Training and Simulation Industry Profiles

National Defense, November 1999 | Go to article overview

Training and Simulation Industry Profiles


Partnerships Shape Industry Landscape

The simulation and training industry now has fewer companies than it had a decade ago. But today's corporate players are finding that competition is tougher than ever. And they are finding that it often makes sense to form partnerships with their competitors in order to gain market share. These industry trends and other emerging developments in the simulation and training arenas were the focus of interviews conducted by contributing writer Linda Billings with executives from 15 companies. These firms are sustaining member companies of the National Training Systems Association and were selected for this feature based on their prominent role in the industry.

AAI Defense Systems

Smaller, faster systems are the wave of the future-the key will be "easy to train, easy to use." The Pentagons adoption of commercial standards, additionally, has been "a godsend" for smaller, innovative companies, said George Kursels.

He is vice president and general manager of AAI Defense Systems, AAFs largest business unit. Demand is growing for portable training systems, said Kursels, and users are finding that smallscreen trainers can be just as effective as full-scale simulators.

AAI Corp. (www.aai.com) of Hunt Valley, Md., a subsidiary of United Industrial Corporation, has two business units that work on training and simulation, primarily for U.S. military customers. AAl Defense Systems' current projects include the Joint STARS Maintenance Training Simulator, joint Service Electronic Combat Systems Tester, and Moving Target Simulator. AAI Engineering Support Inc. specializes in training and simulation support.

AAI is "near the top" of the second tier of companies in training and simulation, providing specialized service that the big companies do not Offer, according to Kursels. The company developed the industry's first Mobile Combat Systems Team Trainer for the Navy in 1980. It now provides the Navy onboard radar trainers and portable, configurable carryon combat systems trainers. AAI also markets electronic warfare simulation, high-resolution simulation, and onboard sonar, as well as radar testing. Its best-selling products are shipboard radar and sonar trainers, which permit operators to train like they fight.

"The industry is changing dramatically" as a result of the development of smaller, more powerful hardware and software products. One imminent change is the advent of "true virtual reality," Kursels predicted. And portable training systems will prove to be a better option than embedded systems. "Embedded trainers are too expensive," he observed.

AAI is drawing on its experience with largescale programs to break up big systems into subparts, developing, for example, smallerscale trainers such as the Battlefield Readiness Electronic Warfare Trainer, a stand-alone workstation for training on a variety of radars, which used to require a roomful of equipment, Kursels said.

The Navy is AAI's top training and simulation customer. The company has been building unmanned vehicles for the Navy for years, and it anticipates growth in demand for unmanned aerial vehicle (UAV) training and simulation.

The company currently is not planning to expand into the commercial market. But it is stepping up international marketing; its business is now about 80-20 domesticinternational, and the company expects to double its international business annually during the next several years. AAI has sold 27 anti-aircraft-missile dome trainers to customers in the United States, Germany, Japan, and Turkey. AAI Defense Systems recently won its first international contract for onboard training, from ADI Limited of Australia, prime contractor for a Royal Australian Navy guided missile frigate upgrade project. AAM will provide onboard training systems and land-based software support centers.

The company routinely works with bigger companies in training and simulation. It is a subcontractor to Lockheed Martin for a number of Army and Navy projects, and it is competing as a prime contractor for an Army UAV training program in partnership with Raytheon and several other companies.

AAI Engineering Support Inc. (ESI) is one of the top three companies in the business of training and simulation maintenance for the Defense Department, according to President Maurice P "Mo" Ranc. In addition to maintenance, ESI specializes in training and simulation instruction, modification, and relocation, Ranc said in an interview. ESI sales went up 30 percent last year. It recently won a contract worth up to $64 million to support STRICOM command, control, communications computers and intelligence training devices. ESI teamed with Litton/PRC for this job. It also won a $35 million contractpotentially worth up to $75 million over five years-to upgrade maintenance trainers for the U.S. Air Force's C-17 aircraft, and a $4.9 million STRICOM contract to upgrade gunnery maintenance trainers.

The Boeing Company

The Boeing Company (www.boeing.com), one of the largest manufacturers of commercial jetliners and military aircraft, has customers in 145 countries and reported revenues of $56.2 billion in 1998. The military and commercial training and simulation business is fragmented amongst various sectors of the company.

Keith Hertzenberg, Boeing's general manager of logistics support systems, said in an interview that his sector-which markets military training and simulation for tactical aircraft-offers systems support options ranging from training devices and systems to ground support equipment development and avionics upgrades.

Logistics support is one of three business sectors in the aerospace support division of Boeing's military aircraft and missiles group in St. Louis. Training systems marketed by this sector range from individual desktop trainers to fully integrated training systems such as the T-1A or T-45 programs (for which Boeing provides aircraft as well as training).

Though the Pentagon is the logistics support systems sector's largest customer, Hertzenberg said his sector also does business with foreign defense ministries in Finland, Kuwait, the United Kingdom and elsewhere. Future training and simulation business in the global military arena depends on foreign government acquisitions of new platforms, Hertzenberg noted.

Boeing is a generalist, "too big and too diverse" to rank in relation to other companies in the business of training and simulation, Hertzenberg said. By the same token, he declined to identify any particular technology or system as his sector's strong suit, stating instead that Boeing aims to provide a wide range of systems and services. This marketing approach allows the company to consider innovative options for meeting customer needs, he said. For example, when Boeing sold Apache helicopters to the U.K. Ministry of Defence (MOD), it formed a joint venture (Aviation Training International) with the British company Westland Helicopter to provide long-term Apache training. The joint venture's 30-year training contract is government-sponsored but privately financed by British banks under the MOD's Private Finance Initiative, aimed at promoting public/private-sector cost sharing, Hertzenberg said.

