There's a direct correlation between the proliferation of augmented reality apps and the demand for 3D content, and PTC just quantified that in dollars.
On Wednesday, the company committed $470 million to acquire Onshape, makers of computer-aided design (CAD) software that has amassed $150 million in funding and more than 5,000 subscribers since its founding in 2012. Barclays advised PTC on the acquisition.
Onshape delivers its platform via the software as a service (SaaS) model, giving PTC a recurring revenue stream alongside its existing CAD offerings, supplying its customers with easily deployable CAD capabilities, and enabling its users to access the software anywhere from any desktop or mobile device.
"Today, we see small and medium-sized CAD customers in the high-growth part of the CAD market shifting their interest toward SaaS delivery models, and we expect interest from larger customers to grow over time," said Jim Heppelmann, president and CEO of PTC, in a statement. "The acquisition of Onshape complements our on-premises business with the industry's only proven, scalable pure SaaS platform, which we expect will open new CAD and PLM growth opportunities while positioning PTC to be the leader as the market transitions toward the SaaS model."
The software also includes data management and collaboration features that enable large teams of designers and developers to create content more efficiently. Think of it like Google Docs, where users can edit the same file in a live flow.
Onshape will operate as a business unit within PTC, the same as Vuforia, the popular augmented reality platform that PTC acquired from Qualcomm in 2015 for $65 million.
"PTC has earned a reputation for successfully pursuing new innovations that drive corporate growth," said Heppelmann.
Between Onshape and Vuforia, PTC can now supply the software for teams to collaboratively build CAD-based 3D designs and content as well as the tools for integrating that content into augmented reality experiences.
"If you think about our augmented reality platform Vuforia, and especially parts of it like Vuforia Studio as we call it, it's really a 3D authoring and publishing application. It's all about authoring what are effectively 3D webpages, except their web shapes, and then rendering them on the other end using computer vision against the real world," said Heppelmann during an investor webcast about the acquisition.
While CAD has a different set of use cases, particularly in engineering and product design, outside of augmented reality compared to other content creation technologies, it is instrumental in creating precise 3D models for AR experiences as well as providing markers for object recognition. And creators of AR experiences may benefit from the same data management features as engineers and product designers.
"An important core part of Vuforia is authoring of 3D data and data management and collaboration and the process of doing that. There [are] huge synergies here between Vuforia, which is a 3D application that requires data management and collaboration, and Onshape, which is a 3D application that has great data management and collaboration," said Heppelmann. "We're going to get some quick benefits in the world of bringing Vuforia and Onshape closer together, and that will add some incredible capabilities to both of those brands, because Onshape is soon going to have amazing AR capabilities, and Vuforia is soon going to have amazing data management and collaboration capabilities in one seamless flow."
In addition, Onshape gives PTC and Vuforia some additional footing in the Magic Leap ecosystem. Onshape has adapted its CAD software for the Magic Leap One, enabling multiple users to collaborate on a 3D design in augmented reality. That means that as PTC begins to integrate Onshape with Vuforia, AR developers could have the opportunity to build the 3D content for their AR apps in AR.
Based in Cambridge, Massachusetts, Onshape was founded by Jon Hirschtick, John McEleney, and Dave Corcoran, who were instrumental in the development and growth of another 3D CAD platform, Solidworks, which itself was acquired by Dassault Systems in 1997 for $310 million.
"At Onshape, we share PTC's vision for helping organizations transform the way they develop products," said Jon Hirschtick, the CEO and co-founder of Onshape (who has also served as an advisor to Magic Leap and has been a long-time friend of Magic Leap CEO Rony Abovitz). "We and PTC believe that the product development industry is nearing the 'tipping point' for SaaS adoption of CAD and data management tools. We look forward to empowering the customers we serve with the latest innovations to improve their competitive positions."
There's been a run on acquiring 3D content technology throughout 2019. Recently, Verizon picked up volumetric video provider Jaunt while Apple scooped up motion capture company iKinema. Earlier this year, Adobe absorbed 3D content software maker Allegorithmic, while Magic Leap made Mimesys and its 3D telepresence technology a part of its operations. On the investment end, Matterport closed a $48 million funding round for its 3D content capture technology.
With its own acquisition, though, PTC has not only strengthened its CAD offerings but created a new solution for efficiently building 3D content and augmented reality experiences together.