SCRAPPY, YOUNG WEB START-UPS making apps for iPhones may be the darlings of the tech world, but enterprise software companies remain kings of the innovation economy in Massachusetts. And Parametric Technology Corp., a 27-year-old Needham company, is at the top of that heap.
A pioneer of computer-aided design software for engineers, PTC - as it prefers to be known - has in the last few years pushed into new areas of manufacturing. The company’s products help make sophisticated devices like smartphones smarter, but it’s also behind a whole different class of household appliance: more connected and more capable washing machines and refrigerators, for example. Some 27,000 clients worldwide use PTC software, including many of the world’s best-known brands - companies like Whirlpool Corp., Harley-Davidson, Hyundai Motor Co., and Caterpillar Inc.
“We help companies transform the ways they create and service products,’’ said Jim Heppelmann, chief executive officer of PTC.
Last year, PTC’s revenues jumped 20 percent to $1.2 billion, and its market value grew 25 percent to $3.3 billion, making it fifth on the Globe 100 this year, and the top technology company on the list.
PTC’s performance demonstrated the “payoff from long-range planning and a deep investment in their software architecture,’’ said Marc Halpern, vice president at technology research firm Gartner Inc. in Stamford, Conn. Much of that investment, including many of its 19 acquisitions, was made as PTC struggled to move beyond CAD in the 1990s and into the 2000s. That was a rough time for the company, which was beat by a growing number of competitors offering lower prices and moving more swiftly to Web-based technologies.
Heppelmann admits that PTC relied on its early CAD success for far too long before diversifying. When the economy tanked in the dot-com bust, he said, “we took it on the chin.’’
In 2002, PTC was close to the brink. It lost $100 million and laid off 310 employees. Rumors were flying that it would be acquired, according to analysts. But then-chief executive Dick Harrison told skeptical investors and the media that his plans for a comeback meant investing in the next generation of software, which could manage a global supply chain and manufacturing process via the Internet.
It worked, and PTC is now growing. In 2011, Triumph Motorcycles, Mitsubishi Aircraft Corp., and the defense company BAE Systems Inc. signed on to use its software products. Today, the company has 6,100 employees in 30 countries.
Last May, PTC bought MKS Inc., a Canadian software maker that creates programs to help companies manage the manufacturing of smart products, for $300 million. “Strategically, it was a smart acquisition,’’ Halpern said, adding that the deal gave PTC a foothold in a rapidly growing business. “If you think of your car, and how many different models there are, all the variations and varieties require different software components. Managing the configuration of all of this software is a huge deal.’’
There have been some speed bumps. In April, when PTC reported lower than expected earnings for its second quarter of 2012, due to a European deal that didn’t close, Wall Street reacted negatively. The company’s share price fell 21 percent, the largest drop since April 2000.
Heppelmann said it was a disappointing quarter, but the company was still on track to “drive long-term growth and profitability.’’
Now, PTC is looking to reinvent how companies service the goods they make long after they’ve left the assembly line, said Heppelmann. He envisions a not-too-distant future when repairmen in the field carry tablet computers along with their wrenches, using software to diagnose a problem, say, with a cranky washing machine. Just as its software replaced paper blueprints more than a decade ago, PTC wants to make the old-fashioned service manual a relic in the digital age.Michael B. Farrell can be reached at email@example.com.