In 1962, President John F. Kennedy said that the U.S. does great things, like going to the moon, “not because they are easy, but because they are hard,” and “because that goal will serve to organize and measure the best of our energies and skills.”
In 1963, Richard MacNeal and Robert Schwendler founded MacNeal-Schwendler Corp., now known as MSC Software. The software they created, including NASTRAN (NASA Structural Analysis), has helped generations of engineers to do very hard things, both great and mundane.
In recognition of MSC’s golden anniversary, I asked Dr. Dennis Nagy, a highly-respected 40-year veteran of the CAE software business, for his reflections on MSC’s first 50 years, and his thoughts about what may be in store for the company in the future.
— Evan Yares, Senior Editor
The first 50 years
The MacNeal-Schwendler Corp. (MSC) was founded in Pasadena, CA, on February 1, 1963, by Dr. Richard “Dick” MacNeal and Robert Schwendler. With the Golden Anniversary of MSC (and coincidentally the 90th birthday of Dick MacNeal) imminent, it’s important to examine the history and future outlook of a company that created the NASTRAN brand of Finite Element Analysis (FEA) software and led, for almost a half century, the software market we know as Mechanical Computer-Aided Engineering (MCAE).
The key first milestone for MSC was winning a 1965 request for proposal from the U.S. National Aeronautics and Space Administration (NASA) to develop a general purpose FEA-based structural analysis program that would eventually become NASTRAN (NASA Structural Analysis), pioneering many of the technologies that are still relied upon by industry today to simulate stress, strain, vibration, dynamics, acoustics, and thermal analysis. In 1971, MSC released a commercial version of the public-domain NASTRAN, named MSC/NASTRAN, and grew slowly but steadily without need for outside investment. In the 1980s, MSC went public and became “king of the MCAE mountain,” continuing to grow profitably at a 25-35% annual clip until near the end of the decade. This financial cushion allowed MSC to invest in the complete re-write of the foundation of MSC/NASTRAN (the NASTRAN Executive System), a move that has helped MSC/NASTRAN remain viable, popular and heavily used through to today.
MSC did, however, have difficulty creating its own FEA pre-/post-processing software in the 1980s. This difficulty was one of the seeds of disruptive change for MSC in the 1990s, a decade of acquisitions and numerous management changes, including 5 acquisitions (Aries, PDA, MARC, UAI, CSAR) and 5 different Presidents/CEOs (Gloudeman, MacNeal, MacArthur, Curry and Perna). The disruptive changes of the 1990s and early 2000s (three more acquisitions and the launch of an unsuccessful new business line) led to what may be called “The great unraveling, privatization, and re-emergence from the ashes” era for MSC leading up to the present.
Despite some promising MSC developments on the technology/marketing front (in the areas of modern user environment, MCAE data management, and engineering process improvement), the business difficulties trumped the technology/marketing progress and took their toll on MSC’s public market reputation, employee morale, and corresponding financial results (flat growth and EPS losses). The MSC Board increased its efforts to find a buyer to take MSC private.
Symphony Technology Group (STG) acquired MSC in October 2009 for $360 million and installed Dominic Gallello as CEO. STG moved immediately to make MSC solidly profitable and outside observers speculated on what STG would do with this MCAE jewel. Initial speculation that STG would milk MSC for maximum profit in the very short term, and then sell off pieces of MSC to recoup their investment, proved to be too pessimistic. After more than three years, MSC has re-focused on its core MCAE business (mainly in the aerospace and automotive industries) with some consolidation of product packaging and small acquisitions in the acoustics and material modeling areas, while moving significant development offshore to India. Unofficial sources say that STG is content, for the time being, to run MSC very profitably as a significant (#3 or #4) MCAE player rather than try to recapture the MCAE market leadership MSC once had.
The next 50 years?
There is a general uncertainty in making any kind of half-century predictions—especially with the ever more rapidly evolving technology world in which MCAE is embedded, coupled with the kind of owners MSC currently has. Specifically, as mentioned above, a private equity firm like STG most likely does not own MSC for the “love of MCAE” and has, or will develop, a clear exit strategy within the next 10 years at most. There is still consolidation going on as market segments such as MCAE get merged into the larger, more integrated segments of PLM and general enterprise software/hardware infrastructure (witness the announced acquisition of LMS by Siemens PLM). Throw in “the cloud,” “open source/crowd sourcing,” mobile computing, highly interoperable apps, etc. and a lot will happen in the next decade.
MSC has made some modest statements on what it considers important, in the medium term, by acquiring two small Belgian companies, establishing a material properties testing partnership with market leading HBM/nCode, and agreeing to distribute a new CFD code. All of these align somewhat with the aerospace and automotive industries’ detailed simulation needs. What is still not apparent is whether MSC will pursue the converging fields of mechanical and electronics/embedded software simulation (mechatronics). But one thing is very clear: The coming years will be exciting and very dynamic.
Note: You can find a longer version of this article, with more detailed historical information, at www.designworldonline.com/msc-software-at-50.
Dr. Dennis Nagy is a 40-year veteran of international experience and accomplishments in all aspects of the engineering simulation (CAE) software business. Residing in Chapel Hill, NC, he currently provides global business development and industry/market analysis consulting to multiple CAE/PLM companies. Relevant to this commentary, he was Senior VP of Worldwide Sales at MSC.Software from 1985-97.