Hagerman & Company, Inc. Technology Bulletin

Parametric Technology Corporation has put itself on the market for $2 billion, according to reports published in Ten Links and elsewhere. A subsequent article indicated that management has shrewdly awarded itself “takeover bonuses” of millions of dollars that will kick in if ownership of the company changes, even if they get jobs with the new owners.

Too bad PTC’s customers don’t get any takeover bonuses if the company is sold. A sale of the developer of software you have invested in is rarely good news. The likelihood of another software company purchasing and maintaining PTC’s aging algorithms seems remote. An even worse eventuality might be that no one is willing to pay $ 2 billion for the company. Can you imagine that R&D will continue unabated while management tries to sell the company? It seems likely that would be the first place to cut expenses.

For an example of what might happen if a deal does occur, consider EDS’ acquisition of SDRC (SDRC development abandoned and customers forced to migrate to EDS’ UG software) or SDRC’s acquisition of Point Control (Point Control development abandoned and customers urged to migrate to SDRC).

Already we’re starting to see customers dumping PTC software for Autodesk Inventor.  We expect to see much more of it as customers begin to comprehend the potential impact of a company sale or wind-down of R&D on their investment.

PTC’s colorful history has included its decision to sack the entire reseller channel back in the 90’s. Later, they recanted and tried to lure resellers back. Throughout its history the company has been notorious for hard-sell tactics including dissing customers to their faces, and insulting those who had reservations about the software.

If you’re currently invested in PTC software and want to consider your escape options, please give us a call. Autodesk has excellent tools permitting integration with PTC.