FEATURE ARTICLE

SYSTEMATIC - REAPING THE REWARDS OF BOLDNESS
By Julian Nettlefold

BATTLESPACE Editor Julian Nettlefold meets BATTLESPACE BUSINESSMAN of The Year 2008 Michael Holm, President & CEO OF SYSTEMATIC A/S at the Company’s Danish Headquarters in Aarhus

Julian Nettlefold travelled to Aarhus in Denmark to visit Michael Holm, President & CEO of Systematic our 2008 Businessman of the Year to find out the secret of his success in the challenging world of defence software.

“Was it always your boyhood dream to become a software mogul?” the Editor asked.
“No, funnily enough, my boyhood dream was to become a vet. I had no knowledge of electronics and computers until a career counsellor stated that a computing course I had been considering was nothing for me. To prove him wrong, I applied and the rest, as they say, is history.

I went from High School to a Danish Computer School. I then applied for, and won, a job with the Danish Government Data central organisation, now run by CSC in Copenhagen. From 1981-1985, I worked for Thomson-CSF (now Thales) in France on mini-computers which brought me into working on a contract to supply a Naval Command and Control systems to the Danish Navy. I then moved back to Copenhagen and on to Aarhus which is the Headquarters of the Danish Navy and set up Systematic twenty three years ago (August 19th 1985).”

“Were you the sole incumbent when you started the business?”

“No, I was introduced to a guy in Copenhagen with similar ideas and, after a provisional meeting in Copenhagen, we agreed to set up the business in Aarhus. There was no business plan, just a chat over a couple of beers and an agreement to work together for ten years! By that time we employed forty people and Thomson-CSF was one of our main customers.”

“Do you own all the equity in Systematic?”

“No, I own 60% and I have two co-owners, our Chairman Alex Holm Jensen with 15% and a silent partner, Erik Bank Lauritsen with 25%. Crucially we have no borrowings which enable us to adopt a long-term approach to the Company’s strategic direction. We can develop and invest in the software products that we believe the markets will look for in the future. Last year, our turnover was 380 million DKr (£40 million) with an EBIT of around 10%.

“Do you have a staff recruitment policy to ensure you have the right calibre of people?”

“Absolutely, we only employ those with the best degrees and competence in their field. Out of a staff of approx five hundred we have 70% with Masters of PhDs in Computer Studies and 21% have BSc degrees. We also employ domain specialists, who have many years of experience within their chosen domain in order to help develop our key products and keep our development relevant to the market’s needs.

“What sets you out as different from the herd?”

“Systematic set out to be a software house from day one. We are not a hardware company with software experience, which is the crucial point of difference to most of the so-called software vendors in the defence space. We also felt that we needed a clear identity, something that would set us apart from other companies. We needed a product that would make a difference and believed that there was a shortage of products in relation to military messaging, interoperability and command and control (C2).

Therefore, using our domain knowledge from our work with the Danish Navy, who was very supportive in our formative years, we decided to dedicate our efforts to creating the best possible products in the aforementioned areas.
To that end we developed the IRIS Message Formatting tool set, which was specifically designed to improve the interoperability of military systems. For the first time military organizations could purchase a commercial product that allowed them to manage interoperability standards in a smooth and efficient manner. In 2004, we initiated the development of our SitaWare product suite, which is now our key solution within the Command and Control domain.”

“Did you set out to base all your products on Microsoft products?”

“Far from it! At that point in time, Microsoft was on the periphery of military use. It was deemed too immature and insecure. We started developing our systems in Ada, which was deemed to be the best system on offer in those days and also we used variants of UNIX.

“What was your first success?”

Our major breakthrough came when IRIS was selected by the German Armed Forces, as a standard tool for handling Interoperability issues in NATO.”

“The ADSIA Nunn Initiative in the early nineties that required NATO systems to be interoperable was the catalyst for our international success. Germany was chosen as the NATO Host Nation to develop these systems, thus our IRIS system became the benchmark. Our first big customer was the British Army who purchased a system to run with its Ptarmigan system.”

“Is the UK still your biggest customer?”

