"How to Trounce Competitors, Domino Style," by PTC

A word came up repeatedly (30 times, no less) during PTC's quarterly conference call this week: domino. Seeking Alpha's word analysis determined domino was the 7th Most Frequent Word In This Transcript, coming right after business and Dick.

Here, for example, is PTC ceo, Richard (Dick) Harrison, saying it three times in one sentence:

In addition to the domino account -- and I think that this is something that we want to spend more time on -- I don't want to water down the importance of the domino account that each of the three major geographies, North America, Europe and Asia Pacific, has-- a list of very recognizable named accounts that are owned by our competitors, that have active displacement campaigns today, in addition to the domino account.

From the context, and from the meaning of the word itself (one thing toppling over many others), a domino account appears to be a customer-win so significant that it can knock over competitors. 

Here is an example given by PTC coo [chief operating officer] Jim Heppelmann:

Airbus is our #1 customer by a factor of 2x-3x, and that just gives you the idea of the power behind the domino strategy, and the potential that they are to unlock a huge opportunity for PTC. 

What Mr Heppelmann is hinting to the listening financial analysts is that getting WindChill into Airbus has the potential to knock out Dassault Systemes's CAD software. Or do he dreams.

Here's what I think is a "domino account": PTC convinces a major customer to take on WindChill, its PLM software that works with major CAD packages. With a foot in the door, PTC then dominoes the competition in two ways: (1) by slowly displacing competitor CAD packages with Pro/E; and (2) by attempting to get the major customer's clients to switch to PTC-branded software.

Messrs Harrison and Heppelmann explain:

(1) We have a significant number of developers who work on integrating our competitors' authoring tools or CAD tools into the Windchill database. So it is becoming easier and easier for us to go in and tell the customer, "Keep your Catia seats or your NX seats, and we will manage them directly with the Windchill product." ...the heterogeneous designing context.

(2) ...the commitment to the customer to become married to PTC.

PTC expects domino accounts to generate $5-$10 million a year "once they become mature, in the third year." The company wants to win 10 domino accounts in this fiscal year, and has won 6 so far. Names include:

• Airbus
• Caterpillar
• Lenovo
• Nokia
• Volvo
• A German retailer

Source.

Comments

[Mark Mauno]

One year later (July 28, 2010), at the PTC earnings call, once again 'domino' (in three different forms) was used numerous times. Exactly 30 times, just like a year ago.