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CD-adapco EVP Bill Clark talks about business, strategy, products, customers, the market, and competition

In this interview, Executive Vice President, Bill Clark, discusses CD-adapco's business, strategy, competitive advantage, market perspective, and perspective for the future.

From the first moment, Bill Clark is an easily approachable individual. This comes through in this open, wide-ranging interview. He discusses without hesitation all topics from company employees to competitive challenges to customer benefits the company strives to deliver.

CD-adapco : the company and it's business

We start with the topic of company market share and business growth. The company will attain around $200 million in revenue this year and the revenue is split at 85% CFD revenue and 15% services and support.  The company strategy includes reinvesting a very large portion of revenue into product development. Mr. Clark indicates that the current investment into developing their simulation tools is 35% - 40% of revenue. The trend in annual revenue growth ranges between 13% to 15%. This is organic growth from the company and not through acquisition.  The 15% organic growth rate is much higher than the growth in 3D CAD tools and indicates the significant demand for simulation tools in today's design and engineering environment, especially high-end tools.

Currently the company has 485 employees. Employees have been growing at the level of revenues or higher. This year, the company intends to slow hiring to around 5% growth in employees. Mr. Clark indicates that this is a practical issue since the growth of the company has been rapid and there is a need to prepare for the next phase of company development. 

Bill Clark on the simulation business, customers, competitive advantages, and STAR Global Conference take-aways

Market share, competition, and consolidation :

The company's direct competition includes Ansys with their Fluent and CFX products and the open-source product OpenFOAM. After these two, there are niche offerings which address very specific demands or specific customers such as those with entry-level simulation needs.

As an aside, Mr. Clark mentions that CD-adapco's "CFD" revenue is significantly more than CFD as the company offers eletro-magnetic, aero-acoustic, and structural simulation capabilities.  This matches well with their push to be a multi-disciplinary simulation platform. 

When addressing CAD companies and the integration of simulation products into their suites, Mr. Clark remains practical. Will some customers adopt  simulation products integrated into CAD product suites? Surely some will. On the other hand, the STAR-CCM+ customers will remain those looking for cutting-edge tools, with integrated simulation and analysis work-flow capabilities. He confidently asserts that their primary competitive advantage is customer care and service and he adds, therefore, that a CAD companies cannot match the deep domain knowledge and expertise that CD-adapco has developed over thirty years.

From my perspective, the segment addressed by each of these approaches - integrating simulation into CAD suites as well as pushing the limits of the simulation platform - will continue to grow. In that respect, the approach of CD-adapco, which is to push the envelope in simulation and address complex, multi-disciplinary simulation issues is a focus which will continue to benefit the company for the foreseeable future.

He acknowledges the consolidation of the CFD simulation market in recent years and notes how that has reduced the number of independent simulation providers. Additionally, he comments that more than one company would be interested in a customer base  and a technology as rich as his company's.

The biggest differentiation to CD-adapco competitors includes CD-adapco's business model which is focused on making their customers successful - which makes the company's people one of their most important asset. The second differentiation is the licensing model and the innovative ways CD-adapco provides customers access to their technology. and licensing models.  In my opinion, the company has found and focused on two competitive advantages which reinforce each other. Not only does the company have innovative licensing models, CD-adapco sells annual licenses and refuses to sell perpetual licenses. This is a perfect match for a company which is vested in the success of its customers since an unsatisfied customer can "walk away" at any time.

STAR Global Conference take-aways:

Bill Clark wants attendees to leave the STAR Global Conference understanding that the company is committed to customer success & technology advancements. In addition, he wants customers to see that CD-adapco is growing beyond it's original CFD and CAE roots. This can be seen in the company push into multi-disciplinary design exploration. Mr. Clark points out that simulation is not the end-goal for the customer. The customer's objective is to make the product or design better. His company wants to be a part of that process.