Tools to tackle costs and complexity (continued)
A continuation of our interview with Richard House, VP of Operations-ATE for VI Technology, which appeared in the June 2009 Viewpoint column.
By Larry Maloney, Contributing Editor -- Test & Measurement World, 6/1/2009 2:00:00 AM
 VP, Operations-ATE VI Technology Austin, TX Richard House has more than 20 years of experience in engineering, marketing, and corporate operations in the test and measurement field. In March, following the acquisition of VI Technology by Aeroflex, House became VP of operations-ATE. Prior to the acquisition, he had been at VI for 10 years and served as the company’s president since 2002. Before joining VI, House spent 11 years with National Instruments, where he held the positions of director of engineering and strategic marketing manager. He holds a BS degree in electrical and computer engineering from the University of Texas. Contributing editor Larry Maloney conducted a phone interview with House on the role of engineering services and test-management software in curbing test costs. Read the first part of this interview. |
Q: How much business does VI attribute to engineering services versus deployment of your Arendar platform?
A: Compared to the revenues we receive from our engineering services and from the sale of ATE (automatic test equipment) hardware and software, the licensing revenue from Arendar is modest, yet the Arendar platform is integral to everything we do. Well over half of our ATEcustomers have deployed Arendar to plan and manage their test systems. You have situations where a customer licenses Arendar, which may be running on multiple servers around the world, to manage 100 test systems, each costing thousands of dollars.
Q: What do customers choose first—Arendar or your ATE products and services?
A: It happens both ways, but probably a bit more often we’ll start by designing an automated test system, which a customer then wants to replicate in many locations. That leads to a need to control the test setups and data from all of these systems, which is where Arendar comes into the picture.
That ties into the evolution of the company. It was founded in 1991 to develop software instrument drivers for measurement instruments. But the company expanded to developing customized automated test systems that could be widely applied across an enterprise. Then, we introduced Arendar in 2003 as a tool to manage all the data that customers were generating with their systems.
But even then we knew that we would eventually need the front-end test-planning capability that we see in Arendar 2009 to tie it all together. This new test-plan module integrates fully with the test-management module. As an engineer, you can not only look at test results but also relate that data to a particular version of a test plan, including calibration parameters and the limits used.
Q: So you are eliminating a lot of headaches in planning and managing tests.
A: Absolutely, but I don’t want to minimize the challenge and engineering skills needed to test complex products—even if you choose superior test-management and ATE tools. It’s like playing a difficult composition on the piano. It will sound better on a very fine piano, but you still need the talent to play the piece in the first place. So, you need to take care to properly deploy tools like Arendar. Otherwise, it’s garbage in, garbage out.
Q: Where do you see the most demand for your enterprise test solutions?
A: Currently, we see more demand for our services in defense and consumer electronics. No matter what the industry, we offer solutions ranging from a customized test fixture for a device under test all the way up to designing an entire ATE system. Many of our customers also want support contracts to maintain these systems after they are deployed. And the business is fairly steady. During recessions, companies tend to focus more on the design side, and we can support them with test solutions for R&D. As the economy ramps up, we tend to do more business in the design of ATE systems for production.
Q: What’s the potential for developing more industry-specific test devices, such as the MMTS?
A: We are always looking for such opportunities. What is happening is that companies often will try to take a test system used in design and move it into production test. But this can be very expensive and inefficient. Instrumentation used in design tends to have far broader capabilities than are needed on the production floor.
Test instruments used in R&D also aren’t optimized for taking fast measurements, which is a big concern on the production floor. In such instances, as with the MMTS, we were able to design a modular platform that can be widely applied in production. In fact, we had been developing another device for the semiconductor industry, but are holding up on it until that industry picks up again. The key is to develop a modular system that has wide application but still needs some customization.
Q: What were the factors that contributed to VI’s being named on Deloitte’s Technology Fast 500 list for North America in 2008?
A: A big factor in our more than 260% revenue growth in the 2003–2007 period was the ability to design test systems that can be used across an enterprise and that can be scaled and adapted for new devices. Then, you add to that the Arendar platform for managing these systems. Internally, we’ve also put a lot of effort into optimizing design methodologies and project management on our engineering teams, which has allowed us to leverage our resources to meet rising customer demand. Finally, we have put a lot of focus on developing a sales team that uses the approach of listening first to the problems customers are experiencing and then coming back with a solution.
Q: From the perspective of a successful startup company, how difficult would it be today for a test engineer to start a new technology-based company?
A: There’s no question that it is a very tough time to start a new test company. Those who want to launch a company to manufacture a new hardware product will face a very tight situation for obtaining financing. There’s less need for capital if you are starting an engineering services business, but with this approach you will be competing with engineers who’ve been the victim of layoffs during recession. In general, customers during this current economic climate have less money to try out a new test product or service. So, you need to be selling a “gotta have” product.
Even so, there will always be emerging technologies that present opportunities to determined and talented engineers. A good example now is the whole field of renewable energy and the test solutions needed to develop these new energy sources. But would-be entrepreneurs need to realize that the technology they’re offering, though very important, is just one piece of the puzzle. A great deal of your success will depend on your business acumen, including finance, sales, and marketing.
Q: Moving forward, what do you see as the biggest growth opportunities for VI?
A: With the greater complexity of test and the time-to-market pressures on companies, we see a growing need for our enterprise test solutions. Manufacturers today want to define their core competency, and increasingly that revolves around product development, not the design of test solutions. So, they will outsource ATE to companies like ours where test is the core competency. We also hope to develop more modular platforms like the MMTS for targeted industries.
In addition, as noted earlier, we expect to do more internationally as a result of being part of Aeroflex. Many of our production ATE systems are being deployed in Asia. In fact, we’ve been sending our engineers to Asia on a monthly basis over the last two or three years. We expect that international activity to accelerate, with the strong presence that Aeroflex has in global markets.
Read the first part of this interview.
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