This 17 November, Andy Fawkes, MS&T Editor and Marty Kauchak, Halldale Media Group Editor, completed a wide-ranging interview with Arthur Alexion, CEO, Bohemia Interactive Simulations. We spoke about the challenges now and opportunities for the future.
While this interview would have normally occurred at BISim’s conference room at a traditional, “live” I/ITSEC, this important media engagement was conducted by Zoom meeting. So it was appropriate to first seek the corporate CEO’s insights on the current S&T business environment, and his assessment of how the global virus has affected BISim in terms of production. As BISim primarily makes software, it was able to quite easily and rapidly scale-up its existing infrastructure. Yet, similar to other companies across the S&T industry, there has been “some level of damage in production” as work schedules were disrupted for its employees in Europe and elsewhere. Alexion added, “We’re down maybe 10% in productivity”.
Impact on Sales
Alexion then looked at the pandemic’s impact on corporate short- and medium-term sales. BISim’s short-term sales were reported to have had “a minor, little bit of damage, as governments are trying to continue to keep spending.” As significant BISim was said to have “the right type of customers”, so “they are not battening down the hatches and closing down projects quite the same way other commercial businesses might.” The CEO said BISim is also achieving its near-term sales levels through innovation and persistence. In one of the many ironies of the pandemic-era business environment, Alexion reported that while his company has experienced a slowdown in its levels of engagement with its customers, his business development personnel often report a “deeper level of engagement” with customers, as program managers, engineers and others on the government side have more time to focus on these engagements without as many distractions. While the constraints of the C-19 business environment have not been “massively damaging”, the executive noted they “have also slowed us down, maybe 10%, 15% or 20%.”
From Live to Virtual
With an eye on medium-term sales, BISim expects decreased defense budgets, as nations face down the reality of paying the bill for pandemic relief spending and other converging macro-economic forces. However, the CEO offered that at the same time, governments are “going to have to accept this [a pandemic-like event] will happen again, so, we expect an aggressive drive toward simulation-type training and particularly, the ability to dial in remotely to simulation-type training. We look for that to be a factor that drives additional value for us in the 2021-22-time frame. We’re relatively confident that is going to happen.” BISim expects to further benefit from an expected acceleration of training events from the live to virtual domains.
“We don’t want the customer to be beholden to us”
Focusing next on his product portfolio, Alexion initially recalled how BISim originally licensed its technology to the UK MoD for limited use cases and “five years later the technology was used all over the place.” He continued, “The whole British approach is a proof that our software is very adaptable by the customer which is the whole idea – we don’t want the customer to be beholden to us. We sell software licenses and they should be able to use it and exploit the value of it without us – that is the whole idea of software and always has been. And we’re driving down that route very aggressively with VBS4.” [Editor’s note: Read more about these UK MoD use cases]
VBS4 is BISim’s new flagship product. This August, the company enhanced VBS4 with the VBS Plan and VBS Geo modes for fast and accurate, scenario and terrain generation. Alexion added these upgrades were designed, very specifically, to be used with “much less technical training – almost no technical training – and allowing you to do much more with VBS4 and unlocking the use of VBS4 for many more users. This was one of our big obsessions with building VBS4.” Indeed, the CEO emphasized there will be no “VBS5” version for several more years, with his company continuing to “’surf the waves’ of three other interesting macro-level trends which exist.”
Highlighting these overarching developments, Alexion first called attention to more cost effective COTS hardware solutions, which are replacing the need for expensive bespoke simulators. Several of the rapidly evolving, underpinning hardware developments for defense training audiences include headsets from Varjo and other suppliers, motion tracking systems and the migration to motion systems for more weapons platforms. “All of these hardware systems don’t need custom hardware – this is one thread and we’re a long way through that thread now,” the corporate executive said and added, “The Varjo headset is capable of providing a heads-up display with enough resolution that you can read it properly. The next few years are going to be very exciting because we’re going from proof-of-concept type materiel which is where we’ve been the last few years, to where it’s good enough for training – now. Let’s use it!” Indeed, in the next five years, Alexion sees “an explosion of those less expensive projects, where they are using things like VBS4 to build a training system – just as good or almost as good as the ‘old-fashioned’ custom-made training system, and it will be much more flexible.”
“Less Expensive Terrain Data”
A confluence of other technology thrusts: miniaturization; improved resolution of sensors; and more capable drone systems, among others, are helping to deliver burgeoning amounts of higher quality, less expensive terrain data. Alexion commented on this second technology thrust. “That means you can have very rich terrain inputs in your data system without costing too much – another very big trend.” The corporate leader called attention to VBS Blue, a game engine, purposely built with a terrain ingestion pipeline, to support this second trend.”
The third development supporting improved training is the Cloud, the BISim CEO noted. Alexion then said, as the price point for using the Cloud for training “is now cheap enough to be a credible alternative to locally hosting all data and other content, concurrently, the internet is robust and fast enough to permit the end user to remotely host materiel, without significant lag time and other negative outcomes.”
