In what will be the biggest acquisition to date for PTC, President and CEO Jim Heppelmann announced the company has signed an agreement to acquire Onshape, which creates a SaaS (software-as-a-service) product development platform combining CAD (computer-aided design) with data management and collaboration.

Onshape has received more than $150 million in funding from venture capital firms and has more than 5,000 subscribers. The SaaS platform makes the information accessible from any location. The benefit is distributed and mobile teams can use the cloud to improve collaboration and reduce the time needed to bring new products to market.

The acquisition, which was announced last week (October 23) and is expected to be completed in November 2019, is currently pending regulatory approval and satisfaction of other closing conditions. The acquisition is worth a whopping $470 million, net of cash acquired. Onshape will operate as a business unit within PTC, with current management reporting to Heppelmann.

The acquisition will enable PTC to attract new customers with a SaaS-based product offering and position it to capitalize on the transition to SaaS. It also fits with PTC’s evolution to a recurring revenue business model. Back in January 2019, PTC took the first step to transition to subscription licensing.

It’s no secret that the SaaS model hasn’t been as common in CAD and PLM (product lifecycle management), but it is starting to really become commonplace today. It provides improved collaboration, lower up-front costs, and little to no IT infrastructure to maintain. PTC recognizes the huge opportunity that exists for its new growth markets, all while accelerating its own SaaS transition, Heppelmann explained during the press conference.

Jon Hirschtick, one of the cofounders of Onshape proudly stated during the same press conference that, “We will be putting the hurt rather than being the victim with this technology.”

PTC is really looking at Onshape to complement its AR (augmented reality) with its Vuforia technology and what it can do in the industrial space with the Kepware solution, the ThingWorx IoT platform, coupled with Rockwell’s FactoryTalk and MES (manufacturing execution solutions).

PTC already has a strong story in the IoT space and now we are talking about IoT as a service and PTC is very uniquely positioned to meet customer needs with a SaaS platform along with a host of other impressive solutions and partners.

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