The training and simulation industry is currently drawing on a lot of new technology to meet customer needs, Hertzenberg said. In order to afford these new systems, the Air Force, for example, is buying training and simulation services by the hour while companies own, operate, maintain, and upgrade the systems. The Air Force has acquired training and simulation in this way for four training platforms thus far. Boeing won the first competition, for F-15C training. Under this contract, the company owns and operates four flight training devices at Eglin Air Force Base and is installing a second training site at Langley Air Force Base (ultimately this training system will encompass 14 networked sites).

Boeing currently is focused on meeting Air Force needs for distributed mission training, Hertzenberg said. The company has an Air Force contract to provide networked C-5 training devices; it also has a key role on Lockheed Martin's F-16 training team. Different flight training systems-C5, F-16, and others-are being linked in a network or networks, he noted, so personnel working on multiple platforms can train together, like they fight. One technological trend that Hertzenberg identified in training and simulation is tremendous improvement in visual fidelity in the near future-"the realism factor is going up by leaps and bounds."

Boeing's commercial operation, meanwhile, provides training systems engineering and technology, computer-based training (MD-11, MD-80), flight crew training, flight crew safety training, flight training, maintenance training and commercial technical training.

CAE Electronics Group

CAE Electronics Group (www.cae.ca) of Montreal, established in 1947, operates under the umbrella of the Toronto-based holding company CAE Inc. Training and simulation is CAE's principal business, accounting for three quarters, or $736 million (Canadian), in revenue last fiscal year, according to Andy Morris, vice president of marketing.

These revenues include $650 million in equipment sales-for land-based and marine training and simulation systems as well as commercial and military flight simulations. "We would certainly rank ourselves as one of the largest companies in this business," Morris said in an interview.

CAE Electronics Ltd. is the biggest member of the CAE Electronics Group, which includes companies in Australia, Germany, the United Kingdom and the United States. It has four divisions: commercial simulation and visual systems (accounting for 56 percent of business), military simulation and training (28 percent), energy control systems, and marine systems. The company's training and simulation business is 50-50 commercial-military, with exports accounting for 90 percent of business in both sectors (35 percent North America, 35 percent Europe, 30 percent other).

FAA-level-D-certified, commercial flight simulators are the company's flagship products. Last year, commercial aviation simulation accounted for $350 million of CAE's revenues. The company built its first flight simulator, the CF-100, for the Royal Canadian Air Force in 1952. Since then, it has produced more than 140 flight simulators for 20 different military customers. CAE claims a 75 percent share of the global flight-simulator market today, Morris said.

CAE Electronics offers fall-flight simulators, flight training devices, maintenance trainers, and computer-aided training systems. Its land-based simulation products include battle trainers, combat simulation systems, direct-fire trainers, and forwardobserver and target-recognition trainers. Military products include flight, tactics and full mission simulator for fixed and rotarywing aircraft; aircrew selection systems; and simulator visual systems. Reflectone and Thomson Training & Simulation are CAE's top competitors, Morris said. CAE wants to expand its share of the global training and simulation market and is intent upon on gaining a foothold in the United States.

Though CAE is "principally an equipment supplier," Morris said, the company is moving into the service sector. CAE's strongest prospects for growth are in the military market, especially in the United States, Morris said. All of CAE's training and simulation products are HLA-compliant, he noted. Upon selling its Link simulator division to Hughes in 1995, CAE agreed not to compete in the U.S. market until after February 1999. The military market now accounts for about $300 million of CAE's revenues-its defense business has tripled since 1994. Though the German government traditionally has been CAE's top military customer, the U.K. Ministry of Defense currently fills that slot. CAE's largestever contract, won in 1997 and worth $900 million over 20 years, is for a Royal Air Force Medium Support Helicopter Training Facility to include six high-fidelity simulators and "realistic interactive synthetic environment for both scripted and free-play tactical exercises."

CAE also is working on the U.S. Army Crew Station Research and Development Facility-for evaluating rotorcraft single-crew or double-crew cockpits in combat mission scenarios. It participates in the Eurofighter Aircrew Synthetic Training Aids training systems, through the joint venture company Eurofighter Simulation Systems, and the U.S. Army Research Institute's Simulator TrainerResearch Advanced Test Bed for Aviation-under a U.S.-Canadian defense development sharing program.

CAE's most important business partnerships are with aircraft prime contractors because they control access to proprietary data on the platforms, Morris said. A current marketing challenge for CAE, as a Canadian company, is "newly revitalized" International Traffic in Arms Regulations (ITAR), Morris said. ITAR "gives our competitors a way to slow us down," by maintaining proprietary rights to data on systems they have developed. "The U.S. market is most problematic for CAE ... the most complex and most restrictive ... it is not a level playing field," Morris said. CAE is considering possible acquisitions and mergers to strengthen its strategic position in the training and simulation industry.

The company is marketing a new visual system, in collaboration with Sogitech of France, called MAXVUE Medallion, for tactical image generation. CAE's principal competitor in visual systems is Evans Sutherland, Morris said.

Demand is growing for flight simulators in the regional airline market, Morris said, where companies are converting from turboprops to jets. In the military market, demand is growing for joint training, embedded training, and networking and the use of synthetic environments for "multidisciplinary" applications beyond training and simulation, such as acquisition.

Evans & Sutherland

Evans & Sutherland (www.es.com) of Salt Lake City, produces hardware and software for visual systems used in simulation, training, and virtual reality applications. These products are designed for training civilian and military pilots and tank and ship crews, offering "complete and fully integrated visual systems" as well as system components, noted David Fig.gins, group vice president for simulation.

