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December 12, 2005
Bridging the Gap
Please note that contributed articles, blog entries, and comments posted on EDACafe.com are the views and opinion of the author and do not necessarily represent the views and opinions of the management and staff of Internet Business Systems and its subsidiary web-sites.
Jack Horgan - Contributing Editor

by Jack Horgan - Contributing Editor
Posted anew every four weeks or so, the EDA WEEKLY delivers to its readers information concerning the latest happenings in the EDA industry, covering vendors, products, finances and new developments. Frequently, feature articles on selected public or private EDA companies are presented. Brought to you by EDACafe.com. If we miss a story or subject that you feel deserves to be included, or you just want to suggest a future topic, please contact us! Questions? Feedback? Click here. Thank you!


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.

What is the time difference between the UK and India?

It's about 5 hours.

Not as bad as from Silicon Valley to India.

That would be very difficult to manage. In fact just last week I returned from China where I talked to some people there. That's about an 8 hour difference which makes it difficult. Five hours is manageable.

Who do you see as competition in your niche?

There are a few players who provide solutions to the electronics industry and they are all very different in a way. The main other player in this market is Fluent with a product called Icepak. Then there are a number of smaller players as well. Some of the more general purpose CFD codes such as CF Design are also present in this marketplace. But each has its different sales points. Bigger companies like ANSYS who have general purpose, principally structural engineering codes, also overlap into this marketplace. There are a few of them but we are the only one whose 100% focused on the electronics marketplace, that's our hard core business. That is what we do. For the others, it is
part of a bigger business.

What industries are the primary targets for your software?

It's getting more and more diverse. Traditionally it has been things like communication and computer companies like Intel, Sun Microsystems and IBM. It's really become more diverse in recent years as the use of electronics starts to build itself into more and more different applications. So where we were once in communications, computers and semiconductors, we are now in defense, aerospace, auto and transportation. The automotive industry is particularly interesting. The amount of electronics in the average motor car is increasing pretty rapidly, really driving the need for products like FLOTHERM and FLO/PCB in that environment where historically it wouldn't have been used. Consumer
electronics is another area that comes to mind. Companies like Philips. We continue to see strong growth with increased miniaturization and bigger and bigger demand to simulate designs before they run off to prototype or to manufacture.

Who is the end user? Mechanical engineer? Electrical engineer?

It would depend upon the product. Some firms typically use a specialist, a mechanical engineer. At some companies they would be labeled as thermal engineers. In FLO/PCB the typical end user is an electrical engineer who is working in a group on the design and layout of the board. The need to do thermal engineering further upfront in the design cycle is changing the profile of the end user away from just the pure mechanical engineer into much more of a general engineer or specific an electrical engineer. It depends upon the organization and the setup of the organization. FLOTHERM by far accounts for the biggest part of our revenue and is used nearly always by mechanical engineers.

What is the input and output to the software?

With FLOTHERM the input is typically a mechanical CAD model from say Pro/Engineer or SolidWorks. For FLO/PCB the mechanical CAD model as well as there is also information from EDA systems in terms of layout. This month we are launching a version of FLO/PCB specifically for Cadence Allegro which reads data from the EDA system in an associative way and stores it. That's where the input is coming from. Then you've got the thermal boundary conditions such as the input temperatures of the components on the board or in the system and things like the air flow if there is a fan driving the cooling. That's the input to the process. The output will be an understanding of the thermal
characteristics of the design. That could be looking at the temperatures on components, looking at the airflow around components in and out of the device, looking at the effectiveness of the cooling. That's on the thermal side. On the electromagnetic side with FLO/EMC and also Microstripes (a high frequency general purpose code) looking at antenna design there you are looking at the electromagnetic fields as the output. Ultimately of course it is an understanding of how good a design is or perhaps actually an optimization study to look at what the optimum design is to meet certain design requirements.

If there is a problem or if there is less than an optimal design detected, what is the solution? Add heat sinks, change the fan, change electrical components, …?

