Another Twist in the Tale: What PTC’s acquisition of ServiceMax means for the field service sector

At the start of this year, we once again saw field service management technology provider ServiceMax return to the headlines as PTC, a global provider of software solutions for product lifecycle management, completed its acquisition of the company.

The move has been seen as a significant development for both companies and the field service industry. Having had the privilege of a front-row seat in the long and winding story of ServiceMax for over a decade, Field Service News Editor-in-Chief, Kris Oldland spent time with Neil Barua, CEO of ServiceMax, after the dust had settled on the announcement, to find out precisely what this means for both companies, their customers and the field service industry at large.

An evolving technology tale with many twists and turns:

The story of ServiceMax has been one of many twists and turns, with the company seeing rapid evolution from a start-up based on a project built for the Salesforce app ecosystem in a small Pleasanton office that former CEO Dave Yarnold nostalgically called the beige palace – to becoming the dominant force in field service management. That chapter of the story ended with the acquisition by GE Digital for close to a billion dollars – a staggering amount that stole headlines far beyond the niche of the field service sector.

During the ‘GE-era’, Scott Berg took on the CEO role as Yarnold departed, and the organization had a more muted, focused, and business-like tone. As Berg commented in an interview with Field Service News at the time, ServiceMax had just inherited the world’s largest internal user base of field service engineers. When a globally recognized brand like GE Digital sits over you and your organisation has a billion-dollar price tag, you can no longer play the pioneering upstart role. ServiceMax was now the major player.

This was subtly reinforced in many aspects of the organization, from the more corporate tone of their press releases, the muted grey and blue logo, and even the crisp three-piece suits Berg would be seen wearing on stage and in interviews.

Whether intentional or a byproduct of their immersion in the GE culture, the inference was clear. ServiceMax had grown up and was now taking things more seriously. This, of course, is something of a double-edged sword. While the world of enterprise perhaps expects their pinstripe personas to be reflected back at them; it was the swashbuckling can-do attitude of ServiceMax that had been at the heart of their ability to outpace the opposition both in terms of technology and commercial success picking up major organizations like Coca-Cola, Scheider Electric and Becton Dickinson in the process.

With the benefit of hindsight, GE and ServiceMax were never an ideal match. On the surface, the acquisition made perfect sense, even if the amount GE invested in acquiring the company was surprising. However, it came in a raft of other acquisitions for GE Digital that, again, while from the outside, one could see the line of thinking in terms of the vision, the integration was never adequate to build a compelling whole outside of the bold hyperbole laced pronouncements of the GE marketing department.

So when GE announced the sale of ServiceMax as part of its dismantling of the broader portfolio of GE Digital, for those close to the situation, there was less surprise – it was a brave experiment but placing Predix at the heart of the ecosystem, a solution once described “as an incredible solution to a problem no-one has” meant this particular incarnation of GE Digital was always facing an uphill challenge.

"Interestingly, particularly for a PE Acquisition, Barua's iteration of ServiceMax seemed to straddle the corporate persona of ServiceMax both pre and post-GE..."

However, for those who only saw the headlines, an air of failure was now attached to ServiceMax, perhaps for the first time.

This was, of course, a largely unfair assessment. GE maintained a share of ServiceMax and had spent the last two years implementing the solution across their vast field service engineering business units, which remains present today. In many ways, Berg was correct; GE did become the world’s largest-ever field service customer for ServiceMax – they just went about things differently.

Yet, the reality is that by becoming the biggest brand in the field service sector, ServiceMax was under greater scrutiny than ever before, and the speculation as to why things went sour so quickly with GE was always going to be a popular gossip point, no doubt fuelled by occasional yet persistent careful whispers of the competition.

Given the high profile status of the GE acquisition, it was inevitable that the quiet sale of the brand to private equity technology specialists Silverlake only two years later had many openly questioning the future of the California-based company.

The Silverlake Years

However, under the stewardship of a new CEO Neil Barua, ServiceMax once again re-invented itself. Interestingly, particularly for a PE Acquisition, Barua’s iteration of ServiceMax seemed to straddle the corporate persona of ServiceMax both pre and post-GE. Barua’s ServiceMax seemed to tap back into the more swashbuckling pioneer mentality of Yarnold’s era (the two know each other, and there are certainly similarities in their leadership styles).

Much of this shift is almost imperceptible at first glance. But as someone who has worked closely alongside the ServiceMax team across these iterations, the best way I could phrase it is that Barua reintroduced the ‘swagger’ to ServiceMax, by imprinting his own vibrant leadership style across the organisation.

However, the lessons of the GE era have also held their impact. While not the outcome they might have envisioned when beginning their ill-fated sojourn as part of the GE family, there is no doubt the ServiceMax team, in general, is more refined for that experience.

From a technology perspective, the subsequent years under Barua’s leadership saw an exciting evolution and simultaneous return to roots for ServiceMax.

On the one hand, we saw the release of Asset360, building on the direction they had been heading in under GE Digital and going a long way to filling an obvious gap in modern field service by driving meaningful and actionable insight from the increasingly vast amounts of data generated in the field.

Yet, at the same time, the promotion of Asset360 was heavily centered around their ever-greater harmony with Salesforce. This integration was driven in no small part by the investment of $80 million from Salesforce Ventures. Indeed, whether this partnership would become even more formal was a matter of open discussion in many analyst circles in our industry. Yet, once more, there was a twist in the ServiceMax tale as PTC re-entered the picture.

