CD-adapco: strong growth seeding the cloud

CD-adapco announced at its London user event that it was growing very nicely in spite of a global recession, has a succession plan in place and is adding additional licensing options to its StarCCM+ offering.

Steve MacDonald, President and co-founder of CD-adapco, has for years been the front-man of the company and many have expressed concerns over his eventual retirement. Like Michael Korybalski at Mechanical Dynamics, Jim Meadlock at Intergraph and countless other visionary CEOs, he guides his company at a very personal level and has had final say on everything from product development to sales and every other aspect of the company. Even so, CD-adapco has been working to build out a professional leadership team that did not depend on Mr. MacDonald. At last week’s STAR meeting he “teased the audience about his advancing age and named Bill Clark as his successor as President, if and when he should ever decide to retire.” That’s not likely to happen soon, as Mr. MacDonald clearly enjoys the limelight, but it’s smart to start putting people at ease with the new team.

In keeping with that theme Mr. Clark, currently SVP of Worldwide Sales, gave the opening address at the conference and said that CD-adapco had maintained an average of 16% organic year-on-year revenue growth over the past 5 years. The company is privately-held and does not disclose its financials; we believe it to have revenue of about $75 million. A 16% annual growth rate is impressive; growing at that rate without acquisitions is doubly so and speaks to CD-adapco’s ability to expand outside its core automotive vertical and the adoption of its new-ish STAR-CCM+ product.

Also at the user event, CD-adapco announced a new licensing scheme for its STAR CCM+ product called “Power-On-Demand”, which allows users to run simulations using on-demand cloud computing service such as Amazon EC2, SGI Cyclone or any public, private or hybrid cloud. Power-On-Demand allows analysts to use STAR-CCM+ by the hour, on an unlimited number of cores and number of sessions at what the company characterizes an “attractive rate”. This is intended, initially, to offer users additional capacity in a crunch, but may become the mechanism of choice for companies not wanting to depend on their own hardware.

It’s a slightly different take on the cloud. Many vendors are positing cloud computing-by-the-drink, with each “drink” of software costing a fixed amount; the greater the usage, the smaller the cost of each drink. Under CD-adapco’s plan, each license would have access to unlimited computing resources (whether on a user’s own cluster or an external cloud) and would be allowed to run an uncounted number of sessions, concurrently or not. It’s an interesting idea that’s designed to promote more usage of CFD since each use will no longer be independently priced.