Autometric Bares New Image
By Nick Wakeman
Once a spy satellite imaging business that shunned attention, Autometric Inc. is now moving full-bore into new markets and is breaking its silence.
The Springfield, Va.-based company is turning its government-tested technology into a new line of imagery products for entertainment companies, agricultural conglomerates and government contractors.
Since launching its first commercial product, Autometric has put together an impressive roster of customers, including CBS, National Geographic and Discovery Communications.
Just five years ago, the privately held company was doing all of its work in services with the federal government. But Chris Haakon, Autometric's chief executive officer, embarked on a growth plan and transformed some technologies that were once classified by the government into commercial products.
"We invested our own $25 million in the products without having one single customer lead," Haakon said. "It was a total leap of faith."
The company, which has 480 employees, has since sold 300 licenses of its products at prices reaching upward of $50,000. Most of the customers of those products are other government contractors, such as defense giants Lockheed Martin Corp., Bethesda, Md., and Raytheon Co., Lexington, Mass.
The product business already accounts for 30 percent of Autometric's annual sales and should grow to 50 percent in the next few years, Haakon said. If the company continues to grow at its current rate, it will post $90 million in revenue by 2000, he said.
Half of Autometric's projects are still highly secretive government efforts that company officials cannot disclose. The Department of Defense, its primary customer, and other government agencies accounted for three-quarters of the company's $65 million of revenue last year.
One project the company worked on for the military that has since been declassified is the creation of precise location targeting technology for the Tomahawk cruise missile.
While much of the work Autometric does cannot be divulged, the products and services the company has moved to the commercial sector run the gamut of image processing.
|Chris Haakon, Autometric's CEO|
|"We invested our own $25 million in [commerical] products. It was a total leap of faith."|
The company can take a two-dimensional satellite photo, overlay it with a contour map and create an image that looks three-dimensional. Its technology can integrate weather data with maps and photos. One product, licensed exclusively to Sybase Inc. of Emeryville, Calif., can turn a relational database into a spatial database that can analyze information based on geography.
"These are things we have been doing for the military for more than 40 years that are now getting the attention of the insurance and entertainment industries," said Haakon.
"Deciding to go after these commercial solutions is proving to be a good idea," Haakon said, adding that the company has always been profitable. "Since we are a boutique company, we don't have much competition. Our biggest competitor is the government itself."
Some of Autometric's products face no competition, but certain imagery products are being offered by rivals. GDE Systems, a San Diego division of Tracor Inc., is considered a strong player in the satellite imagery market. Harris Corp. of Melbourne, Fla., and Intergraph Corp. in Huntsville, Ala., also have competitive products.
"The military is outsourcing more of its mapping work now," said one official who has worked for both the Defense Department and commercial aerospace companies. "I can't say Autometric is ahead of those other companies in market share, but it is toward the front of the pack."
In recent years, author Tom Clancy has visited the company several times to get ideas for his novels. Software giant Microsoft Corp. tapped Autometric for innovative browser technology when putting together its TerraServer project, an Internet-oriented compilation of millions of satellite images around the world. When El Niño struck last winter, national weather forecasters used Autometric software to show audiences what was happening in the United States. The same forecasters showed how Hurricane Bonnie devastated the coast of North Carolina last month using Autometric's technology.
"Ten years ago, our customers didn't want reporters to know we existed," said Daniel Gordon, president and chief operating officer of Autometric. "But a lot of time has gone by. Our business is changing quite a bit."
"There are two things going on here," said Maj. Charlie Casias, a program and contracting officer with the Air Force, who is working on a project with Autometric. "There is a loosening on the government's part of keeping [technology] classified. That is allowing these companies to move into the commercial sector. But also, civilian computers are now becoming capable of handling software programs that could only be run on huge military computers in the past."
One of the biggest challenges Autometric has faced in its move to commercial products has been learning a new way to sell, Gordon said. Rather than going through long, detailed procurement processes, commercial customers simply want to know how a particular technology will save or make them money.
To focus on the new way of selling, Gordon's first move was to hire the Silicon Graphics sales representative who had sold many pieces of equipment to Autometric. He then outlined the vertical markets the company should attack. Aside from entertainment, agriculture and insurance, other potential vertical markets for the company include environment and telecommunications, he said.
Wireless telecommunications carriers need three-dimensional mapping to highlight where antennae should be located.
"I hope that in three years, one-third of our business will be in markets we're not even in right now," Gordon said.
On the entertainment front, in June, an exclusive relationship with CBS was opened up. While Autometric is still doing three-dimensional-looking weather imaging work for the company, it is now free to pursue similar projects with other networks. According to Gerald Moore, director of product marketing for Autometric, the company is in talks with CNN and ABC to provide such services.
In a way, the entertainment business is nothing new to the company, which got its start in New York as a division of Paramount Pictures during the 1950s. Raytheon bought the company in 1964 and moved it to Northern Virginia. In 1977, a small Maryland company named IDEAS Inc. bought Autometric's name and its Washington-area operations, which then included 40 workers.
Shortly after IDEAS bought the company, an employee stock option plan was established. Currently, Autometric employees own 82 percent of their company. The rest is still owned by IDEAS.