The company was reorganized about a year ago, upon the retirement of Ron Sutherland, Figgins said in an interview. That resulted in the consolidation of the government and commercial simulation divisions into one single organization, now headed by Figgins. The combination of the two divisions made sense for Evans & Sutherland, he said, because it allows the firm to "leverage resources across all customers." The core customer base for the company includes major military contractors such as Boeing, Lockheed Martin, Raytheon, Reflectone, Thomson CSF and Mitsubishi. Other sales involve direct purchases by the U.S. government, primarily for visual system upgrades, Figgins said.

Visual systems, in general, include an image generator, a display system, a database or database modeling system, and any required sensor simulators such as radar, night-vision goggles, or infrared. Each of these components must be designed and manufactured for the specific application and must be properly correlated so that the resulting synthetic environment has the fidelity and realism needed to meet the training or engineering requirements.

Figgins predicts there will be fewer business opportunities for new start-up programs because the military services are buying fewer new platforms. But he foresees a growing market for upgrades and enhancements. "Customers want more of everything, but for less," he said. The visual-systems market increasingly is demanding more fidelity, more realism, more advanced modeling features, more networking capabilities. However, customers often must trade off capabilities to bring costs down, Figgins said. "We continually wrestle with tradeoffs," he said. It helps having various product lines so that customers have a choice between high-end visual systems and lower-cost, PC-based solutions. Evans & Sutherland makes the Symphony line of image generators-ranging from lowcost single-board solutions to complex high-performance options.

Military buyers seeking to purchase hundreds of systems for training troops in ground warfare, for example, need lower prices so they can afford the large quantities. Commercial customers currently are focusing on upgrading trainers for commercial airlines, Figgins said. That market is flat today because there has been a slowdown in new jet orders. "But it will pick up in a year or two," he said.

Ironically, Evans & Sutherland's toughest competition today, according to Figgins, comes from its own customers' in-house capabilities. "The SGI-enabled solutions developed in-house by the major primes are our competitors" in the high-end product lines, he said. But Figgins is confident that the company will be able to maintain and expand its 60 percent market share for most of its product lines.

Lockheed Martin Information Systems

Lockheed Martin Information Systems, Orlando, Fla., (www.Imco.com) is part of Lockheed Martin Corporation's $5.2 billion-a-year information and services sector. Information Systems was designated by the parent corporation as a "center of excellence for simulation and training," according to N.J. (Nick) Ali Jr., vice president of training and simulation solutions.

Training and simulation is "a core business" for Lockheed Martin, Ali said in an interview. "Our forte is systems integration." Information Systems offers everything from training needs analysis to system conception, system recommendations, and classroom training. The company markets training and simulation solutions to domestic and international customers for land, air, and sea applications, including live, simulators, and war-gaming systems. Ali said there is increasing emphasis on virtual network simulations-that is, systems of many simulators networked with a high-fidelity synthetic battlefield. An example is the British Combined Arms Tactical Trainer.

While "more than half of our business is domestic," Ali said, the company has a large international defense business and a growing commercial business. By volume, the U.S. Army is the company's top customer, particularly STRICOM in Orlando. "We train individual soldiers in things like truck driver training and small arms use." The company operates the Theater Air Command and Control Simulation Facility (TACCSF) at Kirtland Air Force Base in New Mexico and is responsible for the Army's WARSIM 2000 system and other joint defense simulation and training programs.

The company also is in charge of the design, development, and maintenance of crew trainers for BlB, B52, TIA, and T500 aircraft weapon systems; gunnery and tankdriver trainers; live simulation; advanced distributed simulation technology for the U.S. Army; and the Mission Training Support System for the U.S. Air Force.

The company foresees a significant expansion of its business in the international defense market-where the trend is for foreign ministries of defense to follow the U.S. lead and use simulation to address cost, safety, and environmental concerns. Information Systems is 11 moving proactively to address the commercial flight training marketplace," Ali said, especially in the international arena, where regional air carriers are growing and a lot of conversions are in progress from turboprop craft to jets.

Lockheed is taking advantage of what Ali calls "commercial technological enablers"that is, commercial off-the-shelf technologies-to meet customer needs. Available technologies will be used to meet military customer needs for reconfigurable, transportable training and simulation systems designed to prepare for smaller, urban conflicts. In addition, demand is growing among defense customers for training and simulation systems that are embedded in platforms, permitting training with an actual platform, perhaps even on the way to the battlefield.

"More and more, partnerships are really necessary to fulfill our customers, requirements," which are increasingly complex, Ali said. The company, additionally, plays a role in training and simulation initiatives pursued by other Lockheed Martin organizations. For example, Lockheed Martin sells F-16s, and Information Systems provides F-16 training. But even a big corporation sometimes has to partner with other companies to be competitive. Ali described his companys partnership with Reflectone Inc. of Tampa, Fla., formed to compete for U.S. Army aviation simulation and training business, as "a synergistic relationship."

The firm has a $276 million contract with the British Ministry of Defense for a Combined Arms Tactical Trainer, designed to support computer-simulated training. Lockheed partnered with Alenia Marconi for early design and development and ultimately will turn over responsibility for all hardware design and development to its European partner, Ali said.

In the commercial sector, Information Systems won a $750,000 training systems contract (potentially worth up to $12 million) this year with Werner Enterprises, a U.S. trucking company to provide "a motion-based driver training system that incorporates low-cost, commercial-off-theshelf visual and processing elements."

Lockheed Martin Tactical Defense Systems

Lockheed Martin Tactical Defense Systems (www.lmco.com), headquartered in Akron, Ohio, designs and develops simulation and training systems in addition to weapons, guidance, electronic combat and other systems. Tactical Defense Systems is part of the Naval Electronics and Surveillance Systems Group in Lockheed Martin's Electronics Sector.

