Don’t believe every rumor you read on the Internet, even if it’s Reuters reporting that MSC Software (MSC) will be purchased by equity Firm CVC Capital (CVC).
It turns out that the computer-aided engineering (CAE) software will be purchased by industrial and geospatial information technology company Hexagon AB.
But what does this mean for CAE users and the industry?
Who is Hexagon and What Do they Want with MSC?
Overview of Hexagon’s Industrial Enterprise Solutions. (Image courtesy of Hexagon.)
Some of Hexagon’s key businesses include:
- Intergraph, which offers enterprise engineering software for 3D design, control, construction planning, electrical design and data storage for the process, power and marine industries
- Brown & Sharpe, which focuses on metallurgical measuring, collection and assessment tools and technology
- Vero, which creates and distributes CAD/CAM and CAE software for the tooling, product engineering, sheet metal, fabrication and other industries
- Leica Geosystems, which offers geological scanners, sensors and interface equipment
- Hexagon Manufacturing Intelligence, which offers sensor hardware and CAD/CAM for intelligent manufacturing systems
MSC reports that it will be integrated into Hexagon Manufacturing Intelligence, due to the overlapping target customers between MSC and Hexagon Manufacturing Intelligence. The MI division offers manufacturing engineers process-oriented and design solutions for the automotive, aerospace, consumer electronics and various other industries.
“I would say the first tough point is manufacturing process simulation for welding and forming of parts and additive manufacturing, with their metrology, it’s a perfect fit,” said Gallello. “Where we will go form there we will see over time, as they have a broad technology and a lot of it we don’t even understand yet.”
Does MSC Have a Long-Term Future?
Expect the same MSC Software you know and love. Just with some extra bells and whistles under Hexagon. (Image courtesy of MSC Software.)
But what about the long term?
Well, one prediction made in last month’s MSC sales rumors we made correctly was that users have nothing to fear from the purchase. The initial plans are for the management team and staff to remain on board and that the MSC brand is here to stay.
“Hexagon has a track record,” said Gallello. “One of the things you discuss in these big acquisitions is a common philosophy. You discuss keeping the brand, management and team. Besides, Hexagon [is not made up of] CAE people. Generally speaking, with these large acquisitions, the brand stays and runs fairly autonomously, except where we can see synergies and opportunities.”
Additionally, reports from MSC state that one of the biggest benefits in the acquisition is for Hexagon to help MSC reach its long-term innovation and acquisition plans. The reports also note that Hexagon has no plans to sell the MSC portfolio for piecemeal.
“Our mission continues to be laser-focused on driving leadership in simulation tools, with solutions from materials to systems,” said Dominic Gallello, president of MSC Software. “We will continue to work toward delivering breakthrough value to our customers. Although our mission and roadmap does not change, we anticipate that our ability to offer additional process-oriented solutions from design to manufacturing will be enhanced by joining forces with Hexagon.”
But Hexagon is a big company; it has quite a lot of other applications that could shake up MSC. One point of note, according to Gallello, is in the development of autonomous vehicles.
“Our ADAMs multibody dynamics offering, and related applications, can simulate the behaviours of the vehicles,” said Gallello. “But with Autonomous vehicles you have to be dramatically smarter and work dramatically harder. Our trajectory for a complete offering for the autonomous world is rolling out step-by-step. With Leica Geospacial, there are probably things that they are doing with their sensors and that we are doing with autonomous cars. But we haven’t quite gotten there yet.”
Another potential path for MSC software, after this Hexagon purchase goes through, is into the Internet of things (IoT) and digital twin. Going down this path is a significant trend in the CAE industry, as seen by strategic moves made by Dassault Systèmes, PTC, Siemens PLM and ANSYS.
Hexagon’s series of industrial sensors and software would be a good fit for MSC if it were to go down the IoT and digital twin path. Comments from Hexagon’s president, Ola Rollén, certainly hint at such a future.
“MSC represents a game changer in our mission to deliver actionable manufacturing intelligence (MI), taking us another step closer to realizing our smart connected factory vision in discrete manufacturing industries, such as automotive and aerospace,” said Rollén. “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 PPM division.”
However, when asked about the matter, Gallello doesn’t see the IoT or digital twin as a path MSC will be taking in the near future.
“I think step one isn’t about IoT. I’ve been scratching my head a little bit on simulation and IoT and where the fit is,” expressed Gallello. “The truth is, IoT as a maintenance function, understanding there will be fatigue in 3 years, I’m not sure about tying [in] a simulation program.”
Perhaps as a stick to the gut of competitors walking down the IoT path, Gallello hit the IoT security sore spot.
“[A]re you a platform for building IoT apps or a platform for IoT security? What are there, 6 billioin devices out there that are unsecure? That’s kind of an interesting place to be. How does it relate to simulation? And we will just have to learn in that area,” joked Gallello.
So, will MSC pursue the IoT and Digital twin or is Gallello inserting a red herring? That will likely depend on how much of a foothold the IoT actually creates in the market.
The final prediction to be accurate in last month’s rumors was the selling price. The CVC deal was rumored at $800 million while the actual deal with Hexagon is valued at $834 million. This is a big return on investment from the of privatization of MSC at $360 million.
To read more on how MSC Software’s acquisition will shake up the industry, read: Why Engineers Should Care about MSC Software’s Acquisition Rumors.