Porter’s Five Forces Analysis of ALTAIR
|Industry||Simulation Software and AI|
|Headquarters||Troy, Michigan, United States|
|CEOs||James R. Scapa|
|Revenues||USD532.18 million (2021)|
|Loss||USD 8.79million ( 2021)|
|Competitors||ANSYS, Rockwell Automation, Autodesk|
In a world that is becoming more connected, Altair, a provider of solutions for data analytics & AI, computer-aided engineering, and high-performance computing (HPC), enables the design and optimization of high performance, cutting-edge, and sustainable products and processes. Up until 2004, the company’s consulting services generated the majority of its revenue. Then, the selling and licensing of software replaced that.
Porter’s Five Forces Analysis:
Porter’s Five Forces Analysis is a popular framework for examining business strategies in light of the industry in order to lessen rivalry and increase profits. It was developed in 1979 at Harvard Business School by Professor Michael E. Porter.
Altair Rivalry among Existing Competitor
A leading provider of software and cloud solutions for simulation, high-performance computing (HPC), data analytics, and artificial intelligence, Altair Engineering Inc. (AI). There are two reportable segments that it has identified: Software and Client Engineering Services’ revenue makes about 85% of the total. Following is a breakdown of the revenue by region: USD 124.19 million from Europe, the Middle East, and Africa, and USD 271.59 million from America Asia Pacific: USD 136.40 million.
Altairs had been losing money for years; as a result, in 2017 it built a deficit of USD 166.50 million, which it reduced to USD 102.09 million in 2021. Due to its extremely high operating costs relative to its income generation, the company is still consistently producing a net loss of USD (7.54) million, USD (10.50 million), and USD (8.79 million in 2019, 2020, and 2021, respectively. Its revenue has been steadily rising, totaling USD 458.92 million in 2019, USD 458.92 million in 2020, and USD 532.18 million in 2021, respectively.
ANSYSInc develop and market Software and services for engineering simulation. The following geographic divisions make up its business: the United States, Japan, Germany, South Korea, France, China, Other EMEA, and Other International. Automotive, aerospace and defence, building, energy, materials and chemical processing, autonomous engineering, and electrification are among the industries for which the company offers solutions. John A. Swanson established the business in 1970.Its revenue for 2019, 2020 and 2021 is USD 1.52 billion, USD, 1.68 billion and USD 1.91 billion respectively, and net profit is USD 451.30 billion, USD 433.88 billion and USD 454.63 respectively.Its revenue growth is enough to meet its operating expense and generate net income.
Industrial automation and information services are provided by Rockwell Automation, Inc. Architecture and software, as well as control products and solutions, are how it runs. The integrated control and information architecture of the segment’s architecture and software includes hardware, software, and communication components that may interact with the customer’s commercial enterprise and govern their industrial processes. The Control Products and Solutions section combines application knowledge, project management skills, and a portfolio of industrial control and intelligent motor control products. The business was established in 1928.It reported sales of about 3.3 billion US dollars from the Intelligent Devices division in the fiscal year of 2021, and its overall revenue was close to USD 6.90 billion.
Software and service design is what Autodesk, Inc. does. Autodesk 360 cloud services, AutoCAD civil 3D and LT, 3Ds Max, Maya, and Revit are some of its products. The firm also offers development and manufacturing software, which provides manufacturers in automotive, transportation, industrial machinery, consumer products, and building product industries with comprehensive digital design, engineering, and production solutions; and digital media and entertainment, which consists of tools for digital sculpting, modelling, animation, effects, rendering, and compositing for design visualisation, visual effects, and games production. John Walker established the business, which has its headquarters in San Rafael, California, in April 1982.
In the fiscal year 2021, the Architecture, Engineering and Construction segment of Autodesk achieved the company’s largest income, estimated at roughly 1.6 billion dollars. In that year, the AutoCAD and AutoCAD LT division produced about 1.1 billion dollars. The Americas was the most profitable region for Autodesk during its fiscal year of 2021, generating revenue streams of over 1.54 billion dollars. Africa, the Middle East, and Europe came in second place, bringing in almost 1.47 billion dollars for Autodesk.In the fiscal year 2021, Autodesk Inc.’s net income came to just under 3.8 billion dollars.