Alexion emphasized these macro-level trends are driving the capabilities of VBS4 and the next generation VBS5. “We want to be able to facilitate ‘Cloudifying’ everything, but you can still run it locally. You can pull the plug from the wall and even disconnect it from the internet. When you plug it in, it will give you the upgrades and download a whole new load of terrain data, if you so wish, to update everything. That’s where we’re going with VBS 4 and -5 – more Cloudification and componentization.” As significant the industry leader revealed, “We’re also moving away from just being able to run on Windows so you can also run on Linux, offering advantages when you are running in the Cloud.”
Forward Looking Customers
In response to the question, “How is BISim convincing military customers that its business model represents the way forward to future training?” Alexion responded that there are enough current customers who are “very forward looking” – in essence, helping to convince end users “who are moving a bit slower.” At the top of Alexion’s list of forward looking defense customers was the US Army with its Synthetic Training Environment which he opined was, “very forward looking, very, very aggressive in terms of what they want to do,” and added, “They truly want a massive leap into the future.” Alexion then called attention to Sweden and the UK, which are advancing these capabilities “in a pragmatic way, yet, still reaching forward.” The corporate executive specifically called attention to the British Army’s VRLT [Virtual Reality in Land Training] project that “has content they are testing with other companies.” He continued, “They are testing the art of the possible. And because there is so much natural momentum going forward, the customers can ride the wave and see what is happening. They don’t need to invest too much into visionary, prototyping of materiel. Industry is driving this forward. Many are driving this vision forward on the hardware side. There are not so many software companies investing ahead of the curve, like we are. But we are certainly showing the art of the possible, for example with the whole VBS Blue [IG] terrain ingestion pipeline. We started three or four years ago and can now show it to them. We can say, ‘You no longer need 50 different terrain formats. You can now ingest whatever you want with VBS Blue.’”
“Unreal and Unity are not Competitors to VBS4”
Earlier this month, BISim received funding from an Epic Games MegaGrant to extend the VBS World Server (VWS) to support Unreal Engine. This led to a brief discussion about an increasingly competitive market space, highlighted by a more visible presence of Epic Games and Unity, among others. Alexion said “Unity and Unreal are both excellent technologies. We are very able to work with those technologies along side our own technologies. Unreal and Unity are not competitors to VBS4. VBS4 is a game engine platform with a $100-150 million of specific military capability built on top of it. That $100-150 million is not just all the code that is being built. It’s the code being built with the subject matter expert looking over the shoulder of the programmer, providing a very specific targeted capability which the military wants and needs. It’s a very high-fidelity simulation, which doesn’t really exist in Unreal or Unity. You could display it in Unreal or Unity, instead of in the VBS Blue rendering engine, and we would be quite capable of doing that. If someone else wanted to build that equivalent they would have to do that from scratch, and spend $150 million to get there and it would take you five years – and then you may not even get there even then. It’s not easy to build something that complex.”
In a nod to collaboration, Alexion said, “We’re very interested in working with both Unity and Unreal, potentially as a second rendering engine. We would always still recommend to customers that VBS Blue is a great engine, with its great terrain ingestion capability.” Alexion further noted VBS Blue’s 64-bit positioning capability, as opposed to Unreal* and Unity’s 32-bit positioning capability – which he asserted was nine decimal points less accuracy. “This means, for instance, a post box which should be on the side of the street appears in the middle of the road. This is a fairly significant and important problem. They have limitations to what they can do but they are excellent technologies. For some use cases within the VBS ecosystem, it could be very interesting for customers to use Unreal or Unity, and we would recommend that – we enjoy working with those technologies, to try to understand them better so we can recommend those things to customers – when we think it is appropriate.”
“So Much Opportunity” in the Military Space
Of interest to followers of Halldale’s Safety Critical Training editorial program https://www. halldale.com/topics/117-safety-critical-training, BISim sees “so much opportunity in the military space for our technology that we don’t want to be too distracted by going into other areas in a big way.” However, Alexion noted that if there are opportunities to allow his company to learn and develop capabilities which it could bring back into the military sector, “those are the types of opportunities we look at and generally go after. Generally speaking, we are focused on the military simulation space and we’re more likely to expand in that area – moving up into different echelons of simulation.” One specific, additional business development opportunity BISim sees in the military space is the sale of VBS Blue’s software to new customers. Indeed, Alexion noted, VBS Blue IG software “is not used by anywhere near as many customers currently out there with image generators, who could be using it. There is a huge amount of opportunity still out there for us. Huge growth. Huge opportunity to add value. Huge opportunity to disrupt existing players and provide our better technology at a cheaper price point. That’s what we love doing! We don’t want to be distracted because there is so much opportunity there.”
“We’re Moving from the Art of the Nearly Possible”
Peering out into the next five years, Alexion offered, this time frame “will be a very, very interesting time.” He concluded, “You will have the macro-level trends I talked about in hardware, terrain data and in Cloudifying everything. This is the big thought: This is the period where things go from theory to practice. From 2021-2025 we’re moving from the art of the nearly possible, with demonstrations and prototyping, into real broad-scale application of these new technologies. This will be a very exciting time for military simulation.”
* Editor's note - During vIITSEC 2020, Epic Games informed the simulation industry that Unreal Engine 5 will support 64-bit calculations (a.k.a., “double precision").