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Jeff Rowe
Jeff Rowe
Jeffrey Rowe has more than 40 years of experience in all aspects of industrial design, mechanical engineering, and manufacturing. On the publishing side, he has written well over 1,000 articles for CAD, CAM, CAE, and other technical publications, as well as consulting in many capacities in the … More »

Hexagon’s Recent Ups & Downs Update

 
April 20th, 2017 by Jeff Rowe

A lot has gone on in the past couple months at metrology giant Hexagon AB, so let’s have a look.

For starters, Hexagon AB, announced recently that it was acquiring MSC Software Corp. for $834 million cash. While not quite as big, the acquisition is Hexagon’s largest deal since it bought Intergraph for $2.1 billion in 2010.

MSC Software is the the company that has brought products that include Nastran, Patran, Marc, and Apex to market. For more than 50 years MSC has been a leading provider of CAE solutions, primarily simulation software for virtual product and manufacturing process development, and was one of the first 10 commercial software companies.

As I noted when the acquisition was first announced, acquiring MSC provides Hexagon with a strong foothold in the competitive simulation/analysis market with MSC’s diverse portfolio of CAE applications.

Hexagon: Shaping Smart Change

As it has with all recent acquisitions, Hexagon plans for MSC to run as an independent business unit within the Hexagon Manufacturing Intelligence (MI) division, that focuses on automotive, aerospace, machinery, consumer electronics, and other discrete manufacturing markets, getting close to offering comprehensive end-to-end solutions in these diverse workflows. About the only link missing is a true CAD component and I can think of several possible targets for closing this gap.

Process-oriented solutions are essential for manufacturers, and MSC’s applications definitely address design and engineering processes through simulation and analysis.

Hexagon’s President and CEO, Ola Rollen said, “MSC represents a game-changer in our mission to deliver actionable manufacturing intelligence, taking us another step closer to realizing our smart connected factory vision in discrete manufacturing industries such as automotive and aerospace. We can now leverage the data our MI division is generating to improve design choices and processes upstream in the workflow. The acquisition will also open up new markets and touchpoints for MSC via our Process, Power & Marine division.”

Hexagon AB is built upon three major business units: Leica Geosystems, Intergraph, and Hexagon Manufacturing Intelligence (HMI). MSC will be integrated within HMI, because of the obvious overlap in customer base between the two groups. MSC will operate independently while coordinating with other functions and business units to execute on technology and commercial synergies.

For some time, MSC Software’s stated intent has been to “revolutionize” simulation. I don’t know if I’d go that far; however, I would agree that its products have definitely transformed some things in an area (CAE) that has been calling for some wake up and shake up.

As to whether the acquisition was a good decision, you need look no further than the market value of Hexagon, which went up $811 million in value the day of the announcement. The acquisition will further strengthen Hexagon’s smart connected factory strategy to deliver enterprise solutions within manufacturing verticals, including a burgeoning vertical – additive manufacturing.

Finally, with the CAE acquisition of MSC Software, could this be the gateway to a big CAD acquisition to further round out HMI? Purely speculative, but I would say yes, CAD is Hexagon’s next conquest, and it won’t be a low-tier player.

Now, On To Hexagon Legal Matters . . . 

This is something intriguing that I have been following since last fall, and despite an insider trading charge, Ola Rollen, Hexagon’s CEO has vowed that he will stay in the job.

Hexagon CEO Ola Rollen said last month that he would not give up his job and laid out a detailed defense against charges over insider trading brought against him by Norwegian prosecutors.

Rollen, who has led Hexagon since 2000 and turned it into one of Sweden’s biggest companies with a market value of more than $13.5 billion, said he had considered resigning shortly after his arrest last October.

More recently, though, he’s changed his tune. “This is the time to remain CEO,” Rollen said. “It is simply not on the agenda to slow down. Hexagon deserves full attention, and it is going to get it.”

Norwegian prosecutors said in March that they were charging Rollen with insider trading in connection with an investment in Norway’s Next Biometrics ASA in October 2015, a transaction which did not involve Hexagon.

Rollen denies any wrongdoing and tweeted a link to a website dedicated to his case, and his lawyers are convinced the court would conclude that the case lacks merit.

The allegations concern an investment made in Next Biometrics in October 2015 by Iskossala Ltd, Rollen’s private investment firm, which bought shares on behalf of Greenbridge Partners Ltd, a company co-founded by Rollen.

A date for the trial has not yet been set, but Rollen’s lawyer said the case trial would likely begin this autumn.

This will be an interesting case as things unfold and play out, especially in light of the fact that Hexagon’s North American user conference takes place in June in Las Vegas.

The History of CAD, CAE, FEA, CFD, etc.

On LinkedIn, I came across a very interesting story, actually a graphic map, of the history of our industry (or at least a big part of it).

It was created by Jim Shaw, managing director at Fastway Engineering. It’s a valiant attempt to chart the history of engineering software. The interactive map isn’t perfect, and has some holes in it, but it’s a great start.

This is a great opportunity for the MCAD community to collaborate and contribute to this ongoing project as a living historical document that would benefit the greater engineering software community.

Check it out here: The History of CAD, CAE, FEA, CFD, etc. Interactive Map

Arrange A Video Interview With Us At Upcoming Conferences and Shows!

MCADCafe has a busy trade show run coming up the next couple of months, including:

If your company is attending any of these events and you want to arrange for a video interview that will appear on MCADCafe, contact me at jeff@ibsystems.com or call me at 719.221.1867. We can also provide customized marketing packages so you can get the most positive exposure for your interview.

Hope to see you in person in coming weeks as we go on the road!

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2 Responses to “Hexagon’s Recent Ups & Downs Update”

  1. Richard E. says:

    Hi Jeff,
    are you really convinced about Hexagons approach to buy a CAD component or whole company?

    It’s not that long ago the bought Vero Systems with it’s Visi brand of CAD software.
    Based on one of the industry standard kernels Parasolid it is a comprehensive CAD system they already own.

    Buying another CAD system might cause cannibalization or on the other hand create additional effort to spend in CAD.
    And my idea is that CAD is not Hexagons primary focus.

    Anyway, the future will tell about this.

    Not to forget: thank you for you work, i always enjoy reading your blog.

    Kind regards,
    Richard

    • Jeff Rowe Jeff Rowe says:

      Historically, CAD has not been Hexagon’s focus, but neither was CAM, until they bought Vero Systems, or a simulation company before they bought MSC Software, or plant design before they bought Intergraph. I think Hexagon will continue to diversify by ultimately acquiring a CAD company. This will allow the company to have the entire product development process covered — design/engineering, simulation, manufacturing, and inspection.

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