That is a question that many companies face. You might be having a hard time deciding which is the better approach for your case. As always in life – it depends. It depends on the employment cost in the country where your company is based. It depends on the software cost you want to use for your simulations. It also depends on how many simulations you want to run and how frequently.

To sum up – it depends on a number of factors, which I will describe in this article. By the end of this text, hopefully, you will be able to decide which solution is better for your company. Let’s dive in.

**How much does a simulation department cost?**

First, let’s think about how much it would cost your company to have an internal CFD department. There are a couple of factors that contribute to the cost of the department.

These include:

- Cost of employment
- Cost of software licenses
- Cost of buying/outsourcing HPC (High-Performance Computing)

Let’s consider these one at a time.

First, we should consider employees, as they are essential for the simulations to be reliable. We will assume you are just starting to use simulations in your company, so you would have just one person dedicated to CFD simulations. As it would be the only person in this department, it should be someone who already has a lot of experience to handle all of the work properly. We should consider hiring a senior. In the Scandinavian region, a senior simulation engineer has a salary of ca. 80’000 EUR. In Germany, it is 65’000 EUR – on average. That is, of course, without additional costs for the employer, which vary from country to country. You must also add the cost of finding and employing a proper candidate.

Now for licenses and HPC, we have two options. If you run a lot of simulations, you’ll probably want to buy your own HPC and software license. If you will simulate less frequently, outsourcing an HPC might be the better option.

First, let’s look at buying your own tools. You will need a CFD software package with a mesher, solver, and postprocessing tools. The most popular are ANSYS and STAR-CCM+. Let’s assume you will choose ANSYS as it is the cheaper option. The cost of a single annual license is ca. 25’000 EUR. But that allows you to calculate only on four cores. If you would like to perform simulations on more cores, which you probably would, then you have to buy additional HPC packs. Each pack costs ca. 5’500 EUR and gives you access to 8, 32, 128, 512, and 2048 cores subsequently. And if you want to perform simulations in a reasonable time, you will want at least 32 cores. As we are talking about computing power, let’s think how much that would cost. If you would like to buy one, you need to spend ca. 8’000-10’000 EUR for a 32-core system.

Now let’s look at outsourcing computing power. ANSYS recommends using Amazon Web Services (AWS) as a cloud solution for CFD, so let’s look into that for simplicity. To run ANSYS Fluent on AWS, you will still need your own license so let’s leave the licensing costs at the same level. This time, you’ll have to pay per computing hour instead of buying an HPC of your own. The cost of a 36-core system on AWS, which can run applications with your own licenses, is 3,6 USD per hour. A not-so-complex simulation, but also not a very simple one, will calculate for around 6 to 12 hours. Let’s assume 8 hours for an average simulation. To that, you need to add ca. 24 hours for mesh generation by your engineer, 32 hours for the setup, and another 24 hours for postprocessing. So, in total, that would be 88 hours for a single simulation. That gives us 317 USD; under the exchange rate as of October 2022, this will be roughly the same in EUR.

Of course, there are other licensing options, and the licensing costs are often different for different companies, so the calculations might not be accurate for your specific case.

**How much does outsourcing cost?**

Now, let’s look at the costs of outsourcing. We have actually written another article explaining the costs of CFD simulations. You can read it here: What affects the cost of CFD simulations and analysis? - CFD Simulations - Quickersim. Having that, I will not go into detail on what constitutes for costs of CFD simulation. Based on the abovementioned article and experience, I will just assume that a CFD outsourcing project costs roughly 4’000 – 8’000 EUR (depending primarily on the number of cases and complexity of the geometry and flow).

**So what should I do?**

Now to the most important question – which option is best for you? Let’s do some calculations with the assumptions as follows:

- The cost of a single outsourced simulation is 6’000 EUR
- The cost of a senior simulation engineer is 80’000 EUR per year
- The cost of an ANSYS Fluent license + 2x HPC pack is 36’000 EUR per year
- The cost of a 32-core workstation is 8’000 EUR
- The cost of renting a 36 core instance on AWS is 3,6 EUR per hour
- A single simulation requires 88 hours

Abovementioned assumptions lead us to the following results:

We can see that the cost per simulation with the internal CFD department is enormous compared to outsourcing until we reach the level of 10-15 simulations per year and reaches a similar level at ca. 20 simulations per year. This is mainly due to the very high cost of employment and license. The cost of an HPC is meagre compared to these, so there is very little difference between having your own HPC and AWS solutions.

Let’s zoom in on the graph to see more clearly what happens near the 20 simulations threshold.

Now we see that with our assumptions, your own CFD department starts to be cheaper per simulation at 21 simulations a year. Buying an internal HPC instead of renting AWS starts to be cheaper after ca. 25 simulations a year.

Of course, there are many other factors to consider, like flexibility of your department, other licensing options, or the number of cases in a single outsourcing project. However, even though this estimate is very rough, I hope it allows you to gain more insight into this topic.

If you would like to find out what would be the cost of simulations for your specific project, contact us here or write me an email at m.suchonos|quickersim.com| |m.suchonos|quickersim.com.