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JETCAM reveals aggressive plans for market dominance
April 2000
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Formed in Australia in 1986, Jetcam has already made a big impact in the sheet metal fabrication arena. But now, with a stock market floatation, the acquisition of Camtek and an ambitious expansion and acquisition programme ahead, the company claims it is ready to move into a position of clear market dominance. From his headquarters in Monaco, Chief Executive Ivan Stern is planning to make a real splash in the market.
Dave Tellett went to meet the man behind Jetcam.
Ivan Stern is very relaxed man. Or rather, he appears to be relaxed. As a joint founder of Jetcam International with his partner Bill King, he should be very happy with what he has achieved. But Ivan Stern believes that there is much more in store both for himself and the company. He has taken it upon himself to drive the company forward in an aggressive way not often seen within the sheet metal industry.
In 1999, the company was floated on the London stock exchange's AIM market. It was a key moment in Jetcam's development; a move which underpins the very ambitious plans Stern has formulated for the company. But how did Jetcam International find itself in this position? What are the origins of Stern's belief that Jetcam can dominate the world of sheet metal CADCAM?
In the mid-1980s Ivan Stern was building personal computers in Australia with his brother Peter. The sheet metal casings for the computer were produced by a local sheet metal subcontractor who, Stern noticed, was finding it difficult to accommodate design modifications. He and his partner, Bill king, decided that a solution was possible. Stern: "We decided to get into software development, because I had had enough of hardware, basically! Most of the software around at the time was very primitive.... I was the designer and Bill implemented the ideas. He is a very good programmer and he was personally responsible for the core of the product...the whole thing. This has distinct advantages because if you have a number of people working on the software, you can run into problems with people pulling in different directions. Bill is extremely careful and has a great deal of knowledge of the environments the software is operating in....if you lack this basic knowledge then you can do a lot of damage to the machines."
After extensive development work, the two ended up with what Stern describes as a 'very solid system', which didn't crash and always behaved in the way it should. The two found that the users required very little support, even in the early days, due to the clear interface and ease of use of the system. Indeed it is this core which is essentially at the root of the Jetcam products today.
In 1990 Stern setup a company in Germany as a foothold in Europe and took it upon himself to establish contacts with key suppliers such as Finn Power and Pullmax. Via a dealer network and through OEM sales, the company had installations in 50 countries worldwide. By 1996 Jetcam had sold over 1,000 systems with only four people in the company; representing a turnover of $2M with a truly staggering margin of 85% profit!
Critical choices
Ivan Stern looks back to early 1997 with some amusement, although he sees this time as absolutely critical to the development of the company we see today. "It became obvious we had to do something. We were successful, but also in the situation where we had to decide either to stay as we were and serve our existing customer base where there was always the danger that competitors would come and take that away from us or, we could expand drastically." He smiles at the memory: "I didn't really foresee what was to come....I was thinking of just twelve people...now we have 55!" Stern brought in a man called John Wright to help him formulate a strategy for future development. By 1998 business had increased significantly and then, early in 1999, after establishing a Jetcam subsidiary in the UK, came the biggest decision of all for Jetcam International.
Going public Ivan Stern wants Jetcam to become the driving force for the industry. There was no doubt in his mind about the product; merely the question of the strategy. "We have no competition in the area of punching as far as I am concerned - the product is very good, but if we were to become dominant we felt we had to merge with some other companies....so we started talking to some of these companies. But we came up against a brick wall. Nobody could put a price on the business...we were getting nowhere."
In February 1999, an associate and friend of Stern suggested that Jetcam International should consider going public. There were pitfalls, but on the other hand huge benefits to a public offering of shares and Stern became convinced that this was the route to take if Jetcam was to really move forward. "We began working on it and on 4th May 1999, my birthday incidentally, we went public." The immediate impact was that suddenly the company had the currency to go out and trade. After some discussions with Camtek, a CADCAM supplier with significant products in sheet metal and metalcutting, a price was agreed and Jetcam acquired the company in October 1999. Although Stern's interest was solely in the fabrication division of Camtek, which accounts for some 20% of the firm's business, he could also see the benefit of acquiring a strong foothold in the chip-making industries which account for the majority of Camtek customers.