The sledge hammer approach is to put in a bigger heat sink or a bigger fan. What we try to do with our software is to aid the engineers to have a better understanding of their design and look at the layout of their design and improve that as a first step. Of course bigger or more efficient heat sinks are still a requirement in many cases. There still may be a requirement to change a fan but looking at the location of each of the components in itself can improve to far greater efficiencies. Looking at FLO/PCB allows you to look at the layout of the board and play around with different designs at the conceptual stage to make sure that you have an optimum layout before you really start
detailed design and hopefully to avoid any downstream requirement to retro fit heat sinks or have to put in a bigger fan to solve the problem. At the same time there are a lot of parallel design requirements that engineers are struggling with such as acoustic requirements. Keeping the noise levels down particularly in consumer areas is a bigger challenge than thermal or EMC design requirements.

If the end user is a mechanical engineer, he would more likely change things like fans and heat sinks than an electrical engineer would.

That has been the traditional way. It is almost like an after the event. The design is already laid out. Now, what can we do with it? Last week I was at a big telecom company in China having this exact discussion with them there. What we want to do is perform the simulation earlier in the process before we get to that stage. That means looking at the thermal issues at the board level or even down to the package level to get a better understanding of what's going on and try to design out the problems earlier on in the design process. That means definitely bridging this gap between the mechanical engineer and the electrical engineer, trying to deliver mechanical thermal solutions to
electrical engineers who are not necessarily trained in the use of those tools. It's a question of training but it is also the way that the technology is packaged in the product which are the factors making this happen.

How are your products packaged and priced?

On a perpetual or annual basis! They are either node or floating licenses. Most of them are floating licenses. The distribution between perpetual and annual depends on geography to be honest. In Asia Pacific nearly every license is sold as perpetual. In Europe there is a much higher proportion of annual licenses. In North America it's a mixture. We let the customer make that decision. The pricing is set so that it is in theory neutral. It really depends upon the customer's own particular requirements on how they acquire software.

What is the list price of the products?

That depends where you are starting from. At the lower end with a product like FLO/PCB we are looking at anything from $10K to a high end of $50K. That's the kind of scope. It depends upon which modules you have.


It varies with the territory. Let me give you a ball park price figure around $30K.

How many seats would the typical company purchase?

Our biggest customers have 70 to 80 licenses. A typical user has 2 to 3 licenses of FLOTHERM. The expectation for FLO/PCB is that there will ultimately be a higher number of seats. It's a lower price product. It's aimed at electrical engineers. We expect to see larger number of that kind of product in an account. It would very much depend upon the number of EDA seats that the customer has. We would expect once the product has reached maturity maybe 5 times as many seats of FLO/PCB as you would see FLOTHERM seats.

How do you sell your product? Direct sales, VARs, dealers?

We have direct sales operations in most of the world. Throughout Europe and North America we sell direct. We do have resellers in some of the smaller European territories. In Asia Pacific it is a mixture. We have direct operations in China, in India and in Singapore. Elsewhere in Asia Pacific we sell through resellers. In Japan we have a small direct operation for our MicroStripes product. Otherwise in Japan we sell through resellers. It is fairly mixed. Where markets are established and we have had a long term presence then all those are direct operations.

You mentioned a link between FLO/PCB and Cadence Allegro. Do you have any partnerships with other EDA firms?

We are trying to work with all of them. We have the closest relationship with Cadence right now. We are part of their partner program. We are working with them on the definition of the products. FLO/PCB for Allegro was developed in cooperation with Cadence. We are working with some joint customers to define the requirements as the product goes forward. We believe very definitely that in the EDA world having partnerships with these companies is important. Although thermal issues are only a small part of what they are trying to address, it is an increasingly important part. We see it coming up more and more sales situations where our Cadence Allegro customers are asking what the
nature of our relationship is. The same thing is being asked of Cadence as well. Customers are really driving this.

What about Mentor and Synopsys?

We have relationships with them and with Zuken as well but not at the same level at this stage. Our intention is that we will be releasing versions of FLO/PCB for their tools as well in time. Allegro is the first one to market, the others will be following over the next year.

Consumer electronics is becoming an increasing percentage of the market in particular cell phones and iPods. The trend here is toward lower power to give lower battery life. Will this trend help or hurt your business?

