Ansys Aids Innovation With Its Simulation Software; The company that dominates simulation software expects to earn $900 million this year

Ansys Aids Innovation With Its Simulation Software

By Ashlee Vance on March 07, 2013

Jim Shaikh’s first son, Danial, arrived six weeks early, weighing all of 3 pounds and in need of milk every two hours. In the middle of the night, Shaikh would wake up, retrieve breast milk from the fridge, and begin warming the bottle in a pan of hot water on the stove. “Sometimes I would fall back asleep, and everyone upstairs would be screaming at me,” Shaikh says. “Other times I would overheat the milk. I just wasn’t very good at it.”

Shaikh, an engineer who previously helped design cars for BMW (BMW), decided to invent his way out of any paternal inadequacies. He conceived of a bottle to heat milk instantly to a specified temperature and was able to test it without building prototype after prototype. Instead, Shaikh largely brought his product to life digitally, using software from Ansys (ANSS), a Canonsburg (Pa.)-based company that has quietly cornered the market on manufacturing simulation. Ansys’s models showed Shaikh how different plastics would behave when heated up and how varying nipple designs would affect milk flow. “Everything is simulated these days,” says Shaikh.

Since its founding more than 40 years ago, Ansys has become the largest producer of simulation software, which costs thousands to tens of thousands of dollars, depending on the simulation. The company’s staff of more than 2,400, including 600 Ph.D.s, has created algorithms that mirror the laws of physics, allowing Ansys programs to model virtually anything. Ninety-six of the 100 biggest industrial companies, and 40,000 customers in all, use Ansys technology to evaluate product mater-ials and durability. Experienced engineers who once had to produce dozens of mock-ups to arrive at a final product now need a handful at most, saving time and money. Work from computer-aided design (CAD) applications can be fed into the simulation software.

The software grew out of work done decades ago within the nuclear research group at Westinghouse Electric, which needed a way to model how reactors would withstand stress and unforeseen events such as earthquakes. Ansys was founded on the belief that such tools could be applied to other industries. Shares of the company have increased more than 2,200 percent since it went public in 1996 and hit a high of nearly $79 on March 6. On Feb. 28, Ansys reported 2012 revenue of $807.7 million, up from $701.1 million a year earlier, and this year the company expects to sell about $900 million in software.

Courtesy NatAir Travel: Cylindrical lines model the pressure on an airplane’s fuselage

Shaikh started developing his baby bottle with Ansys software in 2007 and arrived at a finished product, the Yoomi, two years later. Instead of surrounding a bottle with hot water and heating all the milk at once, the Yoomi uses an internal heating element to warm milk passing through a channel as the baby sucks. “The channel is the key,” Shaikh says. “You have to extract as much heat as possible in a certain period of time. It’s a problem of flow and heat transfer.”

After loading a computer design of the bottle shape into Ansys, Shaikh and three other engineers selected different types of plastics from drop-down menus, and the software showed them how well each one would retain heat. They also modeled the milk’s flow in different designs, discovering that air trapped inside the bottle would impede the milk flow and affect its temperature.

Engineers once needed expensive, super-high-powered computers to run these types of tests, but now a laptop can handle the work. Shaikh and his team would settle on a design and then order Ansys to run hundreds of simulations, tweaking myriad parameters. Only when all that was done and they had settled on ideal specifications would they spend the $1,500 to build a physical prototype. “I don’t think we would have ever gotten there without the software,” Shaikh says.

Courtesy HeadSports: Testing how a racket bends when hitting a ball helps prevent shattering

Head Sport, an Ansys customer, has a simulation team set up in an Austrian lab, where it designs tennis rackets for players such as Novak Djokovic. “Without simulation, we could never be sure before that we were pushing a mater-ial to its limits because the number of prototypes needed would have been too enormous,” says Stefan Mohr, Head Sport’s research and development manager. “Now we can get closer and closer to the boundaries of the laws of physics.”

Each year, Head designs 30 to 40 prototype rackets and seeks to give each one unique properties such as the materials they’re made of or how stiff they are. With Ansys, it can simulate a ball approaching the racket and then model the frame’s immediate response or long-term wear. “We’re using genetic evolutionary algorithms to build a stiffness optimizer,” Mohr says. “We test 10 million possible rackets.”

Courtesy NvidiaVideo Gaming: Weak points in 3D glasses are revealed by the red and orange stripes

Although rival modelers don’t have the range of Ansys’s software, a handful of companies sell modeling software for specific industries. Pete von Behrens, the chief technology officer at the solar power startup GlassPoint, is a self-taught engineer who uses an Ansys rival called Solidworks. This type of technology has made dramatic recent improvements, he says, essentially giving a single engineer the tools to do a team’s worth of work. “We’re doing stuff that would have been impossible 10 years ago,” Von Behrens says.

Design experts say they worry that young engineers now place too much emphasis on simulation and not enough on knowing how to build physical objects. Ultimately, it’s an engineer who establishes the constraints of the software, and setting the simulation parameters requires awareness of the physical world’s complexities. “It will make a good engineer great,” Ansys Chief Executive Officer Jim Cashman III says of his software. “It won’t make a bad engineer good.”

The bottom line: The company that dominates simulation software expects to earn $900 million this year. It would be an 11 percent jump.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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