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Nov. 11, 2002 — In 1994, Mike Jamiolkowski went to the first Commercialization of Micro Systems conference in Banff, Alberta. He had first heard the word MEMS only the year before.
Fascinated by the technology, he came home and incorporated Microcosm Technologies Inc. to develop MEMS design software.
Eight years later, the Cary, N.C.-based company now known as Coventor Inc. is getting ready for a December unveiling of its latest major software release, CoventorWare2003. Jamiolkowski is the company’s president and chief executive.
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In the intervening years, Coventor has had its share of ups and downs. At first, it evolved into much more than a software company. Coventor’s business plan grew to include providing design consultation services and support. Sensing an opportunity to generate a set of building block designs, Coventor set up three business units specifically charged with generating IP when it collaborates on a design with customers: optical, biotechnology and RF (radio frequency) MEMS. Coventor began acting as an intermediary between product companies and various foundries.
In January, 2001, the company changed its name from Microcosm to Coventor — short for co-inventor — to reflect the broadened business plan. Then the optical bubble popped.
“We had a tremendous amount of business in optical,” Jamiolkowski said. “Unfortunately, some of those large companies have cut back and their expenditures have slowed down.” Smaller companies, he said, have likewise cut back or gone out of business altogether.
“That led to a reassessment of where we should be investing our energy and capital,” said Prat Kumar, vice president of marketing. “We decided that we will not proactively invest in optical telecom and decided to freeze the investments for the time being in that area.”
Today, Coventor has regrouped around its software and its RF MEMS unit. It has scaled back to about 50 employees from a one-time height of more than 100. The biotech unit has been spun off as Teragenics Inc., an eight-person company Coventor is currently incubating.
Coventor is investing in RF MEMS — or wireless — development and is shipping platform design samples. “We feel RF MEMS is at a critical stage of customer interest,” Jamiolkowski said, adding that more than 25 companies have expressed interest in its RF work. He added Coventor is looking at options to make RF MEMS “successful on its own” and that such options “could be as significant as the Teragenics announcement.”
Kumar was more explicit about RF MEMS. He said that Coventor would like to continue maturing the group’s intellectual property to the point where, if desired, the division could be spun off. RF MEMS have applications in mobile phones and other types of communications equipment.
For now, however, the result of these efforts is to, “help us focus more on our core competency,” Jamiolkowski said. That is, software. Jamiolkowski said the software unit, if considered by itself, would be profitable.
According to Kumar, the upcoming CoventorWare2003 will offer six to 10 times faster operation for some applications while using less memory. It will provide a more seamless flow between various tools, and will have a number of new tools and capabilities. The company uses an annual licensing model with licensing terms of 1-3 years, or even longer. Approximately 10 to 15 percent of customers still use a perpetual license.
MEMS design consultant William Trimmer was a Coventor customer during a recent stint as chief technology officer for Standard MEMS Inc., which filed for bankruptcy protection recently. He said Coventor software’s strength is in the flexibility of approaches it makes available to designers.
“MEMS involve the simultaneous design of mechanics and kinematics and electrostatics and fluidics,” he said. “Some problems are solved more easily with one approach and others with a different approach.” Trimmer started a micromechanics and MEMS research program at Bell Labs in the 1980s and has authored many papers in the field. In MEMS, Trimmer said, it’s important to do as much work in software as possible in order to predict — and avoid — problems during fabrication.
Stephen Bart, an independent MEMS consultant and a former director of core technology development at Coventor, said the success of the software company is pegged to the overall success of MEMS. “When your product is software, you’re relying on, you’re betting on, the growth of the industry,” he said. “The whole thing about software is scaling. If you can’t get the number of seats up, you can’t make a viable business out of it. The only way to do that is to have a big enough market.”
As for the size of future markets for MEMS, unfortunately no software can predict that.
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Company file: Coventor Inc.
(last updated Nov. 11, 2002)
Company
Coventor Inc.
Headquarters
4001 Weston Parkway
Cary, N.C. 27513
History
Coventor was incorporated (as Microcosm Technologies) in January 1996. The name changed in January 2001 to reflect the company’s collaboration (“co-inventor”) with clients. Coventor later spun off Teragenics, an eight-person biotech and microfluidics unit. The company is now focusing on its software and RF MEMS divisions, with another potential spinoff in the works.
Industry
Technical design software and platform development
Employees
50
Small tech-related products and services
Investment history
According to VentureSource, Coventor picked up $1.5 million in first round funding in fall 1996. It followed up with $4.75 million in fall 1998 and a corporate round for an undisclosed amount the next year. In spring 2000, Coventor garnered $20 million in a private placement, as well as an undisclosed amount in a later round during the spring of 2001. Besides individual investors and North Carolina Enterprise Fund (which led the initial round), key investors have included Intel Corp., J.&W. Seligman, Needham Capital Partners and Telos Venture Partners. In the early years, the Defense Advanced Research Projects Agency and the National Institute of Standards and Technology contributed about $5million.
Barriers
Growth of the MEMS design software industry naturally depends on the growth of the MEMS industry itself.
Competitors
Why they’re in small tech
“In the early 1990s, we recognized the potential of small tech to revolutionize and enable new technologies and believed our expertise could only lead to success in that marketplace,” said Gail Massari, senior manager, marketing communications.
Goals
“To be the premier provider of software for designing MEMS and integrating MEMS into systems to provide first-pass silicon success. We want the name Coventor to be synonymous with MEMS, for ‘Coventor Inside’ to be as powerful a message as ‘Intel Inside’.
Contact
Recent news
Coventor spins off biotech unit
Coventor introduces switch family for rapid MEMS integration
— Research by Gretchen McNeely