PTC makes an AR/VR services acquisition

/ June 17, 2019/ AR/VR, M&As (small under $50m in revenues), PTC, _ Services

On the same week Dassault Systemes made its largest acquisition ever, PTC acquire a small Netherlands-based IT services firm that is specialized in creating AR-based use cases. TWNKLS has a headcount of 36.

This is an interesting acquisition for several reasons:

First, while PTC remains software-centric, the company admitted lack of service resources, i.e., consultants hit the growth of its IoT unit (ThingWorx), which also includes Vuforia (AR/VR). PTC is, therefore, acting on its lack of resources.

Second, IoT and AR/VR can be a hard sell for IoT platform ISVs, as the clients are mostly business lines. Business lines do not purchase IoT or AR/VR for the sake of buying technology (like IT departments do) but buy use cases. PTC is, therefore, putting a use case wrap around its AR/VR products, along with adding consulting capabilities.

Third, the number of AR/VR use cases is quite limited to technical training, marketing/sales, and field operators. That does not mean the AR/VR will remain a niche industry. Looking at the type of client case studies TWKLS, AR/VE has the potential to expand to a larger market, in particular with the convergence of smartphones and AR/VR devices.

Four, AR/VR projects are mobile app projects on steroids. While some projects can be short, others involve integration with back-end systems, customized software development in addition to computer vision and 3D modeling (for producing high-quality models).

With this in mind, we are surprised that none of the ER&D service vendors we tracked has made a similar acquisition. We are guessing that this is about to change.