December 12, 2005
Bridging the Gap
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Jack Horgan - Contributing Editor

by Jack Horgan - Contributing Editor
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The gap referred to in the title is the gap between mechanical engineering and electrical engineering. Most final products are electromechanical in nature. The design must take into account both electrical and mechanical issues. Too often the electrical design is handed off, thrown over the wall so to speak, to the mechanical engineers.

Flomerics is a public company founded in 1998 in the UK who is trying to bridge this gap. In 1995 Flomerics went public on AIM (Alternative Investment Market) part of the London stock exchange, like Celoxica as described in a recent editorial. The firm offers an Integrated Analysis Environment (IAE) for the physical design of electronics with products for thermal management of systems and boards, electromagnetic compatibility and package level thermal characteristics. I had an opportunity to speak with Gary Carter who joined Flomerics in January as COO and became CEO in September. Gary had been Managing Director and Vice President of European Sales for ANSYS.

Tell me a little about you background.

I have been in the CAE (Computer Aided Engineering) industry for about 25 years. After graduating in mathematics, I moved over into software engineering. I started out doing research in computational fluid dynamics (CFD) which is interesting given that's where I have finished up at Flomerics. Having worked in programming and then as an engineer at Rolls Royce, I got myself into the software industry originally as an applications engineer supporting a meshing tool, a pre-processor tool called Patran and then into supporting a structural analysis code called Nastran and working my way up in engineering to sales and marketing. I joined a company called ANSYS about 9 years ago to head up
Northern Europe operations and worked my way through there until I left there at the beginning of this year. At that point I was running the European sales organization for ANSYS. I took the opportunity to join Flomerics at the beginning of this year when they were looking for a new chief executive, an opportunity to move into an environment where I was responsible for a company as opposed to just the European part of it. Albeit a much smaller company, it was something which was local and which I could really get involved with at the highest level.

In the interest of non-disclosure, I was co-founder and ran development at Aries Technology, a pioneering firm in mechanical CAE for the average engineer.

(We will skip the walk down memory lane and discussion of common friends and acquaintances) “Amazing piece of code, well ahead of its time

ANSYS is a much larger company and offers a much broader product portfolio than Flomerics. What attracted you to this company that has been around for about 15 years with revenues around 10£ million for the past few years? How has the transition gone?

I was not just responsible for Europe at ANSYS. I was involved in other aspects of the business as well, especially having been there 9 years. There are many aspects of running a business like Flomerics that although not directly responsible for running at ANSYS I was very familiar with. Picking up direct responsibility for running a development organization for example or global sales has worked well for me. The transition has gone well. The management team here has been very helpful in getting me involved and up to speed on the issues. For me it has been a good time to come on board. As you mentioned for the last 3 or 4 years the company's revenue has been pretty static. In fact
it actually went down from 2001 to 2003. That's when the industry went through a recession. Up until 2001 the average growth year to year had been around 23%. I am looking forward, now that the industry is picking up, to working with the company to build strong growth again. It's been a lot for me to get used to. Of course the electronics industry is not one that I have been familiar with. There has been quite a steep learning curve, learning about the EDA industry, the players there and so on but I am getting there.

The former CEO (David Tatchell) is now CTO and still a board member. He ran the company for over a dozen years. How has the relationship between the tow of you gone?

The company was founded in 1988. He had made it quite clear to the market that he was looking to step down as CEO before his 60th birthday. It was even in the firm's annual report. He was committed to that. It was important to him to find the right person to take over the company. He and I have worked very closely since January. Although he had said that he wanted to step down by the time he was 60 in 2006, he moved to the CTO role sooner than he had planned. That relationship has worked well. It's enabled him to focus more on the technical aspects which he enjoys and has not been able to spend as much time on in recent years as he wanted. That partnership has been and is a good
one. David will be around yet in his CTO role which is great. It has enabled me to pick up the CEO duties.

The company has a major product called FLOTHERM that accounts for 75% of the revenue. In recent years, the company has tried to broaden the product portfolio. Would you comment on that?

The company was founded on the basis of a concept of a single product flow firm, which was to take the CFD technology which up to that point had been the domain of experts and repackage that in a way that could be used by non-experts to help them understand the thermal issues in the design of electronic components and systems. Partly it was a response to market needs and partly in terms of diversifying the company in terms of the number of products. Over the last two years there have been some other products which have been introduced. FLO/EMC is a direct response to what we saw as an increasing need in the marketplace to look at EMC design issues in parallel to thermal issues. Flomerics went out and acquired a UK company called KCC (Kimberley Communications Consultants Limited) for the specific purpose of developing that code. The product was introduced 3 or 4 years ago and has had strong growth. Last year we introduced a new product called FLO/PCB which was to take the same technology that's in FLOTHERM but package it in a way that it was easy to use in PCB design by electronic engineers. That product is in its first year, entering its second year. Again, although still relatively small in revenue, it is growing very quickly and is helping us diversify the portfolio into different areas and address the needs of different users. And it is helping us really
bridge the gap between electronic and mechanical engineering which is the space that Flomerics has set itself up in. Those products are helping in that. We made an acquisition early this year, an Hungarian company called MicReD (Microelectronics Research and Development Ltd) who are producing testing software for evaluation of the thermal properties of things like dies and LEDs. That very much complements the software and helps us diversify the product offering.

Is the Hungarian group the only group outside of the UK?

The Hungarian group obviously focuses on their hardware and the software to support their hardware. We also have a development center in Bangalore, India. This is something that was set up a couple of years ago which we have been building since. It represents, I would guess, about 30% to 40% of our development team.

How has that worked out?

It has worked out well. Obviously there is a competitive marketplace and you have to look at the most effective way to develop the tools. We started out relatively small two years ago and built it quite quickly. There are different challenges in managing a development group like that. But it has worked out well. We have put things like QA and testing services out there which were easier to transpose into India. But we are still focused on main development project management is all driven from the UK.

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-- Jack Horgan, Contributing Editor.


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