It has been in the training and simulation business for more than 50 years, according to Dr. Linda J. Brent, Tactical Defense Systems program manager for training operations in Pensacola, Fla.

Products range from full flight simulators to "products that provide specific task training to aircrew and maintenance technicians, such as multi-task trainers, desktop simulation systems, distributed learning multimedia courseware systems and training simulation services with the recent award of the F-16 Mission Training Center (MTC) program," Brent said in an interview. "We maximize the re-use of software code, models, and graphics" to keep down costs.

In connection with Lockheed Martin's F16 Mission Training Center contract, the company has developed a new visual technology that it intends to patent: Variable Acuity Rendering (VAR), which 11 allows any visual generation device to display a high-fidelity model of target aircraft," allowing pilots 11 to recognize aircraft aspect angles at extended distances."

VAR keeps down system costs by eliminating the need for target projectors, Brent said. Another new technology that Tactical Defense Systems is marketing is Virtual Environment Deployable Simulation (VEDS). "[VEDS] is our entry into the world of virtual reality and helmet-mounted displays for deployable training applications." A new non-military product is an endoscopic sinus surgery simulator developed for the medical market with government and university partners (the first simulator will be installed at Albert Einstein Medical School in New York). "We also provide technologies to support our customers in the area of distributed and distance learning technologies.

Our business is primarily military, for both U.S. and international military customers," split about equally between domestic and international customers, Brent said. U.S. customers include the Air Force, Navy/Marine Corps, and Army. International customers include the Israeli, Saudi, and Swedish air forces. Tactical Defense Systems anticipates continued growth in international business, as military aircraft sales expand. Customers "are developing more sophisticated goals and requirements to meet ... operational and mission training needs," Brent noted. "Opportunities in the global market are expanding as export controls are lifted on some current U.S. military weapons platforms."

Tactical Defense Systems has supplied fullmission simulation systems and tactical trainers for the F-15C and E, F-15S, C-130, and JAS 39, with new devices in development for the F- 151 and F- 16. "We also provide full training support through the design and development of desktop simulation systems and multimedia distributed learning systems for the F-18, C-130j, and EA-6B weapons platforms," Brent said. Over the next five years, Tactical Defense Systems anticipates growth in demand for portable, reconfigurable training and simulation-and fee-for-service training such as in the F-16 MTC program. "We have designed and developed several of these systems, and are focused on the refinement and portability of the technology"-and distributed training. Brent identified the following trends in training and simulation, especially for military customers:

* Increased privatization, continued requirements for portable and flexible systems,

* Improved synthetic battlespace training,

* Greater demand for embedded training and simulation and intelligent training systems,

* Increased use of virtual environment systems for training and mission rehearsal, and

* Continued extension of modeling and simulation into acquisition and test and evaluation.

"We are now on the brink of another giant leap in this field," Brent predicted-"the larger scale implementation of truly distributed training, available anywhere at anytime for anyone," including "networked simulation over long-haul networks, distributed learning via the web and satellite technology, and lower cost, higher fidelity visual systems.

"At the same time ... we will also see a return to basics in terms of the design and development of these training systems. Even the most sophisticated technologies may be ineffective for training if they are not designed and used in a manner that simulates the operational environment of the war fighter and applies sound educational and instructional strategies and practices to teach critical lessons and skills."

The trend toward more joint military training and simulation could be good for business, she said.

NLX Corporation

Established in the mid-1990s, NLX (www.nlxcorp.com) is a newcomer to the business of training and simulation. The company originally established itself as a recycler of sorts, specializing in modifying and upgrading existing-flight-simulators. Though flight training and simulation is still the company's sole business, it now offers 11 training systems capabilities from cradle to grave: design, build, integration, test and support," according to NLX President J. Anthony (Tony) Syme. "Our focus is on the integration of already-proven commercial technologies [with] our software modeling and simulation expertise."

NLX, based in Sterling, Va., is a relatively small company@ annual revenues totaled $11.2 million in 1998-but it is growing fast. Revenues are projected to reach $21.9 million in 1999 and $32.8 million in 2000. Syme said in an interview that the company is doubling in size every two years. Revenues in 1998 were 72 percent military, 28 percent commercial. "This year the split will likely be two-thirds military, one third commercial," and the company is expanding its commercial marketing efforts. NLX is working with some of the biggest players in the industry, Syme said, such as Raytheon, Boeing and Northrop Grumman. "Although smaller, we can match capability to capability with these larger companies while simultaneously being more agile and responsive to our customers' needs."

NLX products include FAA-qualified full flight simulators and flight training devices, weapons system trainers, cockpit procedures trainers, part-task and maintenance trainers, and software and database support systems. "Due to our size and overhead cost structure, we have been able to provide high-fidelity trainers and quality services at lower costs than our larger competitors," Syme said.

In addition to establishing itself in flight simulation, NIX provides services in training system support centers and on-site engineering activities aimed at incorporating aircraft concurrency modifications in the training systems, Syme said. "With the win of the Navy E-2C weapon system trainer, there are now opportunities to pursue international business", he noted.

The Air Force is NIX 's top customer, Syme said. " [But in the] long term, our best opportunities are in commercial training systems in the business aviation and regional commuter aircraft sectors." The few "known and trusted suppliers of commercial simulators" will not be able to meet growing demand for commercial training systems. "Demand has been high in the business aviation and regional aircraft marketplace for training devices and courseware development," he said, adding that the focus in training systems development has shifted toward "software development and the integration of off-the-shelf-products."

