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Common Sense Advisory Blogs
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PTC Announces Acquisition of Arbortext
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In another example of programming code converging with more traditional content, product life cycle management (PLM) company purchased Arbortext. Arbortext, a long-time player in the SGML document management market that had segued to the XML market, brought in revenue of US$40 million over the last year. That 4.75x price multiplier ($190M for $40M in revenue) seems high, but takes into account Arbortext's installed base of publishing, pharmaceuticals, financial services, and government users. It also reflects PTC's hopes for extending its support of the global content value chain.
This value chain begins with the creation of original content and continues through a variety of transformations. Each modification -- an edit, additional detail, a file conversion -- adds more value to the content. More substantial revisions -- a port to a phone, rewriting into a more colloquial speech register, or a full translation to another language -- add even more worth. Information architectures at multinational companies have to make these transformations before they can deliver code/content in the required format. That melding of application and words -- and ability to deal with multiple transformations -- is why PTC paid a lot of money for Arbortext.
Looking ahead, the internet and an increasingly mobile population mean that international companies will add global websites and multilingual e-mail, internal applications, collaborative applications, and 3G content to their list of "must-have" dynamic publications. More advanced systems -- customer relationship management (CRM), business analytics, transactions, support, and even video games -- will increase the demand for adapting these materials to specific market requirements in real time.
PTC has a good sense of global market opportunities, while Arbortext was mainly focused on the U.S. and Japan. Adding Arbortext's XML CMS to PTC's mix of a broader presence, bigger sales force, and PLM lays the foundation for a comprehensive information life cycle solution. As with any acquisition, the proof will come in the execution of the merged technology and value proposition. For this deal, we'll also look at how well it enhances PTC's ability to manage a code and content life cycles that span international borders.
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