It’s been quite a year — like most, filled with stuff both good and bad. My top 10 happenings, all related to engineering software:

1. Hit: The CAE vendor landscape changed dramatically, as ANSYS bought Ansoft and
expanded its applications footprint even further; Autodesk acquired a number of companies
from Moldflow to ALGOR in a quest to bring CAE to a much wider audience; and as
Dassault Systèmes acquired Engineous to strengthen its high-end CAE and data
management capabilities. It will be interesting to see how the high end/specialist-caliber
products evolve amidst huge pressure to make advanced capability more accessible to
casual users.

2. Hit: License models are changing to accommodate difficult economic times and to
acknowledge the fact that no one vendor can have a "lock" on any account. There are a
number of smaller hits within the bigger topic: token models (in many forms) are taking off,
with Altair Engineering’s being perhaps the most flexible because it includes partner
products in the overall suite of software accessible via tokens. Shared licenses, bundled
packaging and innovative pricing are going to be BIG in 2009 as vendors and buyers
struggle with tough times.

3. Hit: CAD and CAE software (or at least their end-products) are entering into the
mainstream of public consciousness. At AU, I spoke with the folks from Z Corp who
believe that their rapid prototyping machines (which make physical objects directly from a
CAD model) will hit it big when anyone can go online to craft an avatar, give a credit card
number and get a one-off representation in the mail a few days later. Who knows where
this will lead? Surprised parents the world over may realize that they can make prototypes
of their widgets, buildings, furniture – whatever they make – in a matter of moments. How
cool is that?!

4. Hit: Compute clusters enable simulation of massive problems, as demonstrated by
ANSYS’ America’s Cup sail and Siemens PLM’s bending airplane wing. Many of these
tests are still just that, answering the "can it be done?" question. But compute power is
now so cheap, storage and interconnectivity getting so adept, that it’s only a matter of time
before solving massive problems becomes routine. This will massively change how
companies use CAE and design their products – but see number 5.

5. Miss: None of the manufacturers I’ve spoken with this year believe they are taking full
advantage of the tools and infrastructure they have, let alone pushing the envelope. They
should be using CAE to test more concepts – but are still mostly using it to avoid only the
most egregious customer problems. Instead of seeking to create a low-risk product, these
tools should be used to make the best, most innovative products. Why? it’s easier to
quantify warranty costs avoided than the market advantage of a truly innovative product.

6. Miss: Partisan politics once again sabotaged U.S. science and technology research
funding in 2008, and the state of the economy doesn’t indicate that we’ll see much more
spending in 2009. As Burt Rutan said at the Autodesk University Manufacturing keynote
(and I paraphrase): we’re boring our kids. We need to do something dramatic, difficult and
energizing to drive growth in the economy and bring more scientists and engineers into the

7. Hit? Miss?: Can’t decide. Acquisitions that made the headlines this year (except
Moldflow) tended to be small – what some call "technology tuck-ins" – in part because all
acquisitions are risky and smaller/cheaper minimizes the damage if things go badly. There
are plenty more small companies with excellent technology, people and customers. The
hit: many of theser smaller companies are doing just fine right now (although 2009 won’t be
easy). The miss: being acquired may not work as an exit strategy right now, given credit
and stock market problems.

8. Miss: I’ve been to a number of user conferences and analyst events in recent months.
One common thread: almost all in attendance are male, almost all over 40. Tied to number
6: the brain drain in technical computing (users, developers, industry analysts) is going to
be a massive problem when we all decide to chuck it and become wind-power

9. Hit: Many software companies are aggressively tuning their products for the kids
graduating now, who have held a computer mouse since they were old enough to sit up,
and grew up on Nintendo. Factor in the knowledge-capture data management tools, and
we may be able to salvage some small portion of the expertise retiring daily.

10. Hit: The virtual and physical worlds are closer than ever. Realistic simulation of the
final product, its stages in manufacturing (using CAE to simulate the product and/or
factory floor simulation for the manufacturing process) and even design concepts using
styling tools are bridgint the gap between the designer’s brain and the final product. That’s
good – let the days of simplifying designs into black boxes be gone.

I’ll be back soon with a 2008 market growth estimate and forecast for 2009. May your 2009
get off to a good start!