Altair Threat of New Entrants
Time to become establish: The technology industry is constantly evolving at a rapid rate, making it difficult to maintain competitiveness for an extended period of time. As a result, there is always a chance of new players and competition. While ANSYS, formed in 1970, has been able to multiply its revenue compared to Altair and further in the case of AWS, Altair, launched in 1985, has not been able to develop much in terms of revenue. Known now as cloud computing, Amazon Web Services (AWS) started providing IT infrastructure services to businesses in 2006 through web services. Since then, its income has increased from USD 3.11 billion in 2013 to USD 62.20 billion in 2021.
Government Regulations: In the world, Altair has more than 80 published patent applications and 274 issued patents. These patents and patent applications aim to safeguard exclusive innovations that are important to our business. Additionally, our intellectual property rights are not as well protected by foreign law enforcement as they are by American law in the many nations where our products are sold. Our company could suffer if we are unable to defend or enforce our intellectual property rights. Any substantial violation of our fundamental intellectual property rights could be detrimental to our operations or our ability to compete.
Altair Bargaining Power of Suppliers
Altair has Technology partners that can have greater influence on the Altair as the size of those supplier is big and they are premier partnerfor example AWS, Dell, Intel and Microsoft. Some providing core services but are small in size for example Acrome, and BluePrism
Altair Bargaining Power of Buyers
Although the majority of their clients are market and revenue giants who may have a significant impact on Altair, because of the product’s highly technical, customised, and sophisticated nature—and because its price is so small compared to the total cost of the goods their clients produce—clients lack bargaining power. Further Worldwide, Altair had more than 12,000 clients as of December 31, 2021. Large manufacturing corporations make up the majority of its simulation and HPC clients, however small and midsize businesses are also becoming more prevalent.
Our AI customers include banks, credit unions, BFSI, and health care organizationsalong with finance departments across most industries including manufacturing.Automotive and aerospace combined account for approximately 41% of our 2021 billings, including 15 of the world’s leading automotive manufacturersand 10 of the world’s leading aerospace manufacturers. Other important industries include heavy machinery, rail and ship design, energy, government, lifeand earth sciences, BFSI, and consumer electronics. No single customer, nor any of our resellers and OEMS, accounted for more than 2% of our 2021software billings. In 2021, we generated 38%, 30% and 32% of our total billings from customers in the Americas, EMEA, and APAC, respectively.
Altair Threat of Substitute Products or Services
Customer Facilitation / After Sales Services: Altair engages with its customers to provide advice, implementation services, training, and support, particularly when applying optimization, in order to guarantee customer success and strengthen connections with them. We think that these services, along with our capacity to use HPC as the market shifts to cloud computing, positions us for success in the future.
Uniqueness of Product functionality: Altair engages with its customers to provide advice, implementation services, training, and support, particularly when applying optimization, in order to guarantee customer success and strengthen connections with them. We think that these services, along with our capacity to use HPC as the market shifts to cloud computing, positions us for success in the future.
Product Range: No one rival is able to address our whole solution set, in our opinion, due to the breadth and depth of Altair’s software offering. This benefit is further extended by the units model thanks to the expanding APA market for third-party software.
Acquisitions: Since 1996, Altair has purchased 43 businesses or strategic technologies, including 24 in the previous five years. Strategic intellectual property assets and competent developers with knowledge of fields like electronics, material science, crash and safety, industrial design, and rendering were acquired as a result of these purchases. Altair PBS Works, Radioss, Evolve, Acusolve, SimLab, Embed, Multiscale Designer, FEKO, FLUX, Thea Render, SmartWorks, ESAComp, SimSolid, Monarch, Panopticon, EDEM, PollEx, PolyFoam, Grid Engine, Mistral, Breeze, S-FRAME, and WPS Analytics are among the products that have become commercially available as a result of these acquisitions.
- Forbes, Profile,see link here |ANSYS
- Forbes, Profile, see link here |AutoDesk
- Autodesk Inc.’s revenue in FY 2021, by segment(in million U.S. dollars)|Statista
- Autodesk Inc.’s revenue in FY 2021, by region(in million U.S. dollars)|Statista
- Amazon Web Services (AWS) began offering IT infrastructure services to businesses in the form of web servicesAbout AWS
- Technology Partners of Altair
- Annual reports ,Altair
- From humble beginnings come Big things, The OaklandPress
- Rockwell Automation’s sales by segment from FY 2008 to FY 2021 (in million U.S. dollars)|Statista
- Autodesk Inc.’s net revenue from FY 2011 to FY 2021(in million U.S. dollars)|Statista