Actually the trends are helping us. Clearly the need to reduce power is all related to the same issue, the need to control heat in those devices as everything gets smaller: the chip, the package, the device, the whatever. With those trends the need to do simulation becomes more and more important. The design challenge becomes more difficult. Whereas in the past the designer may have been able to get away with just raw experience, that's becoming more and more difficult. The optimum design to meet these requirements is not intuitive and using software tools is becoming more and more important. These are all trends which although increasingly challenging for the industry are good for
Flomerics and our business.

A cell phone gives a user about 3 hours talk time on a full charge which limits mobility. There is not enough room for a fan. Can your software help in the design of small portable devices?

Yes, in terms of understanding how a design will perform from a thermal or an EMC perspective. Our focus is on thermal but emc is equally important and in some ways even more of a challenge in terms of miniaturization, controlling the emissions from a device. The answer is most definitely yes.

We of course have to evolve our tools to the changing needs. Clearly the typical application for our software now is different than it was 10 years ago. Things like miniaturization and design requirements like aesthetics are more important. Also handling more complex geometric configurations is all part of the challenge that we need to and in fact are responding to in terms of the consumer needs.

What operating systems do you support?

We run mostly on Windows but we support Solaris and Linux.

In the old days CAE firms had relationships with hardware vendors like SUN, HP and IBM. Is there much of that still going on?

They had money. They would drive a lot of the marketing. There was a lot of collaboration. We cooperate with them on software porting to support their latest operating systems and graphics devices. There is not as much collaboration going on in the sales and marketing front as there used to be. On some specific accounts we will work with a particular hardware vendor who is trying to meet a customer's need. But in terms of supporting the operating system and developments in hardware architecture, you like to get the best of it. There is still that going on. The added advantage for us is that the hardware companies for the most part are also our customers. HP, IBM, SUN, Apple and
Dell are all customers of ours. Toshiba too! Most of the hardware computer manufacturers are using our software in the design of their hardware.

In the case of Apple, their product range from computers to iPods. In the later case you can not use traditional techniques to dissipate heat.

It reduces the options. In fact there is a lot of research going on looking at alternative methods of cooling devices. When fans are gone and there is no spare space to put heat sinks, other things are being looked at. As we work with our clients and see what they are doing, we see some interesting and novel approaches. There are a number of things people are looking at such as using different materials, looking not only at the detailed design but also at the packaging, using different ways to get the heat out of a design more quickly. The use of heat pipes within a design to conduct or move heat around inside devices and to get it to some place where it can get out more easily. There
are a number of different areas where that can happen. In many cases looking at something like an iPod, it comes down very much to looking at the best layout in order to make sure that if there are components that are in there to create heat they are not all bunched together. You are giving yourself the best shot of distributing the heat more easily, to actually conduct it out through the packaging.

You have said that the software was used initially by specialists. What has Flomerics done to enable non-experts to use the product?

FLOTHERM was actually designed for non-specialists. Up until that point, the only kind of tools you could use for thermal cooling were general purpose CFD tools. The original concept was to develop a tool that could be used by non-experts of CFD tools. That has always been behind everything Flomerics has been trying to do. Various things have been added to the products over time. New products like FLO/PCB have been added to that. Some of the things we have been doing is to build libraries. We have worked with our customers to add libraries of components so that for some of the more complex components they don't have to build the discretized models themselves. They can be pulled from
a library and plugged into a simulation. That's what we call SmartParts. There are also things that we have done using our knowledge and understanding of the thermal characteristics of those components to come up with reduced models which allow you simulate how these components behave in situ or on a board or in a system with out actually modeling them in detail. There are a number of things we have done to try and help streamline the process and make the tools accessible to a wider audience.

Has there been any significant change in the underlying technology - mesh generation, the solver.

It has evolved and is evolving. The things that electronic engineers do as their designs become more and more emulative creates more challenges for the companies like Flomerics. We are responding to those. The mesh generation and the solvers have evolved to take account of those increasing complexities and demands and continue to do so. It is an area of active research and development.