Northrop Grumman

Northrop Grumman (www.northgrum.COM)l headquartered in Los Angeles, merged with Logicon Inc. in 1997, and in 1998 the company combined its data systems and services division with its Logicon subsidiary in Falls Church, Va., which now serves as a prime developer and operator of modeling, simulation and analysis (MSA) systems, including modeling and simulation analysis facilities and tactical trainers. Logicon has facilities in more than 30 states, and more than $1 billion in revenues.

Three Logicon business units do training and simulation: Logicon Information Solutions, Logicon Advanced Technology and Logicon Information Systems and Services.

Logicon's training and simulation business includes computer- driven war-game training for the U.S. Army, a Training and Doctrine Commands Total Army Training System and Common Core instruction program for retired and reserve forces, and operation and maintenance of NAS-Ns Vertical Motion Simulator at Ames Research Center in Mountain View, California.

Herbert Anderson, corporate vice president and president and chief executive officer of Logicon Inc., outlined the company's strategy for growth in a recent interview published by the company's in-house magazine. Anderson plans to:

* focus on core capabilities and build market share in current and emerging marketplaces, such as the state and local governments, and commercial markets;

* Reap substantial benefits from existing synergies across Northrop Grumman.

* Establish strategic alliances and continue to look at acquisitions that will help spur growth.

"Over the next five to six years, we want to grow our Defense Department sales substantially in real terms, but we will diversify into state and local, commercial, civil, federal, and some international business. A diversified sales mix will allow us to grow faster both in sales and margins," Anderson said.

The company has seven business areas: Command, Control, Communications, Computers, and Intelligence (C41); weapons systems; information systems; training and simulation; science and technology; base and range support; and commercial services.

In the area of C41, Anderson said, "we supply technical services and products in support of the Defense Department, civil and state and local governments. Typical capabilities there are geospatial intelligence applications, mapping, dissemination, and datalink services.

"In the weapons systems area, we perform systems integration and provide technical engineering services that support development and maintenance of major weapons systems, such as the B-2. Our capabilities include surface and submarine combat systems engineering, missile targeting, test and evaluation, independent verification of validation, and command and control.

"In the information systems market, we perform systems integration, develop software products, provide high-performance computing systems and image-based systems, and provide professional services to federal, state, local, and commercial marketplaces. We focus on hardware and software integration, largescale database design, high-performance computing, electronic document imaging, software development, and- systems design.

"In the training and simulation business area, we are a developer and operator of modeling, simulation, and analysis systems. Typical capabilities are analytical modeling, battle command training, integrated management training systems, and tactical trainers.

"In the science and technology business area, we provide scientists, engineers, and technical people with knowledge and understanding of diverse disciplines. For example, our work includes artificial intelligence, lasers, imaging, optics, operations research, systems analysis, and neural network applications.

"We also specialize in base operations support, facilities, data management support, facilities management services, IT, aircraft maintenance, and outsourcing to federal, state, local, and commercial customers. In the commercial marketplace, our services include deployment, operations, maintenance, and upgrade and modernization of information technology systems, networks, and applications. Typical capabilities are on-site, on-call hardware and software maintenance, IT systems modernization, help-desk support, and networks support," Anderson said.

His main competitors are Lockheed Martin, Litton, TRW, Raytheon, CSC, "all the major aerospace players, plus the major information technology players in the federal marketplace."

According to Anderson, the company is "moving aggressively toward a commercial business mode. Our White House Web site contract is representative of our award-fee based or fixed-fee based business.

Raytheon Systems Company

Providers of training systems increasingly find that military customers worry about 11 simulator availability." Because more training is performed on simulators today than ever before, contractors must supply trainers that allow military pilots to exercise flight skills as well as combat missions using va-rious weapon systems, said Gary Nesta, director of the flight simulation unit of Raytheon Systems Company, Arlington, Va. (www.raytheon.com)

The unit provides trainers for major Pentagon aircraft programs such as the B-2 bomber, the F- 117 stealth fighter, the F- 16 and F-22 combat planes and the Navy's F18 multirole fighter.

Having worked with these programs for 10 to 15 years, Raytheon has been challenged to keep up with the latest technology, Nesta said in an interview. "Concurrency of the trainer with the aircraft is critical," he said. In the F-22 program, for example, the aircraft and trainer developments are pursued concurrently so all the hardware and software are compatible.

The company also has upgraded the trainers with more advanced visual databases, networking capabilities and HLA compatibility, Nesta related. That is important, he added, because the Air Force requires the HLA standard in order to network the trainers under its distributed mission training initiative.

During the early 1990s, Raytheon was able to achieve significant cost reductions in its products by using off-the-shelf components. But as customers demand more sophistication in their weapon platforms and systems trainers, costs consequently go up, Nesta said. Nevertheless, today we are four to five times more cost effective than we were 15 years ago."

Business for the firm will remain on an upward trend, in large part, because large simulation buyers such as the Air Force are increasing their demand for simulators. "That is especially true in the wide-body aircraft" training field, Nesta said. More of the aircrew training for the C- 130 transport and the KC-10 tanker is done on simulators today. "I think the Air Force takes [simulation] very seriously," he noted.

Raytheon Systems Company, a product of Raytheon's 1997 acquisition of Hughes Aircraft's defense sector, supplies training and simulation systems to both U.S. and international military forces.

The company has delivered more than 200 high-fidelity military aircraft maintenance trainers worldwide (F-16, F-18, and F-22 in the United States and F-16 in Taiwan and Turkey). It offers "scalable" flight simulator technology for applications ranging from low-cost, high-fidelity part task trainers to large-scale mission rehearsal domes. For naval applications, Raytheon sells flight trainers, submarine combat systems trainers and training for mine-countermeasures and mine-hunting vessel crews (customers include the Belgium-Netherlands Mine Warfare School). For armies inside and outside the United States, it produces ground and air training systems, including the Fire Support Combined Arms Tactical Trainer, AH64 helicopter combat mission simulators, UH-60 helicopter flight simulators, and AH-1 helicopter flight and weapons system trainers for the U.S. Army.

