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20 years of growth

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Warren Clark charts the course of Allied Vision Technologies'
20 years in the vision industry

In what is still a relatively young industry, it is almost a surprise to discover that one company – Allied Vision Technologies – is celebrating its 20th anniversary. The company, originally named after its founder, began life in March 1989 as Manfred Sticksel CCD Kameratechnik, in Alzenau, Germany. For the following 12 years, Sticksel would carve out a reputation for the company as an importer and distributor of cameras and components for industrial imaging. During this time, the company also gained a reputation for modifying cameras to fit particular applications (Siemens was one of its larger customers, using modified and custom-designed cameras for its pick and place machinery), and this is where the foundations were laid for what would become Allied Vision Technologies (AVT).

By 2000, though, Sticksel himself was looking for an exit route from the company, and sought a buyer. He found it in Augusta, a stock market-listed company with interests in many areas of industry, which soon began an investment programme to provide a greater focus on the industrial vision market, and move away from a pure distribution model.

Frank Grube has been associated with the image processing industry since 1990, and was, for several years, serving in several positions in Germany and the United States. He was approached by Augusta to head its newly-acquired operation, where he began in 2001.

Grube’s first task was to rename the company. ‘I wanted to move away from this personalised company, particularly because Mr Sticksel himself was no longer a shareholder. We also had ambitions for a larger organisation. In my brainstorming, I wanted a name that began with “a”. We rejected my initial idea of Augusta Vision Technologies since, should we ever go public, it may have caused confusion with the existing Augusta stock market listing. One of my aims was to grow the company through acquisition and partnership, and this is where I settled on the word “allied”, with the intention that there could be segmented business units under the one name. So, Allied Vision Technologies was born.’

At the time, AVT had 20 employees and was based in the former East Germany. At first, this was quite a change for Grube, whose most recent role had been in the US. The majority of the employees were on the factory floor, making the camera modifications, and just three of the workforce had access to PCs, email and internet. Also, very few spoke English. It was very much a German company with limited ambition, and no experience in marketing, sales and so on.

Grube says: ‘It was clear to me very quickly that the company needed to diversify to survive – and, for me, that meant camera manufacture. Also, the existing expertise at AVT was in analogue cameras, while the trend to digital interface technology was on the verge of conquering the machine vision market, so I thought it was necessary to push us in that direction. So, by early 2002, I had set up an R&D group specifically to develop a digital camera with a FireWire interface.

‘Our first project, Dolphin, was a 1.45/2 Megapixel camera in monochrome and colour versions. Even this first model had many “smart” features, such as look-up tables, pixel correction, onboard memory, opto-isolated inputs and outputs, and so on.’

Another key decision for Grube was to choose the distinctive red colour that is now identified with AVT. ‘Our parent company Augusta has a three-striped logo in red, so we decided to carry through that red colour to our logo and our cameras. Just about everybody else was producing black cameras back in 2002, so it helped us become very distinctive, very quickly.’

Allied Vision Technologies’ headquarters in Stadtroda, Germany.

Grube’s commercial mind led him to produce the company’s next camera project, where he set out to mount a digital challenge to analogue applications, but at the same price. ‘A typical analogue set-up, with a simple frame grabber, was at that time around 800 to 900 euros. So, our goal was to develop a digital FireWire camera, in VGA or SVGA, for less than 1,000 euros.’

The result was the Marlin, a modular camera with 14 standard products in the range, but more than 120 versions available to customers. From concept to delivery of first units was only a matter of months, and the product helped establish AVT as a major player in the industrial vision market. Several more camera lines have followed, the most recent being the Stingray.

A further step in the growth of AVT was the acquisition of Prosilica last year. ‘We are leaders in the FireWire market, but we recognised that other interfaces are needed in specific applications,’ says Grube. ‘GigE will have much greater exposure in future years and, even in this recession, GigE cameras are enjoying double-digit growth.

‘For this reason, we sought suitable candidates that would give us GigE knowledge and expertise very quickly. We had started an internal project to develop a GigE camera, but the Prosilica acquisition helped reduce the time to market that we would otherwise have taken. Prosilica is a perfect fit for us. From day one we have enjoyed revenue and profitability from the company, which already had a very well-established reputation in GigE products as it was the first camera manufacturer to market a camera with Gigabit Ethernet interface. Our aim is to combine our expertise with Prosilica’s knowledge to create a unified approach throughout the company.’

Being part of the much larger Augusta, AVT is well-placed to make further acquisitions in the future, if and when a complementary business can be found. ‘The recession will provide more opportunities for acquisition,’ says Grube. ‘Consolidation has already begun. Products such as analogue cameras and frame grabbers will continue to find a place, but in much smaller percentages. For that reason, some companies may not emerge from this recession.’

Continuing on the theme of the economic downturn, Grube believes diversification is key to battling through these tough times. ‘Forty per cent of our revenue comes from the medical and life sciences market, which is still in a pretty good condition,’ he says. ‘We also serve the traffic and multimedia entertainment markets, alongside the traditional machine vision areas, and it’s these non-machine vision areas that will provide our industry with growth potential. I also have a feeling that GigE is going to remain largely protected from the recession; it’s largely a gut feeling, but I think that anyone making the shift from analogue to digital will look to GigE first.

‘We see an upturn towards the end of this year, and then more stable growth in 2010. Throughout though, we are not scaling back on product development. We are working on many new products so as to strengthen ourselves during the recession. We’re still in hiring mode, in fact, and are looking to open an Asian office later this year. We’re also looking at internal efficiencies and have just implemented a new enterprise resource planning (ERP) system.’

Grube believes customers will become more demanding when choosing where to buy their products. ‘When customers look for distinctions between camera manufacturers, it’s not really the sensor that makes the difference, since most of us use the same sensor,’ he says. ‘Instead, a supplier must offer the whole package. For us, we would like to be best in service from first contact to shipping; we would like to be competitive in pricing; we want to produce sophisticated, high quality cameras with excellent reliability.’

AVT is also a very personal and passionate crusade for Grube. ‘AVT is my baby,’ he says. ‘I really enjoy what I am doing, and I’ve built this company from 20 employees to a workforce of 140. I have made a lot of sacrifices to make the business a success, but if I didn’t enjoy it, I wouldn’t make those sacrifices.’

Plenty more fish in the sea

AVT’s products have all followed a marine theme, but this is purely by chance. Dolphin was originally the name given to the project to research the first camera, and was only ever intended as an internal reference. However, when it came to launch time, everyone had been calling it Dolphin for so long that it seemed the obvious choice for the product name itself.

Even then, though, the marine path was not set, since the draft name for the next product launch was Merlin. While sat in an airport terminal, Grube and his senior colleagues began to wonder if this name might have copyright implications. One colleague suggested altering one letter, turning Merlin into Marlin. Grube learnt something that day, since he had never heard of the marlin species of fish, but that single change of letter led to the naming patterns of all subsequent cameras from AVT.