Visualize the challenge

NEEDHAM -- Outside the campus-like headquarters of Parametric Technology Corp. on a late summer afternoon, employees crowd around a pair of Callaway sports cars, peering under the hoods at engines that have been supercharged to race at 190 miles per hour.

Inside the company's customer center, two representatives from Callaway Cars, the Old Lyme, Conn., company that builds and modifies high-performance cars using PTC's computer-aided design software, are poring over design problems with a PTC product team in a darkened conference room.

The visualization features in the PTC software allow the Callaway engineers to study three-dimensional images of rotating auto parts projected on a giant screen as they try to determine how to position an intake valve so that the car hood will close.

``In the past, we would have had to build a prototype to check the fit," said Mike Zoner , Callaway managing director. ``This software helps us understand the geometric constraints."

Closer collaboration with customers, and new software programs that let companies manage their work flow, have transformed PTC, a company once known almost exclusively for making computer-aided design, or CAD, tools, into a provider of what has become known within manufacturing as ``product lifestyle management." In the past year alone, its diversified suite of software applications has landed PTC high-profile customers, including Honda Motor Co. and Black & Decker, that manage complicated product rollouts with designers, suppliers, and consumers.

``We've been working to broaden our footprint so we can be more strategic to our customers," said C. Richard Harrison , PTC's president and chief executive, just back from a trip to Japan, where he met with Honda representatives. ``As business goes global, the need to collaborate accelerates. And we have the best collaboration engine."

Callaway is part of a parade of customers from around the globe, from automaker Toyota Motor Corp. to aircraft builder Boeing Co. to farm equipment giant Deere & Co., making the pilgrimage to PTC. At the corporate visit center, they learn how to manipulate features of Wildfire, the latest version of PTC's signature Pro/Engineer software, and related applications that help them design products faster and more accurately, and better communicate with suppliers and users.

PTC is the largest Massachusetts software company with substantial operations in the state and, unlike many of its peers, it is growing. With its $63.2 million purchase of Mathsoft Engineering & Education Inc. in Cambridge last April, part of an acquisition push that has expanded the company's product line, PTC now employs over 1,000 people in the state, up more than 20 percent from its 800 last year. Its workforce has increased by about 700 to 4,300 since the start of the year. And the company plans to hire another 350 workers in the coming year, including at least 60 at its corporate offices here.

In product lifestyle management revenue, PTC trails only French conglomerate Dassault Systemes, which owns CAD toolmaker SolidWorks Corp. of Concord, and UGS Corp. of Plano, Tex., according to AMR Research in Boston. After climbing 9.2 percent to $721 million last year, PTC's revenue is projected to jump another 15 percent to about $830 million in 2006. Net income at PTC, which lost money in 2002 and 2003, surged 140 percent to $83.6 million in 2005; it's projected to grow about 20 percent this year to about $100 million.

Investors warmed to the stock after a strong second-quarter earnings report. PTC's shares have climbed nearly 50 percent over the past three months, closing Friday at $17.46 on the Nasdaq exchange.

While its customer base remains heavily focused on manufacturing and engineering, unlike some of its larger competitors, PTC's string of acquisitions in recent years has positioned it to push into new arenas like financial services, suggested Mike Burkett , AMR's vice president of research. He cited PTC's $190 million purchase last year of Arbortext Inc., a company that publishes user manuals and other documents to support the release of products. Arbortext of Ann Arbor, Mich., can help investment companies roll out mutual funds just as it helps manufacturers introduce new toasters or lawn mowers.

PTC's buying spree began in 1998, when it snapped up Windchill Technology, a Minnesota developer of work flow management software, and continued most recently with the acquisition of Mathsoft, a provider of software for making technical calculations. Harrison said PTC is still scouting for other acquisitions that would complement its product line and extend its reach beyond mechanical engineers to manufacturing, supply chain, and quality control managers.

The shift has meant a different approach to marketing in new niches that are experiencing double-digit annual growth, AMR estimates. ``PTC was a CAD-focused company," Burkett said. ``They had a sales force that knew how to sell packaged software. With the new products they've acquired, they've had to retrain sales people to sell non-CAD products to people on the business side, not just to engineers."

PTC prospered in the early 1990s through off-the-shelf sales of its Pro/Engineer computer-aided design package. But it faltered late in the decade when its rivals began to offer broader features and more consultation for customers.

``We didn't stick around and help these companies make their businesses better," conceded PTC's chief product officer, James Heppelmann , who joined the company when it acquired Windchill. ``Starting in 2001 and 2002, we went back to the drawing board. We said we should really partner with customers and help them bring their products to market. We wanted to understand the set of processes they run, their requirements and design concepts."

Identifying some two dozen processes manufacturers go through to take products from concept to delivery, PTC has spent the past five years filling in its product line. Windchill software, for example, helps engineers get requirements from their marketing departments and send their designs to the production floors, where the products are built, and to technical publishing, where user manuals are designed. Arbortext software automates the publishing of manuals and keeps it on the same cycle as the production of products. Mathcad, the Mathsoft application, helps engineers calculate how products will operate.

``It's all about virtual product definition," said Michael M. Campbell , the PTC vice president of product management. ``We want our customers to have confidence in their products before they spend a time cutting metal."

Robert Weisman can be reached at weisman@globe.com.