It is just the beginning: "We are working on more acquisitions, although nothing is concrete yet. By the end of the year, I am confident that we will have made one, two or perhaps three acquisitions. There is no point in hanging in mid-air. There are a number of companies in the field, but they are primarily small companies servicing a local area. We are probably the most successful worldwide because of our relationship with the equipment manufacturers. "The expansion is double-pronged", continues Stern, "we are looking at acquisitions, but also expanding our dealer network...we are working very hard on this now. We want to maintain what we already have both internally and externally at Jetcam; very good people, who are committed and positive...there is no deadwood in the company. "In our field, there are no other public companies. Unless they go public they won't be able to consolidate with other companies, so this puts us in a very strong position. The groundwork has been put in place and, if we continue to increase value for our shareholders, I can see no major obstacles. In two to three years we want to be the real market leader to achieve that we only need to bring together four or five companies."
Focussed product development
Ivan Stern?s intention is to continue to operate Camtek and Jetcam under separate identities, whilst establishing cooperative development facilities for fabrication products. ?We want users of whichever of these products to have the best facilities possible within its class and at the same time to maximise use of our development resources so that new features emerge in the shortest possible time?, he says. ?Eventually this may lead to a brand new product set emerging, where we will be able to tailor user and application interfaces to suit the particular application and even OEM customers.
A critical thrust to this new initiative will be the open nature of these interfaces. Retaining the successful and proven core of the existing Jetcam and Camtek products, the company will allow machine tool manufacturers more opportunity to tailor the ?look? and add functionality to the software as they see fit. This will allow the machine tool manufacturers in all the served sectors to add value to the base products, either requesting Jetcam or Camtek to do it for them or simply doing it themselves if that is how they wish to operate.
The Jetcam software itself is based upon ease of use and flexibility. Ivan Stern is very focused on these aspects particularly ease-of-use. ?If I buy any software for myself, today, and I can?t begin to use it without the manual,? he says, ?...I just throw it in the bin. I don?t have time for that. I don?t care if I?m using it to its fullest extent straight away, because I will find things with time, but I do want to start using it immediately. It?s like buying a car: You buy it and you want to drive it away....you also would like it maintenance-free! This is our software philosophy.?
The Jetcam software, for example, is fast, able to generate CNC code in just seconds. This includes read-ing and cleaning DXF or IGES files, placing tools and technology, finding the optimal nesting layout and generating the machine tool code. Critically, the software is flexible enough to drive any punching or laser machine on the market, allowing the production manager to move jobs between machines with ease - from the sim-plest stand-alone machine to FMS and FMC systems. Expert 3 and 4 also offer an MRP interface to external production control sys-tems and material and component stock databases. It is this flexibility, combined with real ease-of-use and an intuitive interface which has helped household names such as ABB, Chrysler, Ericsson, Hitachi and Volvo to streamline their pro-duction methods.
A new addition to the JETCAM product range is a 3D modelling and unfolding system - Jetcam 3D expert. It allows the user to handle components is several ways simultaneously, including 2D flat pattern, 3D wire-frame and 3D rendered. Complex operations such as bull- nose and spot weld tabs are handled automatically, as is the calculation of true bend radius, bend allowance and bend zone length. Camtek, likewise continues its product evolution and the recently announced 5 axis laser product is designed to fill a particular gap in the market with more cost-effective tools than have hitherto been available.
Despite the traditional conservatism and reluctance of many machine tool companies to align themselves with a single system, particularly one used by competitors, Ivan Stern is convinced that the core products will become standard, given that the front end can be tailored so easily. ?I would make a comparison with the controllers - there are one or two suppliers, Fanuc and Siemens, dominating this sector. The machine tool companies rely on these few products - they don?t design their own controllers, it is not their core business.? The CADCAM market is ready for a dominant player to take the lead, and Jetcam looks well-placed to lead the pack. With Stern?s commitment to driving Jetcam forward, and an enthusiastic development team, the future looks bright for the firm. Watch this space....
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