensive solution suite around AR under the branding of Vuforia,” said Heppelmann in our interview. “We’ve invested over $100M on in R&D. We’re spending $30M a year, and revenue has grown 80% year over year since we bought Vuforia - much faster than the rate of our investment.
“When we acquired Vuforia, 200,000 developers were using the software development kit (SDK). Today there are 600,000. But Vuforia Engine is only for developers, so we decided to make AR experience creation friendly to non-coders, too -- like technical authors. So we launched Vuforia Studio in late 2017, and since then thousands of companies have tried it, and hundreds have purchased the product.”
Vuforia Engine was built by Qualcomm and primarily is for developers. It’s comprised of a library of AR functions, including planar and depth detection and computer vision. Many developers use it with Unity (which is how we made this AR-enabled book). “We want to bring it downAR to the level of mere mortals,” Heppelmann told me. “Vuforia Studio is a drag-and-drop authoring environment more like a web page builder. Vuforia Chalk is a ‘you see what I see application.’ A remote expert can even mark on objects in your field of view. This is a very powerful concept,” he concluded.
Right now, PTC is focused on what Heppelmann describes as “the low hanging fruit of AR,” which is the manufacturing and service of products and training of people who do those front-line tasks. “AR is the ideal way to bring digital information to front-line workers in the context of their tasks,” he explained. “It drives great improvements in productivity and error Reduction.”
Heppelmann thinks the business and use cases of AR are limitless. Every tool and every machine a front-line worker touches should not only be easy to monitor and service, but also program and operate. AR should work in spaces like factories, plants, or hospital labs, and it should work on objects that move around like trucks or aircraft. He imagines a time in the not-too-distant future where AR is part of everyday life as people interact with the physical world around them. Even traffic lights and stop signs might be virtualized with AR.
“Our current focus is educating customers about the capabilities of these new immersive technologies, helping them best match AR solutions to their business challenges and opportunities – as well as continuing the close partnership through deployment to ensure absolute success.
“I’m a guy who loves technology and loves to get his hands dirty. I saw AR as a perfect complement to our entire portfolio, and I could sense its potential. I’m still the biggest champion within the company. And I just happen to have the resources of the whole company at my disposal to be able to make stuff happen.” The market apparently likes what’s happened. During Heppelmann’s tenure, PTC’s stock increased from $10 to over $100 per share.
