PTC Buys AR Services Firm, Hires McKinsey Exec For New Solutions Group

'We're probably five years out for people to really start adopting [augmented reality], but if PTC can really invest into this and make it easy for partners to utilize it, then I think the adoption of AR will come faster,' one PTC partner says of the company's Twnkls acquisition.


PTC has acquired augmented reality services firm Twnkls and hired a McKinsey executive to start a new digital transformation solutions group in a bid to accelerate customer adoption of its software.

The Boston-based company announced on Tuesday at its LiveWorx conference the acquisition of Twnkls, a roughly 30-person team based in the Netherlands, and the hiring of Craig Melrose, a partner at McKinsey who was most recently the head of the firm's digital manufacturing practice.

Financial terms of the Twnkls acquisition were not disclosed.

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Michael Hayes, director of development at Aquitas Solutions, a Roswell, Ga.-based PTC partner that mainly works with PTC's ThingWorx IoT platform, called the Twnkls acquisition a good idea and said it could help lower the barriers for adoption of AR, especially from a headcount perspective.

"We're probably five years out for people to really start adopting this, but if PTC can really invest into this and make it easy for partners to utilize it, then I think the adoption of AR will come faster," he said.

Jim Heppelmann, CEO of PTC, said the thinking behind the Twnkls acquisition was similar to PTC's recent acquisition of systems integration partner Factora: The company needs more subject matter experts to accelerate deployments with customers and partners for AR and the industrial Internet of Things, which are the company's fastest growing businesses.

"PTC, in general, is a software company, not a services company, but we do want to have enough services capacity to do the early implementations, to work with the strategic customers and frankly to enable and then support bigger ecosystem providers," Heppelmann said.

The CEO said as a firm that has worked on the "most advanced AR implementations in the world," Twnkls will give PTC an important capability to "train the trainers and teach the teachers."

"We don't have an aspiration to build a big services business, but we do have almost an obligation to make sure we can support all the partners and the customers," he said.

John Gray, PTC's channel chief, said both Factora, which is now known as the Factory Services Unit, and Twnkls will not compete for business with partners, steering clear of channel conflict. In fact, he said, the company needs more partners like Twnkls to help PTC keep up with all the AR opportunities.

"The business is growing so fast, if we don't get those partners recruited, we're going to have a problem, because there's more and more of that work that needs to be done," Gray said.

McKinsey Exec Will Head New Digital Transformation Group

With the hiring of McKinsey's Melrose, Heppelmann said the executive will head up PTC's new Digital Transformation Solutions group, which will focus on creating packaged solutions from the company's software stack that are more scalable than solutions that are developed for single customers.

"We'll always sell the enabling technologies," Heppelmann said. "We just want to get better at showing you what to do with them, so that you don't have to figure it out."

According to Melrose's LinkedIn profile, he has been at McKinsey since 1999. He starts at PTC on July 8, Heppelmann said, and his title will be executive vice president of Digital Transformation Solutions, according to a PTC spokesperson.

Maddy Hawkins, director of IoT sales at Aquitas, said that PTC's plan to start a solutions practice is similar to her company's focus on selling a connected maintenance solution, which is based around PTC's ThingWorx platform and IBM's Maximo enterprise asset management software.

"It's also great that [Melrose] has the manufacturing background for us, with so many customers in the manufacturing space, so he's got the understanding of how to actually combine the PTC products in a way that creates solutions that are effective," she said.

Hayes, the director of development of Aquitas, said with the new practice, PTC should make sure that partners will be able to take advantage of the new solutions that are created.

"I think there needs to be a good balance between what they're doing and involving the partners , so that maybe as partners, we can leverage what they're doing and not compete for what they're doing," he said.