For the U.S. Army Topographic Engineering Center's Joint Precision Strike Demonstration Program, Raytheon Systems has developed an Integration and Evaluation Center, used to combine C41, weapon and sensor systems with a network of modeling and simulation centers to form a virtual war-fighting environment.

In May 1999, Raytheon won a $11.5 million contract from STRICOM to upgrade flight simulators for UH-60A/L Blackhawk and CH-47D Chinook helicopters. Army aircrews in South Korea are using the simulators. Raytheon will integrate each simulator with a new Evans & Sutherland image generation system and design a new visual system database for the simulators, encompassing the Korean peninsula.

Reflectone Inc.

While Raytheon, Lockheed Martin, and Boeing are the Big Three in training and simulation, Reflectone (www. reflectone.com) is right behind them, according to John Lenyo, the company's vice president for marketing and business development in Tampa, Fla. Reflectone, whose sole business is aviation-related training and simulation, is the oldest company in the field-in the business since 1939. It developed electromechanical and optical training devices for U.S. and British forces in World War 11, Lenyo said in an interview.

In 1997, British Aerospace (BAe) bought Reflectone but left its business organization intact, so Reflectone continues to operate as a U.S. company. It functions under "a special security agreement" with the U.S. government because it does so much business with the Department of Defense. it is not yet clear how BAes merger with GEC Marconi, which already has a large presence in the United States, will affect Reflectone, he noted.

Reflectone's business includes traditional simulator products, training services (logistics support, maintenance, instruction), and training center operations. The firm owns and operates a training center with two G 130 simulators. While Reflectone has done some business in the entertainment industry, it is not currently marketing to this sector. Reflectone has chosen to focus on aviationrelated training and simulation, a field where it is known for its training devices for G 130s and rotary-wing or helicopter platforms, Lenyo said.

Company sales are 85 percent military, primarily domestic. But the company has customers in Asia, Europe, the Middle East, and South America. Reflectone's international business, which ebbs and flows with the state of the international economy, currently accounts for 30 percent or less of company revenues. In the civilian market, Reflectone recently delivered four FAA-level-D-certified A320 full flight simulators-three to Airbus for its Miami training center and one to the Asia Pacific Training and Simulation Center in Singapore. But the U.S. Defense Department is Reflectone's top customer, and the company's marketing efforts focus on the Pentagon. Its contracts for defense work primarily are subcontracts to prime contractors such as Lockheed Martin and Boeing. Reflectone's training and simulation products include a variety of fixed and rotary wing simulators for platforms such as the C-130, UH-60 Blackhawk, AH-1 Cobra, MV-22 Osprey, and F/A- 18.

Reflectone produced one of the world's first helicopter simulator with a sixdegrees-of-freedom motion system, for the U.S. Coast Guard in 1974. One of is flagship capabilities in training and simulation today is full-fidelity, sixdegree-of-freedom motion-based simulators. But "demand is quickly changing from all high-fidelity trainers to some highfidelity trainers and dozens of networked lower-cost training devices" that are reconfigurable, interoperable, and deployable, so the company is adapting to meeting these demands, said Lenyo. "We put a lot of focus in our IR&D [internal research and development] programs," he said. An example is the Reconfigurable Tactical Trainer (RTT)-a product aimed to produce "deployable and interoperable training devices that would be lower cost" and high-fidelity as well. Its two most significant emerging technologies are the "high-fidelity, wide-field-ofview 'Gemin-Eye' Helmet Mounted Display" and the RTT a rotary wing combat simulator capable of simulating different helicopter types.

Reflectone U.K. provides training and owns and operates training and simulation equipment for the Royal Air Force's Hawk jet trainer/attack platform. With a 17-year contract for this training program, the company has to cover a big up-front investment in hardware and facilities, including the construction of several full flight simulators and some part-task trainers, he noted.

Partnerships are important in the training and simulation business today, Lenyo said. Reflectone recently was selected by Bell Boeing for work on the U.S. Marine Corps MV-22 Osprey. Reflectone is also part of BAe Training Services, an organization within BAe that also includes three flying collegestwo in Australia and one in Spain. BAe Training Services provides flight training, courseware development, pilot training, and training devices from classroom trainers to full flight simulators. Teamed with Lockheed Martin Information Systems, Reflectone is going after U.S. Army training business. The company's best prospects for near-term growth are in "a lot of C-130-related programs," Lenyo said. Recently, Lockheed and Reflectone won a contract to develop a G 130 aircrew training system. The Lockheed-Reflectone team will operate, maintain, and upgrade formal school training for U.S. Air Force C-130 aircrews.

Science Applications International Corporation

Science Applications International Corporation, or SAIC (www.saic.com), is a hightechnology research and engineering company. It provides advanced training systems, simulation and modeling technology. Revenues for the company's last fiscal year were $4.7 billion, up 53 percent from the previous year. SAIC is the largest employee-owned company in the United States. Half of its business is with state and federal governments; the other half is commercial and international.

In training, modeling, and simulation, SAIC offers hardware design and manufacture, but most of its business comes from large-scale systems integration, according to Tofie M. Owen Jr., senior corporate vice president for business development. He is based in McLean, Va.

SAIC applies technologies across "a whole host of programs," Owen said in an interview. The company works with live, virtual and constructive simulations. A live ground simulation, for example, might involve mock shooting. A typical flight simulator is a good example of virtual simulation. A constructive simulation is almost purely computer-driven. "We truly understand" how to develop and maintain the databases needed to support simulations, Owen said. Applications for training, modeling and simulation systems are broadening, for example, into mission planning and rehearsal and simulation-based acquisition.

