Exclusive: PTC Buys SI Partner Factora To Boost Industry 4.0 Expertise
PTC has acquired one of its systems integrator partners, Factora, to boost its Industry 4.0 expertise as smart manufacturing deals increasingly fuel the company's fast-growing Internet of Things business, CRN has exclusively learned.
The Boston-based industrial software company closed its acquisition of Factora, a 65-employee company with offices in Trois-Rivières, Quebec, and Atlanta, April 16. The deal closed as the vendor has struggled to hire additional sales talent to fuel demand for its IoT products.
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Financial terms of the deal were not disclosed.
Factora, which was named one of CRN's IoT Innovators last year, will act as a new independent business unit under PTC called the Factory Services unit. The company's CEO, Barry Lynch, has been appointed senior vice president of field services and will report to Patrick Bionducci, PTC's divisional vice president of field services. Charles Horth, Factora's chairman and former CEO, has retired but will stay on as a strategic adviser for a certain period.
In an interview with CRN, Matt Cohen, executive vice president of PTC's worldwide field operations, said the company acquired Factora for the subject matter expertise of its employees so that PTC could better service its customers and partners that are driving growth in smart manufacturing.
“Whether you call it Industry 4.0 or smart manufacturing, the idea of being able to optimize the factory environment and drive productivity gains through connected assets, through augmented service procedures, through predictive analytics, it's a really important area for us,” Cohen said.
During PTC's second-quarter earnings call Wednesday, CEO Jim Heppelmann said that smart manufacturing is the company's “fastest-growing subsegment” in the industrial IoT market, with the company closing “many new and expansion deals in both discrete and process manufacturing.”
The vendor's IoT software revenue, which includes PTC's ThingWorx IoT and Vuforia augmented reality platforms, grew 27 percent year over year to $37 million in the second quarter. In terms of quarterly bookings, which are counted differently than revenue, IoT grew faster than PTC's computer-aided design and product life-cycle management businesses for the first time.
The new Factory Services unit will provide its expertise in smart manufacturing to PTC's internal teams, as well as partners and customers, Cohen said. The new unit's work will include supporting PTC's strategic partnership with Rockwell Automation, which bought a $1 billion stake in PTC last year as part of an agreement that involves both companies and their partners selling each other's solutions.
“We will be able to use the Factora team to actually enable them and then embed a few people onto some of their projects to mentor and coach them as they bring their larger team to scale,” Cohen said.
PTC will also deploy employees from the Factory Services unit to help channel partners with things like product road map and project scoping, according to Cohen. But because of the Factory Services team's small size, its members won't be available to everyone, which is why the unit's largest impact on the channel will be on how it advises PTC on enablement resources for partners, the executive added.
“They're helping us refine the enabling material and the kind of service methodology materials that we provide out to our partners as an augment to their businesses,” Cohen said. “Factora will help us make sure those are of the highest quality and really targeted towards the business value conversation in the factory. And so I think that's where the other partners will benefit the most.”
Cohen said he expects no channel conflict between what the Factory Services unit offers and what PTC's partners offer because the new unit is not independently seeking new business. However, PTC will honor Factora's existing contracts with customers and move Field Services team members to new projects as they become available.
“They have a real strong innovative spirit, but yet a deep domain expertise. They know ThingWorx today, which means they're very quick to ramp, and they've actually invested a lot in ThingWorx,” Cohen said. “And then they're very respected among the other partners. When we get partners together, Factora would always be someone that people were asking advice from, and so that was a a good sign for us as well.”
Factora was formed in 2013 through the merger of manufacturing solution providers STICorp and SlimSoft. At the time, the systems integrator was focused on GE Intelligent Platforms’ Proficy software, but the company became increasingly focused on PTC's ThingWorx and Kepware solutions over the years, according to Lynch, who was named CEO of Factora last fall after serving as the company's vice president of sales and marketing.
“Around 80 [percent to] 90 percent of our work has a PTC element in it. As we go forward, there's going to be a broader engagement of PTC software as we become more skilled in some of the other software they have,” Lynch said.
Lynch, who previously worked for GE Digital, said Factora uses a “business, manufacturing, technology” process for its consulting and systems integration work, which starts by addressing the customer's business case, then figuring out which technologies best apply to the company's manufacturing systems. It's a methodology Factora has already used to advise on PTC's own manufacturing solutions.
“We don't lead with the technology. We lead with the business case, and then the technology becomes the enabler,” Lynch said.
Wayne Brisson, founder and CEO of Aquitas Solutions, a Roswell, Ga.-based PTC partner, said the company's acquisition of Factora makes sense because PTC hasn't had as much of a service presence for smart manufacturing use cases. With Aquitas mostly focused on connected maintenance, Brisson said the new Factory Services unit could aid companies like his in situations when it needs help on the manufacturing side.
“They have the perspective of a partner, so they know the trials and challenges of selling and can help guide [PTC] both from the process side, like the day-to-day transactional challenges, but also from a solution perspective and help partners as well,” he said.