In a timeline that sometimes feels like an epic Norse saga and at others the plot of a daytime Australian soap opera, PTC was heavily rumored to be seeking to acquire ServiceMax in 2016 before the GE acquisition. Whether it is as the conquering Viking hero or a spurned lover back from exile, there was a definite poetic character arc at play as they re-entered the stage rather suddenly.

So now ServiceMax enters yet another new act in what has become the captivating story of the decade for field service management technology. But what is the rationale for PTC’s acquisition of ServiceMax?

"The world is moving from selling products to selling outcomes, and in order to sell outcomes, you have to be able to manage both the product and the service...." Neil Barua, ServiceMax

What made this an attractive deal for PTC?

On the surface, PTC’s acquisition is reasonably straightforward. They have acquired ServiceMax as part of a strategic move to extend their presence in the field service management sector.

Indeed, PTC’s expertise in product lifecycle management software combined with ServiceMax’s expertise in service execution management software creates a complete picture of the product and service lifecycle. “What we’re trying to do is close the loop between the product and the service,” said Barua. “By bringing those two together, we can create a full digital thread from the design of the product all the way to the execution of the service. The world is moving from selling products to selling outcomes, and in order to sell outcomes, you have to be able to manage both the product and the service. We believe that by bringing these two companies together, we can really drive that change in the industry and help our customers achieve their goals.”

We can certainly see this from the onset.

ServiceMax’s solutions, such as Asset 360, neatly fill the gaps in the SLM portfolio PTC already has, including some very sophisticated tools such as AR technology Vuforia and IoT connectivity platform ThingWorx (which ServiceMax already has native integration into). From the technology perspective, introducing ServiceMax’s suite of solutions will make PTC’s SLM solutions as compelling as their market-leading PLM solutions.

But what does this mean for the relationship with and integration with Salesforce?

As ServiceMax re-establishes closer ties to the Salesforce ecosystem, it’s natural to ask whether there will be friction between PTC and Salesforce. However, according to Barua, the two companies are quite complementary, and ServiceMax’s integration with Salesforce was part of the attraction to PTC.

“PTC is focused on the product side of the business, and Salesforce is focused on the customer side of the business,” he said. “We believe that the two companies can work together to create a complete view of the customer and the product. We’re going to continue to invest in our Salesforce integration, and we believe that Salesforce will continue to be a key partner for us.”

How will the acquisition impact customers of both companies and the industry at large?

Of course, when any acquisition is completed, there are inevitable questions about how the integration will impact the customer base of both companies.

From a ServiceMax customer perspective, however, the intention is to deliver minimal disruption and an increased layer of tools to help them drive their field service operational efficiencies even further. In short, they can continue to expect the same level of innovation and investment in the platform that the company has always offered. “We’re going to continue to invest in our core service execution capabilities, but we’re also going to invest in new areas such as artificial intelligence and predictive analytics,” explained Barua.

Perhaps more interestingly is for the existing PTC customer base. From a PTC customer perspective, they can now start incorporating the service part of their business into their product offerings. “They can start to think about service as a key differentiator for their products,” said Barua. “We are really excited about what we can do from a support standpoint for both sets of customers. We have a large and talented support team, and we’re going to continue to invest in that team to ensure that our customers get the help they need.”

This certainly leans into the prevailing winds of outcome-based and servitize solutions.

“When customers are building complex products, the service element is always an afterthought,” said Barua. “But with the combination of PTC and ServiceMax, we can now give customers the ability to design the service upfront. We can enable customers to have real-time visibility into the status of their products and how they’re performing in the field. By combining our capabilities, we can now give customers a 360-degree view of their products and services. This is really important because it enables our customers to optimize their products and services for maximum value. We believe that this is going to be a key differentiator for our customers in the marketplace.”

The field service industry is at an inflection point, and the acquisition of ServiceMax by PTC is sure to accelerate its digital transformation.

As the industry continues to evolve and embrace new technologies, the combination of PTC and ServiceMax is well-positioned to lead the way. “We’re really excited about the future of the field service industry,” said Barua. “We believe that we can help our customers achieve their goals by providing them with the technology and expertise they need to succeed. It’s going to be an exciting time for the industry, and we’re thrilled to be a part of it.”

The acquisition of ServiceMax by PTC will accelerate the digital transformation of the field service industry. “We’re going to see more investment in this space, more innovation, and more transformation,” said Barua.

“The combination of PTC and ServiceMax will catalyze that change. We believe we can help our customers achieve their goals by providing them with the technology and expertise they need to succeed. It will enable our customers to create new revenue streams and differentiate themselves in the marketplace. We believe that the future of the field service industry is bright, and the combination of PTC and ServiceMax is sure to be a significant force in driving its continued growth and transformation.

Ultimately, the acquisition of ServiceMax by PTC represents a significant step forward for the field service industry.

Bringing together two best-in-class companies with complementary technologies and expertise can help customers optimize their products and services, create new revenue streams, and differentiate themselves in the marketplace.

The future of the field service industry is bright, and the combination of PTC and ServiceMax is sure to be a significant force in driving its continued growth and transformation.