At Wright Patterson Air Force Base's Simulation Analysis Facility, SAIC staff help managers match systems with needs. Company technicians work on threat modeling and simulation for the Air Force and use modeling and simulation for survivability analyses as well. The company built BI and B2 bomber aircraft engineering research simulators, for example, to help manufacturers decide how to build the cockpits and how to train crews, Owen said.

SAIC also is expanding global marketing efforts. It is working on radar simulations for the Royal Australian Air Force for F 111 flight simulators, and it is marketing its "SIMtools" and semi- automated forces technology to foreign ministries of defense for application in a range of simulators. Though its international military business is starting to grow, SAIC's largest U.S. training and simulation customer is the U.S. Defense Department-primarily the Army and Air Force. SAIC plays a role in three major defense training and simulation programs: the Army Warfighter Simulation WARSIM 2000, the Navy Joint Simulation System (SIMS), and the Air Force National Air and Space Model (NASM). SAIC also does work for the Defense Advanced Research Projects Agency (DARPA) on the Synthetic Theater of War demonstration project. SAIC integrated a simulated battlespace with more than 5,000 dynamic entities distributed across the country.

The company also supports the joint Precision Strike Demonstration (JPSD) program, an example of the union of virtual and live simulations by means of distributed interactive system protocol, systems interconnection, and reuse technology. SAIC prefers to market "tool kits" rather than products, such as its "SIMtools" hardware and software kit for doing networked, real-time "high-fidelity visualization of multi-aircraft air combat on personal computer workstations." SAIC's Common Operational Modeling, Planning and Simulation System (COMPASS), developed for the Defense Department, is "a tool that's going to become the standard" for interfacing with the C41 community, Owen noted.

SAIC has been working on distributed mission training (DMT). When the Air Force awarded its first DMT contract to Boeing for the F-15 trainer, SAIC won a subcontract. Last month, the company was awarded one of four contracts from the Air Force to provide support under Phase I of the DMT operations and integration program. Both cost concerns and commercial off-theshelf technologies "have helped drive DMT," Owen said.

Unmanned aerial vehicles (UAVs) are a new market niche for training and simulation, Owen said. Another new market niche which Owen predicted will grow is interactive networked distance training and learning. Telecommunications networking technology has potential for training and simulation applications, Owen said. SAIC recently acquired Telecordia, formerly Bellcore, a leader in networking technology. It also acquired Boeing Information Services, which has expertise in networking.

SGI Inc.

SGI (www.sgi.com) was formerly known as Silicon Graphics. It recently adopted its new name, standing for "servers, supercomputers, graphics, insight," according to David "Bart" Bartlett, SGI's senior marketing manager, advanced graphics division, Chantilly, Va.

SGI specializes in modeling, simulation, and imaging; commercial off the shelf products for graphics and server applications; and computers ranging from desktop systems to supercomputers. The company owns Cray Computer Corpooration. Bartlett markets servers and host computers to government customers for modeling and simulation as well as other applications.

Military customers account for one third of SGI's business. Manufacturing, scientific, educational, and entertainment applications account for the other two thirds. The U.S. Air Force is SGI's top government customer, and the company is going after business with the Navy and Marine Corps. The Marine Corps' new modeling and simulation plan calls for 17 new simulators, and the Navy plans to upgrade its simulators, he noted. SGI competes against Evans & Sutherland for Army business.

SGI also works with the National Aeronautics and Space Administration, especially at the Ames Research Center in Mountain View, Calif On project involves a virtual reality air traffic control tower.

For training and simulation, the company works with major suppliers such as Raytheon, Reflectone and TRW. The company also collaborates with software developers, "the real drivers" of training and simulation, such as Multi-Gen Paradigm, MAK Technologies, and Boston Dynamics, Bartlett noted.

Among SGI's products are the ONYX 2 IR 2, a high-performance graphics simulation computer; and the Origin 2000 host computer. The ONYX 2 is an element of the Topscene Tactical Operational Scene mission rehearsal system developed by Lockheed Martin Vought Systems for the Naval Aviation Training Systems Program Office "to create three-dimensional fly@ throughs and walk-throughs of real-world terrain in staged battlefield scenarios," said SGI. Two of SGI's newest products are the NT320 and NT540 desktop graphics processors or "visual PCs," developed in conjunction with Intel and Microsoft.

"The next big change that's going to take place is the adoption of simulation-based acquisition," said Bartlett. That is the use of simulation for all phases of system development, operation, and maintenance. This approach, enabled by advances in digital technology, involves merging computer-aided design/ computer-assisted manufacturing (CAD/CAM) technology with simulators, said Bartlett.

Partnered with EDS and Multi-Gen Paradigm, SGI just won a contract from the Army Tank and Automotive Command in Detroit to develop a Virtual Distributed Collaborative Environment intended to support simulationbased acquisition. Like many others in the business, SGI is interested in the market for distributed mission training, planning and rehearsal. The company is a subcontractor (Lockheed Martin is prime contractor) for the Air Force F-16 DMT program. "The third wave" in training and simulation will be "simulation-based analysis," Bartlett predicted. "SGI's going to take advantage of that ... this is a huge market," though the company has plenty of competitors.

By 2001-2002, desktop high-performance computers for simulations will be more affordable, and new software tools will be available to meet user needs. Bandwidth will continue to constrain the distribution of data over networks, limiting growth of virtual distributed collaborative environments, Bartlett said.

TASC

TASC (www.tasc.com) is a subsidiary of Litton Industries, with annual sales of $50 million. The company, located in Reading, Mass., serves "a broad range of simulation and training customers in the defense and intelligence communities," providing training technologies and software engineering as a contractor or subcontractor to major systems integrators, according to J.C. Williams, TASC vice president, advanced simulation group.

