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.
One of the primary advantages to this business model is the unit price based on leveraged units. For example, while the capabilities in each HyperWorks release are significantly increased, the real price does not really rise. The economy of scale with this business model is really evident for so-called “casual users,” who don’t have to pay extra fees for multi-CPU applications, such as batch meshers or solvers.
So, isn’t this business model “cloud computing?” According to Altair, no, because it currently employs software only, but the company does have a vision for cloud computing.
Atair’s Compute Cloud
Cloud computing has become this year’s most over-used and over-hyped technology that is “the next big thing.” While a number of companies talk about it, relatively few have actually implemented it, much less made a compelling business case for it.
Knowing that as much as 85% of computing capacity sits idle, and on average, 70% of IT budgets are spent on maintaining current IT infrastructures, Altair is entering the computing cloud realm prudently.
Altair’s compute cloud plan calls for using purchased units to leverage hardware as well as software with scalability on the hardware resource and software application sides. The compute cloud will create access to on-demand hardware services and software stack (currently configured to run the HyperWorks stack), and is especially appropriate for high-end, CPU-intensive applications because it balances hardware availability and demand.
Ravi Kunju, regional managing director of enterprise computing and analytics who heads up Altair’s compute cloud program said that ultimately, the company’s compute cloud will address issues beyond computing to include software, services, infrastructure, etc.
So, how does it work? “With five basic steps,” Mr. Kunju said. “An authorized user submits a job though Altair’s PBS Catalyst (desktop job submission and management portal); the Altair cloud verifies the user’s license units; the compute workload is then automatically scheduled and executed across the compute cloud using Altair’s PBS Professional workload management technology and notifies the user upon completion; results are visualized in the cloud; and the user downloads results data for further analysis.”
Altair’s cloud center facility contains state of the art hardware and security that requires fingerprint and iris scans to enter and exit the facility.
Currently, Altair has one compute cloud customer (whom the company asked to remain anonymous), but Altair did run its CAD2CRASH24 program with its compute cloud. See MCADCafe Weekly for May 10, 2010 for details on the CAD2CRASH24 program.
Mr. Scapa said that Altair’s compute cloud is still regarded as experimental, but would like to ramp up to approximately 15 customers to prove its feasibility on a larger scale before the end of this year. “For us, the compute cloud is still a question,” he said. “It could be successful, but technical and business challenges remain to be overcome.”
The compute cloud is the next logical step for Altair’s infrastructure as the company tweaks the technology and business models for larger scale availability.
Altair’s Product Development Ventures
Altair is not just about software, the company also provides product development services globally and has a couple major internal product development programs it is working on, largely in the interest of sustainability. The company actually regards sustainability as an extension of optimization.
First is ilumisys, an Altair company focused on solid-state lighting technology. The company was formed in 2007 as a spinoff venture and wholly owned subsidiary of Altair Engineering, Inc. with initial products based on Altair’s intellectual property for directly replacing fluorescent light tubes with light-emitting diode (LED) lamps. The genesis of Altair’s dive into solid state lighting hails from a patent submitted in the late 1990’s following an internal market research study in the transportation sector. At the time, LED technology lacked the lumen performance and was cost-prohibitive to compete against fluorescent and incandescent lighting. Today, that’s all changed and with the heightened public and corporate awareness around sustainability, Altair stands poised to capitalize on this blue-sky intellectual property investment.
Altair admits that the LED lighting market is a dynamic and confused landscape of quick start-ups, and importers. Altair is also aware that the market is currently flooded with poorly executed, similar looking LED products, that fail to meet the hyped-up product claims. However, the movement towards LED lighting continues to outpace expectations and ilumisys plays an active thought-leadership role together with its partners and channel. ilumisys develops and manufactures highly engineered LED fluorescent tube replacements, with three patents already awarded and 55+ pending, that take full advantage of the latest advancements in LED technology.
The second product development venture is BUSolutions, a collaborative effort between public and private entities to research, develop, and commercialize advanced transit bus systems that are significantly more fuel efficient, have lower operating and maintenance costs, are competitively priced, and can operate without updating the infrastructure of existing transit authorities.
By incorporating the needs of the drivers and riders, while addressing America's energy and emissions challenges, the proposed bus will employ an advanced Series Hydraulic Hybrid (SHH) power unit, be lighter and shorter than current designs, but also seat additional passengers that will translate into significantly improved fuel economy. The new bus is designed to have a lower total cost of ownership including reduced fuel consumption; reduced wear on city streets and regional roadways; reduced brake, tire and component wear; less noise and pollution; and can operate without updating the infrastructure of existing transit authorities.
The BUSolutions program includes several partner/sponsor companies that are incorporating state-of-the-art components and technologies for transportation. Program sponsors include Arvin Meritor, Parker, Sundyne, PRAN, Sika Corporation, Mertior WABCO, Alcoa Howmet, Carrier Corporation, LAAD Industries, Pretoria Transit Interiors, Shaw Development, USSC Group, and Williams Controls.
Once the build of the first technology demonstrator bus is complete, Altair will conduct testing to validate the reductions in fuel, maintenance and lifetime-operation costs. Any necessary improvements will be incorporated so the design is production ready, ensuring a smooth transition of the program into a commercialization phase. The program plan calls for a drivable fuel economy demonstrator by Q3 2010 after which the production prototype will be completed and production ramp up plans executed.
Some of the vehicle’s innovations include:
• Hydraulic Hybrid Technology with three unique modes of operation that reduce fuel consumption
o Brake energy recovery
o Optimized engine control
o Engine-off strategy
• Powertrain Cooling - high capacity, low maintenance cooling system incorporating industry first "Cool Air Corridor" design
• Compact high-efficiency air filter - easy access, compact size and longer lasting
• Compressed air tanks for pneumatic brake and accessory needs
• Engineered to take full advantage of the inherent benefits of aluminum makes it the lightest bus in the industry
• Super single wide base tires
• Increased driver visibility and improved driver’s area features
• System-level designed for low cost of ownership
• Increased seating capacity with more forward facing seats
• Light weight thin profile seats - with light weight stanchions
• Light weight flooring material
• Engineered for ease of maintenance, longer life cycles, and reduced noise levels
• Lower accessory power draw
Putting It All Together
Altair Engineering has several software and service components that fit together nicely and work cohesively. There are few companies in any industry with the breadth and depth of Altair, much less the engineering sector. The key to Altair’s technical and business success, though, is the people it attracts, supports, and retains – both employees and customers. It’s the people who truly provide the platforms of innovation for Altair Engineering.
During the course of writing this article, I have developed an appreciation of the technologies Altair has developed, as well as the company itself and the way it does business.
As driven as Altair Engineering is for innovation, Mr. Scapa summed up things by saying that it must come from the business side as well as the technology side. “We continue to focus on IP-based businesses and encourage risk taking and innovation from everyone who works with us. We focus on what our people are good at and will succeed while encouraging perpetual change and reinvention.”
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