Around the world there are a lot of engineering software companies, and there are a lot of engineering services companies. However, there are very few that combine the two types of companies, maintain strong relationships with partners, as well as acquire and develop technologies as an ongoing successful business. One such company is Altair Engineering, a comprehensive organization that during 25 years in business, has grown every year, except for 2009, when it still managed to add over 800 new customers.
Altair Engineering began as a consulting firm started by three former GM employees. The company’s co-founder and current chairman/CEO, Jim Scapa, said, “Altair mirrors my personality to at least some extent – entrepreneurial, brutally honest, high integrity, attention to detail, respect for others, and the desire to experiment and push boundaries. The company has evolved, but its fundamental values remain the same.” Unlike some of its competitors, Altair is focused more on good technologies and people with domain expertise than it is strictly market share.
As I was researching and writing this article, I realized that Altair Engineering is as much about people – its employees and the way they treat their customers – as it is about the technologies they provide. As a matter of fact, at a recent Altair Engineering user conference, Mr. Scapa affectionately referred to his customers attending the conference as “Altairians.”
Unlike the perpetual employee turnover revolving door found at many technical software organizations, I was surprised to learn how many of the company’s employees had been with the company for as long as they had. Although the majority of the employees at Altair are engineers, these long timers come with diverse backgrounds that are encouraged to communicate across Altair’s businesses that promote both chaos and clarity of direction for the company. Mr. Scapa said, that Altair is always searching for business opportunities and technology “firsts” and this philosophy is evident when you understand what the company offers and is about.
Complementary Products, Services, and Technologies
Altair Engineering develops a unique mix of software and services that build upon and complement each other. Its offerings range from simulation and analysis (HyperWorks, OptiStruct, RADIOSS), to industrial design (solidThinking) to advanced computing (PBS Works) to data analytics (HiQube) to product development (Altair ProductDesign) to LED lighting (ilumisys) to transportation (BUSolutions). While this broad range may seem a disparate mix, it all makes sense because there is a unique symbiosis between them and how they cohesively work together. Interestingly, with all that the company develops, it does not apply for patents on its software products because it feels they are too difficult to enforce, but it does patent its business models and physical items, such as the LED lighting products.
The company’s flagship software product is HyperWorks, an extensive and comprehensive CAE simulation software suite and platform built on an open architecture. According to Dr. Uwe Schramm, CTO for HyperWorks, “Hyperworks has been ‘open’ from the beginning so users could directly access third party products through our commercial CAD/CAE interfaces or write their own interfaces. HyperWorks is written on an ASCII template and the API is available for all of the suite’s products. Although most of our customers use our software ‘out of the box,’ the next version of HyperWorks (11.0) will have an integrated development environment for automating HyperMesh, HyperView, etc. within the HyperWorks environment,” he said.
The HyperWorks software suite is built on a foundation of design optimization, performance data management, and process automation. HyperWorks is an enterprise-scale simulation suite for design exploration and decision-making. It is a comprehensive, open-architecture CAE suite that includes modeling, analysis, visualization, and data management capabilities for linear and non-linear, structural optimization, fluid-structure interaction, and multi-body dynamics applications.
Dr. Schramm said that he thought the company’s annual major release cycle for HyperWorks has proven to be a good time frame to match customers’ expectations. Altair is keen on high levels of QA, because it doesn’t want its customers to be software testers. The company is also a strong proponent of instructor-led classes for its software products, because of the better feedback received from customers.
When asked to describe advantages of Altair’s design approach over the traditional design process, Dr. Schramm said, “With HyperWorks, simulation is used more in a validation sense. Traditional design approaches discover problems too late in the process, whereas we employ CAE as part of the concept phase,” he said. “Product knowledge and performance is a vital factor in the conceptual phase, not later in the CAD phase.”
Today, with so many CAD products incorporating relatively simplistic CAE capabilities for non-specialists, Dr. Schramm said that the gatekeepers of CAE are still “specialists” with analytic methods, and that as far as CAE UIs are concerned, there is a big difference between “dumbed down” and “easier to use,” and that Altair is definitely focusing on the latter.
A few of the highlights of HyperWorks 11.0 that Dr. Schramm chose to discuss include a common user experience for pre- and post-processing; multi-body simulation; broader finite element (FE) solver (RADIOSS) and optimization (OptiStruct) solutions; and multi-disciplinary optimization. On this last point, Dr Schramm said, “Optimization is not just about getting the best answer, but rather, the most robust answer for better understanding a design. Optimization is a numerical technique, much like FE. Design itself is also an optimization process for fitting a design to fulfill requirements.”
According to the company, HyperWorks 11.0 (due out later this year) will focus on being more intuitive and its GUI will be more graphical in nature. In version 11.0, users will interact with buttons and toolbars in this CAE application suite that are similar to those found in familiar office applications. The intuitive sequence for applying the HyperWorks philosophy/logic will be:
Action (such as create something)Create (such as a surface)Method (such as drag a line)
The ultimate goal of this new philosophy is to provide a fully interactive model in its true 3D state, instead of the 2D representation that is so pervasive in many simulation applications. Altair will continue to develop HyperWorks to the point where it has its own geometry engine for creating the geometry a CAE specialist would need, as well as the ability to model composites in a manner akin to how they are actually manufactured.
When asked how Altair will stay ahead of its competition going forward, Dr. Schramm gave the following points:
• Its overall business model
• Its product design consulting business
• Design-oriented simulation
• Simulation becoming part of the corporate process
• Its unique way of working with partners and not trying to acquire everything
• Its relationship with its user community through education and support.
When the same question was asked to Mr. Scapa, he responded:
• “Our customer support through our people and infrastructure – we actually care about our customers’ success
• Our sales side – high integrity and don’t sell customers software they won’t use. We are more concerned for them to get value.
• Our business model – software as a service with leveling, not stacking.
• Our continuous drive for new and better technology.”
Looking ahead to the future, Mr. Scapa said that Altair would continue to push the envelope on traditional CAE through improved modeling, solvers, and visualization. “We are striving to drive designs with simulation, not just validate them. We want to be stronger in the industrial design space (with solidThinking), and expand beyond our traditional manufacturing markets in to areas such as utilities, retail, financial, and energy analytics.”
Unique Business Model
Beyond its raw technology, one of the things that really sets Altair Engineering apart is its unique business model, such as the HyperWorks licensing system where customers don’t actually purchase a software license, but rather, purchase units for using the software. This business model is strategic to Altair because the company realized and leveraged the fact that purchasing software can often prove more costly than the hardware it runs on. The business model is also a natural extension of its open architecture philosophy, because it lets customers access, explore and leverage the latest technology. Launched in 1999, the units licensing system has proven to be one of the best business decisions Altair ever made, according to Jeff Brennan, Altair’s chief marketing officer. “It required a business risk that could potentially cannibalize then-current business, but has proven to provide huge returns on the usage side for our customers.”
Typically the total number of units (unit pool) purchased by a customer is based on a best-practice assessment/estimate made by Altair and each HyperWorks software application requires a fixed unit draw from this pool to run. With Altair’s leveling concept, in most cases, the end user is only charged for the highest unit-drawing application regardless of how many simultaneous HyperWorks applications are running on his/her local desktop. Further the same unit pool can be enabled across departments, divisions and global sites to more fully leverage a software investment in HyperWorks. In other words, this is a pay-by-usage scenario and charges only apply for maximum usage with no area network, time zone or geographic restrictions.