Williams cited the company?s strengths in synthetic natural environments, computer-generated forces software and HLA interoperability engineering services. Its largest market sector is distributed simulation, for DARPA, STRICOM, the Air Force and joint programs, Williams said in an interview. Among the company's leading products are a Distributed Interactive Simulation Exercise Construction Toolset-a web-based tool for exercise generation and management. Other products are the Total Atmosphere Ocean Space system, defined by TASC as "the emerging standard" for synthetic natural environments, and a Synthetic Image Generation System that produces real-time, photo-realistic imagery for joint force training.

TASC's best opportunities for growth in the training and simulation business are the Air Force's distributed mission training and distributed wargaming initiatives, Williams said, along with simulation-based acquisition. The company now plans to enter "the systems integration arena, primarily through our focus on software development .... We expect to become a full services provider of training systems capabilities to the major military procurement agencies" such as STRICOM and the Air Force Training Systems Products Group, said Williams.

In modeling and simulation, "issues such as interoperability, building synthetic natural environments, and providing computer generated forces have been the greatest challenges to providing training system fidelity ... TASC sees a solid future for its simulation business," Williams said, "because of our expertise in these areas." The field of distributed simulation and distributed wargaming "is just beginning to emerge. Many would say it's a mature market already," he observed. But "there are still technical challenges."

While TASC is not a presence in the commercial market today, "we intend to market the commercial sector very heavily in the near future," Williams said. The company recently won an $8.9 million dual-use contract with the Tank Automotive Command to provide a simulation system for vehicle design engineers.

Recent changes in Pentagon procurement policy, such as the shift to commercial business practices, "have actually improved our chances of growing our modeling and simulation business," Williams said. "TASC has been very active in providing capabilities for the high level architecture environment."

Besides working with other Litton divisions, TASC has many ongoing partnerships with various firms in the simulation and training industry. "We are also national services provider for many of the largest commercial firms involved in product data management, which involves the use of our simulation tools," he added.

Thomson Training & Simulation

Thomson Training & Simulation (www.tts.thomson-csf.com) of France and the United Kingdom has been in the simulation and training industry for about 50 years. It is a leading supplier of simulators for civil aviation. The company has produced more than 370 full flight simulators. Company officials emphasize they generally work in partnerships with airframe manufacturers and other simulation manufacturers.

Thomson Training & Simulation, owned by Thomson-CSF, not only builds flight simulators but also provides flight training in partnership with aircraft builders and operators, through its Orbit Flight Training subsidiary. The company supplies Airbus 320 and Boeing 8777 flight training in conjunction with United Airlines/UAL Services in the United States and F-16 flight simulation and aircrew training in cooperation with Lockheed Martin. Other training and simulation customers include Air France, Airbus Industrie, British Airways, China Eastern Airlines, Korean Air, Mitsubishi Heavy Industries, the Pakistan Air Force, the Royal Australian Air Force, Sabena, the Spanish Training Center, the Swiss Ministry of Defense, and Turkish Airlines.

Thomson Training & Simulation Inc. has offices in Arlington, Texas, and Tulsa, Okla. These U.S. branches provide flight simulators, visual systems, flight training devices. Products range from desktop trainers to full flight simulators.

In Arlington, Thomson supports civil aviation and military marketing. This-Customer support group handles spares sales, warranty administration and repairs processing for all North American customers. It also is responsible for Database Generation for all E&S Image Generators and Thomson Image 2, 3, 3T Image Generators.

The Updates Services unit based in Tulsa, is an engineering and services center that targets all simulation technology businesses. It offers services and products ranging from upgrades to major commercial and military programs.

TRW

TRW (www.trw.com) is an integrator and operator rather than a developer of training and simulation systems. Its specialty in training and simulation is joint programs-joint training, modeling, and simulation, according to Charlie Richardson, vice president of business development for TRW Information and Technical Services, Fairfax, Va. TRW Information and Technical Services is a strategic business unit of TRW Inc., which reported $11.9 billion in sales last year.

TRW's training and simulation business is primarily with the U.S. military@ Its top customers are the U.S. Army and the U.S. Atlantic Command in Norfolk, Va., which is about to become the Joint Forces Command. The expanding joint mission in training and simulation within the U.S. military services will be good for TRW's business, Richardson said in an interview.

Pentagon downsizing and outsourcing represent new opportunities" for the company, and the department's shift from procuring hardware to purchasing services "is good for us," he said. As a system integrator, TRW routinely works in partnership with training and simulation product developers, he noted.

TRW's major training and simulation projects include a support contract for the U.S. Atlantic Command's Joint Training Analysis and Simulation Center; operation of the Joint National Test Facility for the Ballistic Missile Defense Organization in Colorado Springs and the joint Simulation System for the Joint Program Office in Orlando, Fla.; a Joint Theater Missile Defense Attack Option contract with the U.S. Air Force; and a support contract with the Army Forces Command-Atlanta and Air Combat Command-Langley Air Force Base for joint exercises. TRW is one of many contractors involved in DARPA's Synthetic Theater of War program. The company also has provided some modeling and simulation support to the Office of Naval Research, and it Is "involved internationally in a Japanese defense simulation system," Richardson said. TRW also is the integrating contractor for the U.S. Army's digitized battlefield program.

Trends driving the industry are increasing demand for distributed training and simulation worldwide, growing use of commercial technology for military programs, integration of diverse products into interoperable systems, and more fee-for-service business with the Defense Department, Richardson said. Though its training and simulation business is primarily military, TRW is expanding sales in the commercial sector. Its top commercial customer is the Federal Aviation Administration.

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