Can CAE Vendor Consolidation Still Meet Engineering’s Needs ?

CAE vendor consolidationEngineering teams and IT managers have been at constant odds with each other over vendor consolidation. IT wants to reduce costs by consolidating applications, Engineering wants best-in-class tools for specific tasks at hand. Over the past fifteen years, Engineering has had their way, and the IT organization has been left with a web of suppliers and tools to manage.

Well, the times they are a-changin’, and you better believe the corner office is paying attention. A recent study by the Aberdeen Group reveals that companies who have consolidated their CAE tools onto a simulation platform are 50% more likely to see a decreased in TCO. For a full report by Aberdeen Group and discussion with an industry analyst, register for the upcoming webinar, Simulation Consolidation: Less is More in Product Development. In the meantime, here’s my take on the trend…

IT groups are under more pressure than ever to reduce costs. They are consolidating data centers, virtualizing, and outsource IT infrastructure and a fervor pace. They are also driving a reduction in the number of supported applications and software vendors. Having too many CAE vendors takes a toll on the income statement. According to a worldwide study by the Everest Research Institute, concentrating on fewer vendors can save as much as 22 – 28 % on an annualized basis. The savings are due to streamlined vendor management, reduced number of contract negotiations, and increased procurement leverage.

But the benefits of reducing the number of CAE vendors doesn’t end with IT’s P&L. Engineering teams are also seeing value in a consolidated CAE platform. The key drivers behind the change in mindset are:

  1. the increasing complexity of high-end simulation workflows,
  2. the coordinated deployments of simulation across multiple disciplines, and
  3. the democratization of simulation and its usage in early development stages.

To address these objectives with 10 or even 20 disparate software tools requires a significant investment in integration. Although engineering teams have become particularly adept at doing this with in-house scripts and other software components, there are material costs in developing and maintaining the integration. For example, using the widely-accepted COCOMO cost model for estimating software projects, 100,000 lines of integration source code with 10% re-factorization per year would cost 521 man-months to develop and 52 man-months a year to maintain. These are resources that don’t directly contribute to Engineering’s primary function — making decisions about how to better design or manufacture the product. In today’s highly competitive and global markets, and when engineering teams are being asked to do more with less, engineering managers are motivated to decrease the overhead of integrating tools.

There is also an external force driving the trend towards a consolidated simulation platform. That is, the CAE market itself has been consolidating. Take ANSYS as an example. Through organic development and a number of strategic acquisitions, ANSYS now provides advanced simulation technology in all the major engineering disciplines, including system-level simulation and embedded software development. We have spent thousands of man years integrating these tools together, so our customer don’t have to. Best-in-class integrated tools for less engineering overhead and reduced IT costs…. Now that tastes great and is less filling.