In your latest financial report the revenue by geographic segment is 39% Europe, 39% US and Asia Pacific 22%. Do you see this changing over time?

The revenue is in pounds sterling, so that the exchange rate has an impact. A couple of years ago you would have seen the US a much larger percentage. The sterling/dollar exchange rate has impacted that. There is an increasing trend towards work being done in Asia Pacific. We are seeing particularly in some of our bigger accounts, where 5 years ago our work with them was 100% in the US, now it may be split 50% in the US and 50% in India or China. We are definitely seeing a trend there in terms of the software use. A lot of design work can be held in the main location but we are seeing a lot of offshore development work. That is a change that we have to be able to make accommodation
for in our business model as we build our infrastructure around the world to support those operations. If anything, I see that the trend towards Asia Pacific is (I guess) principally at the expense of the US and also Europe to some extent. This is a trend we have seen and will continue to see.

If you have a customer who has sites in both the US and in India or China, where the labor costs are substantially lower, do you charge the same price for your software?

It is not vastly different but there are small changes. The software is pretty much the same price around the world. Clearly, that is a challenge in some geographies. The big multinational companies understand that and in any case we normally have a price for that customer regardless of where they want to use the software.

It is possible when there is a 5 or 8 hour time difference between sites to use the same piece of code. How do you address that?

That is something that we have to live with as a reality. Our software is a floating license that can be used anywhere on the customer's network, if they allow it to be used in that way. We separate the use of the software from the support of the software. We charge separately for the remote support of these different locations. But the customer has a floating license which he can use wherever he can access the network. It's a challenge the software industry has been facing in recent years. I've spent quite a lot of my time trying to wrestle with that problem. You can either try to fight it and manage it or embrace it. I believe that it is in the customer's benefit and ours to
embrace it.

Do you have anything to add that my readers might be interested in?

We have covered some things in parts which I would like to bring together. Flomerics is trying to break down the barriers between the mechanical and electronic engineering functions. That is something we continue to work on. We see with the increasing complexity of design, we see even at the customer level, a blurring in the distinction and the two disciplines coming together. As such we are working to respond to that increasing need through the tools, the products, the functionality within the products, and our engineering around the world to help customers to bridge that gap and make the best of that. That's what we are all about at Flomerics.

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Nextest Systems Corporation Files for Initial Public Offering

Novel Transistor Architecture from Freescale Breaks Through CMOS Scaling Barriers; First Transistor to Include Planar and Vertical Thin Body Structures Unveiled at IEDM 2005

Freescale's Power Management Chip Packs Powerful Punch for Mobile Devices; Single Chip Powers Voice Recording, Audio/Music Playback and Other Media Features

Zoran Technology Breakthrough Delivers Entire DVD Recorder Capability On A Single System-On-A-Chip

CEVA Introduces Fully Integrated Ultra-Low Power Voice Over IP (VoIP) Platform for Dual Mode VoIP/Cellular Phone Applications and Residential Gateways

Atmel Announces Three High Speed Low Power AVR Microcontrollers With 10-bit ADC in a 14-pin Package

Lattice Semiconductor Expands Its Revolutionary ispClock Family With Programmable, Zero-Delay Clock Generator Devices

Intel Establishes $250 Million India Venture Fund; Intel Capital India Technology Fund to Accelerate IT Innovation, Growth in India

TriQuint Semiconductor and RFMW Announce Distribution Agreement for the Americas

Quickfilter Technologies Launches First Product: 4-Channel Programmable Signal Converter; Easy-to-Use Software Lets Engineers Design and Implement Sensor Interface Circuits in Minutes, Not Weeks

Advanced Web-Based Cross-Reference Tool Available from Catalyst Semiconductor

Pericom Rolls Out Two Spread Spectrum Clock Generator/Synthesizers Targeting Video and Graphic Applications

STMicroelectronics Unveils Smallest NOR Flash Cell at IEDM 2005

LSI Logic Speeds System-on-Chip Development With New RapidChip Prototyping Platform

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-- Jack Horgan, EDACafe.com Contributing Editor.