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2 February 2018

PTC and Microsoft move closer, as IoT PaaS market set to consolidate

IoT Platform-as-a-Service provider PTC has announced that Microsoft is now its preferred cloud partner for industrial deployments, and has made its ThingWorx PaaS available on the Azure cloud. It follows a VR/AR partnership with Microsoft last year, and a win with BMW last week, but comes in a year likely to play host to a lot of IoT PaaS consolidation.

The BMW deal was a big win for PTC, a company at the forefront of the IoT PaaS market, which collectively provides the platforms on which a company can build their IoT applications – covering the entire data flow, from network-edge device to cloud-based data service.

But the IoT PaaS market as a whole has some tough times ahead of it. Depending on your definition, there are dozens to hundreds of companies offering similar services – all clamoring for the same customers. With the largest IT and cloud providers already entrenched, many of the smaller vendors are going to find themselves squeezed out.

Many will be acquired or merge together to form mid-sized players, but it seems apparent that there is not enough of a market to support so many rivals. That pressure is only increased as larger hardware vendors move to offer software and services on top of their products. Sure, there are opportunities here for PaaS and SaaS vendors, but for the largest manufacturers, the lure of a ‘trusted’ brand name will usually win out over a smaller startup.

But PTC looks to be doing well. Last week, it announced BMW as a customer for its Windchill Product Lifecycle Management (PLM), with the automaker saying it planned to use PTC for its PLM backbone, to power global production and sourcing bill-of-materials (BOM). In a global deployment, the BMW Group said it hoped to boost efficiency and achieve a leaner global production planning process.

BMW also said it was going to use ThingWorx Navigate, a new tool for providing role-based access to product data, which the pair say will radically simplify data access. It should enable different users to access only the pieces of data that they need, and keep more sensitive parts away from their eyes. PTC says Navigate solves a lot of the headaches that arose from older ways of doing this permission-based access.

This week’s integration will specifically see ThingWorx Industrial Innovation Platform running on Microsoft Azure IoT, supported by PTC’s wider portfolio, which includes Creo, Windchill, and Vuforia. The latter was acquired from Qualcomm for $65m, and formed the basis of PTC’s AR/VR range, which then saw PTC and Microsoft partner in October 2017 to explore the potential of the HoloLens Mixed Reality headset in enterprise deployments.

Riot has covered the Vuforia tech before, and is generally optimistic for this sort of technology. By delivering data and instructions through the AR screen, the system can be used to speed up manual processes, by allowing the technician to see the next step on screen, instead of having to consult a manual. In a similar vein, it could help staff become more general in their knowledge, which would allow a firm to move from having specialist workers to more general-purpose staff – able to follow guides created provided by the headset.

This could significantly reduce training times, and allow for more efficient worker allocation – which could significantly cut a wage bill. Similarly, it allows field staff to phone home if they encounter difficulties, using the headset to stream video and talk to support staff in a call center. This could cut the need for repeat visits, and allow for better management visibility – slashing variable costs.

But the AR tech makes most sense when offered as part of a platform offering – which is exactly why PTC shelled out for it in the first place. PTC offers the product design software in which many devices are designed, as well as the Windchill PLM systems to manage their production, sale, and post-sale services. With the AR tools, a customer can use their CAD designs to power the maintenance application that a field worker will use to service it in the field – with the headset recognizing the VuMark (essentially QR) codes that are installed on the bike in design.

An example of this capability was a KTM motorcycle technician being guided through how to replace an oxygen sensor in the exhaust system of bike, and how to replace it. The application was showing them how to rotate specific components in order to access the sensor, in a process that would save a lot of time for the worker.

The completion of the work could then be registered in a CRM system, which can trigger actions in the warranty and customer records tools that a PaaS like ThingWorx enables. For PTC, the complete stack allows it to service customers that are looking to sell increasingly complex devices and services into markets – who rely on PTC to provide the tools to enable such stacked services.

“This collaboration combines Microsoft’s expertise in the intelligent cloud business with PTC’s leadership position in IoT, product design, manufacturing, and service,” said Jim Heppelmann, PTC’s president and CEO PTC. “This is exactly the combination customers require to unlock the value in their digital transformation journeys.”

“We are pleased that Azure is PTC’s preferred cloud platform to help accelerate digital transformation in IoT, particularly for customers in the manufacturing industry,” said Jason Zander, Corporate VP of Microsoft Azure. “Combining PTC’s platform with the speed, scalability, and intelligence of Azure will enable customers to accelerate industrial innovation.”