Military Simulation, Modelling and Virtual Training Market : Top Companies in Immersive, Interactive, Constructed & Computer Based Training

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1 Figure 1.2 Example Submarket Forecast ($m, AGR ) Year Note: The real data has been redacted in this data table. Values are for illustrative purposes only Barriers to entry analysis for markets around the world Figure 1.3 Example Barriers to Entry Analysis 2014 (Market Size vs. AGR ) Barriers to entry High Low Country 4 Country 9 Country 10 Country 7 Country Country 6 5 Country 11 Country 8 1 Country 12 Country Annual growth rate Country 1 Country 2 Country 3 Country 4 Country 5 Country 6 Country 7 Country 8 Country 9 Country 10 Country 11 Country 12 Country 13 Note: The real data has been redacted in this data table. Values are for illustrative purposes only Full transcripts of exclusive visiongain interviews with key opinion-leaders in the market from; MASA Group, NGRAIN and Opal R-T Profiles of leading companies operating within the sector with market share analysis SWOT analysis of the major strengths and weaknesses of the market, together with the opportunities available and the key threats faced Conclusions & recommendations Page 46

2 Indian Military Simulation, Modelling and Virtual Training Drivers & Restraints Table 5.29 Indian Military Simulation, Modelling and Virtual Training Market Drivers & Restraints Drivers Rapid acquisition of new platforms and systems Ambitious plans for technologically advanced future force, including acquisition of virtual training and simulation technologies Military modernisation efforts Threats to security domestically and internationally Strong economic growth Increased defence budget across all sectors Restraints Increased social spending Focus upon domestic contractors Cancellations and delays to ambitious projects Indian Military Simulation, Modelling and Virtual Training Contracts & Programmes Table 5.30 Indian Military Simulation, Modelling and Virtual Training Major Contracts & Programmes (Company, Value ($m), Date, Description) Company Value ($m) Date Details CAE Inc - Jan-11 C-130H full-mission simulator. CAE Inc - Feb-11 Rafael Advanced Defense Systems - Apr-11 CAE Inc 64 May-11 Tata Group formed a partnership with CAE for the provision of T-90 and T-72 tank simulators for the Indian Ministry of Defence (IMOD). The simulators are to be delivered to the Indian Army. Procurement of Spike anti tank guided missile (ATGM) of the Indian Army will also incorporate simulator acquisitions as part of the programme. Israeli company Rafael Advanced Defense Systems has been awarded the $1bn deal from the Indian MOD for the ATGM systems, and simulators will be used for training purposes for the Indian Army. The Helicopter Academy to Train by Simulation of Flying is a joint venture between Indian firm Page 168

3 5.14 South Korean Military Simulation, Modelling and Virtual Training Market Forecasts Table 5.40 South Korean National Military Simulation, Modelling and Virtual Training Market Forecast ($m, AGR, CAGR, Cumulative) Sales $m AGR () CAGR () CAGR () 4.8 Flight AGR Non-Flight AGR Figure 5.89 South Korean National Military Simulation, Modelling and Virtual Training Market Share Forecast 2014, 2019 and 2024 ( Share) Page 192

4 7. Expert Opinion 7.1 MASA Group MASA Group is a global company focused on the development of Artificial Intelligence-based Modelling & Simulation software for the Defence, Public Safety, Healthcare and Game Development Markets. Their SWORD and LIFE products are of particular interest to the Military Simulation and Virtual Training market. Visiongain would like to thank Mr Juan Pablo Torres, CEO MASA Group, and Ms Amandine Pinget, Marketing and Communications Manager MASA Group, for their time and assistance in this research Recent Changes for MASA Visiongain: Could you comment on the current state of MASA and the recent changes the company has undergone? Juan Pablo Torres (JPT): Over the past 4 years the company has implemented an accelerated growth strategy. The growth plan had a strategic purpose to diversify the activities of the company along three main axes: 1) Transform the company from a services only company to a more balanced software editor. Previously MASA was only a services company working on a specific system for one specific customer in one specific country, as opposed to developing and editing products. We went from taking around 10 of our revenue in licences 5 years ago to over 50 today with our goal of 66 almost realised. 2) Geographical diversification was also a very important avenue to pursue. Until very recently, MASA was only really working in France, with the French Army being the predominant customer. At the time we were working only on the SCIPIO programme for the French Army. Today MASA is selling to around 15 countries; we have expanded from 1 country to 15 in 3 ½ years. This is extremely encouraging for us, especially given the short sale cycle time for the industry. 3) The third element is to move to a multi-sector business approach. We now work in sectors such as public safety, and gaming or serious gaming. The video game sector and military sector technology are particularly interrelated, which puts us in a strong position to enter the market of game-related applications (including the use of game technologies for purposes other than developing video games). Page 224

5 Table 8.2 Airbus Group Military Simulation, Modelling and Virtual Training Products / Services Company Division Product Specification Airbus Defence & Space C295 Full Flight Simulator Flight Simulator Airbus Defence & Space CN235 Full Flight Simulator Flight Simulator Airbus Defence & Space Mission Trainer Flight Simulator Airbus Defence & Space Tactical Air Trainer Flight Simulator Airbus Defence & Space Flight Training Device Flight Simulator Airbus Defence & Space Multimedia Interactive Training System Flight Simulator Airbus Defence & Space ESM Simulator Flight Simulator Airbus Defence & Space Radar Simulator Flight Simulator Airbus Defence & Space Acoustic Scenario Simulator Flight Simulator Airbus Group Reorganises in bid to Increase Profits As part of a major reorganisation of the company, the entity formerly known as EADS is now working under the title Airbus Group. Cassidian and Astrium have merged and will now be known as Airbus Defence and Space. While Eurocopter, will now be known as Airbus Helicopters. This reorganisation was undertaken with the aim to boost profit margins, utilise the globally recognised Airbus brand and to streamline defence operations in a bid to increase profits by 10. As reported in December 2013, the reorganisation has recently resulted in the loss of 5,800 jobs. The consolidation effort is focussed upon sites in France, Germany, UK and Spain and is expected to take place over a period of three years. In relation to the military simulation, modelling and virtual training market, Airbus Defence and Space provide a wide range of systems and solutions which build on their expertise as a platform developer. Full Flight simulators, alongside tactical and sensor trainers are key elements of the airbus portfolio. In December 2013 it was announced that the German military would receive the first of 53 ordered A400m airlifter from Airbus Defence and Space in mid Simulation systems associated with the A400m are expected for delivery before Airbus Defence and Space is working to increase profit margins rather than growth within the defence industry. This is not to say that no expansions will take place. For example, in November 2013, Cassidian Optronics announced that it had opened a subsidiary in Brazil. Optronbras Ltda in Page 240