Is it possible that after more than 50 years, the engineering simulation software market is still trying to cross the chasm?
The ASSESS Congress is a highly visible part of the ASSESS initiative, which exists to “…facilitate a revolution of enablement that will vastly increase the availability and utility of Engineering Simulation“.
I arrived at ASSESS 2018 with full recognition of this community’s desire to democratize engineering simulation technology. There are many ASSESS activities and objectives beyond democratize, but this one grabs my attention because it resonates with a Cambashi market estimate from a couple of years ago – there are about 750 thousand users of engineering simulation software in the world, from a potential user base of about 8 million.
Only 9.3% of potential users who are actual users? That leaves over 90% – 7.25 million people – whose work would benefit from use of engineering simulation software.
The democratize concept is explained succinctly on the revolution-in-simulation website, as follows:
“Advanced simulation should be safely accessible to everyone – not just the experts.”
The word “safely” in this definition captures democratization challenges beyond ease-of-use and licence costs. Today’s engineering simulation systems are generally complex and suitable for use by experts. This is not due to laziness of the software developers! There are a number of reasons which mainly reflect the limitations of the underlying technology.
For example, automatic preparation of simulation models works well in many cases, but sometimes an expert will eyeball the models and see potential problems. Something similar is true for the calculations and results – simulation software’s capability to estimate error bars is not universally robust. So some outputs need review by experts, who will notice some pattern, or something unexpected in the results, and will want to investigate further to make sure the result is not an artifact of the simulation.
The problem of course is that unless it is possible to classify problems into ‘simulation-problem-free’ and ‘might-have-a-problem-in-simulation’, it is necessary for experts to be hands-on or at least supervise, the simulations. So, just like the early days of engineering simulation software, experts continue to be the main buyers and users of the software.
These are technical barriers, and many people, including ASSESS delegates, are working hard to overcome the limitations.
But I’d like to focus on a non-technical barrier.
Geoffrey Moore’s book “Crossing the Chasm”, first published in 1991, provides a way of thinking about technology market growth. A reader’s takeaways at https://themarketingstudent.com/crossing-the-chasm-summary/ introduce the core concept: there is a gap between early stage buyers (innovators and early adopters), and the majority of buyers. “Crossing the Chasm” discusses this gap and points out that the majority of buyers discover, investigate and make technology investment decisions in a very different way to those who buy during the early stages of the market. To transition from successful growth by selling technology to the early stage buyers, and long-term success by selling technology to the majority, providers must recognize this difference, and change their sales and marketing approach. If they do this, they can ‘cross the chasm’.
I have seen numbers between 5 and 25% justified as estimates of the size of the early-stage market, and undoubtedly this number is different in different market segments. But at first glance, Cambashi’s recent estimate of take-up, 9.3%, is at least broadly in the expected pre-chasm range.
But the engineering simulation software market has been in existence for over 50 years. Is it possible that in all that time it has failed to cross the chasm?
New data points
One of the great achievements of the ASSESS initiative has been to attract individuals and organizations from both sides of the provider/user divide, with a range of roles from executive to hands-on on both sides. These delegates interact within the agenda framework of presentation, small group discussion and informal networking time.
Of course, the range of subjects covered at the ASSESS Congress is large, for example, two sessions each for working groups addressing specific sub-topics within the scope of the ASSESS initiative.
But I am going to pick just two data points.
The first came from a well-informed leader of engineering simulation for a global manufacturing company. He said his company had never seen a simulation software sales person take the initiative to drive a business or strategy conversation.
The second came from another well-informed person with similar responsibilities for a different global manufacturer, who articulated the perception of engineering simulation in their company by quoting a project manager at that company “….no-one understands what those analytical science people do anyway. Let’s just do the physical testing, everything changes when we get the test results.”
Extrapolate or interpret?
So I’ve got three data points, one from Cambashi’s market numbers, and two from experienced practitioners.
It’s hardly a survey, it’s definitely not a stratified sample. But the existence of ASSESS with its goal to extend the use of engineering simulation is in effect another data point, and, given the wide-ranging participation in ASSESS, perhaps this data point deserves to be weighted.
But the helpful interpretation is that significant parts of the engineering simulation software segment are stuck in the early phase. The innovators and early adopters who make up somewhere between 5 and 25% of the total market are today’s buyers, as they have been for 50 years.
There will always be a role for experts. For example, each incremental simulation technology step, especially if it is integrated into established software, needs validation. Like test pilots, it has to be simulation software experts who explore the envelope, find the safe zones and define standard operating procedure.
There are also some steps which software providers can take to make sure they are not stuck selling only to the early stage market, for example:-
- Find and promote examples of business benefit which are not only inside engineering and product development
- Cost reduction is a key message outside the early stage buyers, so case studies showing savings are important.
- The savings need to be the result of simulation studies
- Manufacturing and warranty costs are widely applicable areas where joining up the dots to show cost savings connected to simulation studies is easiest.
- Encourage pioneering users (yes, the experts!) to find new ways to use simulation, especially where this makes the results relevant outside of engineering and product development
- Many marketing teams use screen shots of simulation studies as a way to enhance the corporate image.
- Many HR teams will point out the advanced technology used in engineering to job applicants across all functions
- Can sales or support teams use engineering simulation in any of their customer interactions?
- Can production and distribution use engineering simulation to investigate options and optimize activities?
- Train and encourage sales people to drive business and strategy conversations
- Internet of Things projects provide fertile ground to discuss the role of simulation in digital twins
- Examine existing collateral including demonstrations to identify the strategic and business value elements
- This needs a ruthless approach to the “So what?” question.
- If benefits are solely in engineering, the executive response will be that this is ‘just engineering tech’
- If not many business and strategic benefits appear in existing content, launch an initiative to identify and articulate these aspects, and work with the sales and marketing teams to integrate these points into campaigns, collateral and demonstrations.