“Yes it is. In the early 90s, we established a sales and marketing presence in Camberley, which is now headed up by Andrew Graham since the retirement of Tony Patterson last year. We have also opened an office in Sleaford that specifically deals with our Electronic Warfare capabilities. We now employ approximately 50 people in the UK”

“The Camberley site is also the central sales, marketing and support site for customers in Western Europe including Italy and France, the UK, Asia (including Thailand and Singapore) and Australia.”

“Our Aarhus facility, where we employ over four hundred people, services our customers in the Nordic countries, including Norway, Denmark and Sweden. Finland and the Baltic’s are handled out of our Finnish office and the “Americas” out of our US office in Washington.”

“Will Command & Control systems remain your core business?”

“Yes. It seems that our business model of combining off-the-shelf products, with a capability to partner on national-specific projects has really struck a chord with a lot of defence organizations. For example, we recently sold a force wide licence for Systematic SitaWare and Systematic IRIS to the Swedish Defence force, which followed on from a major contract with the Danish army for a Battle Management System. So it is clear that our off-the-shelf products will definitely remain as a core market segment in the future.

That said, we are continually looking to expand our product range. Given that Systematic SitaWare provides a core base of command and control functionality, it is not a huge step to take a product that was primarily developed for the land and joint environment and to use that as a basis for developing command and control products for other domains.

Again, we have had a lot of interest in our Maritime Boarding System that is currently deployed on board the Danish ship ABSALON, which is heading up Task Force 150 down in the Persian Gulf.

Unofficial reports back from the operation indicate that the system is standing up pretty well under the rigours of the operative environment. SitaWare Maritime Boarding is a tactical tool for boarding operation that provides situational awareness and command and control functionality from an ordinary pc. It comes packaged with hardware (including a communication choice of wi-fi or radio) and offers functionality like biometric evidence gathering which is based upon international standards.

Our new suite of EW support tools and EW training products which we are developing from our Sleaford facility have also attracted a lot of interest from NATO and Partnership for Peace Nations.

Outside of the defence domain, we have a complete suite of Electronic Patient Records products for the healthcare industry, our second largest customer area. Intelligence, Police and Homeland Security applications are also a major growth area. Some disaster management agencies are also looking at our Systematic SitaWare products because of the command and control functionality that we can deliver out of the box.”

“Are you finding it easy to educate US Customers to Systematic products?”

“One area which we are working to crack from our office in Washington DC, is the United States where we work closely with ESRI, our strategic partner in the region. However, we realize that it is a large market with a bevy of embedded and strong incumbents. We made a recent breakthrough in supplying training system software. However, we have to convince the US DoD in particular that we have the strength and depth to be a long-term US supplier with local supply and support facilities”

“How do you set about developing new products?”

“We work with our customers, research market needs and try to anticipate the type of products where our skills and experience can combine to create a meaningful solution in the future. All our products are based on simplicity, with the aim of helping to simplify the decision making process for the end user.

We also juxtapose two quite different models for software development. We use the CMMI model (which we are accredited to the highest level, namely level 5) to ensure process maturity and LEAN to ensure that development we undertake is cost effective, task focused and above all relevant to our customers needs.

In practical terms, we use what we call the ‘Hollywood model’ where we staff up with the Programme Manager as the Main Actor and six supporting roles; Developer, Tester, System Architect, User Experience, Release Manager and Product Manager. Each has a well defined role from the start of the Project.”

“Do you build a system from the bottom up with new operating systems and architecture?”

“No. We want to change the command and control market from large, custom-made IT development projects to competitive and price effective COTS products based on field-tested technology.

Systematic’s aim is to provide ground-breaking COTS solutions that solve the interoperability and command and control challenges of contemporary defence forces.

We have a vision where our customers will typically be able to meet 75 percent of their requirements with the Systematic COTS products, leaving just 25 percent to be addressed with customization. This saves a tremendous amount of time, money, and risk in the deployment of command and control systems.

With increasing demands on military IT solutions and the speed with which demands change, the military needs modular, ready-to-use solutions with fewer custom development requirements. We believe that we fulfil this need.”

“What sets you apart from the current range of companies supplying bespoke software tailored to specific customer requirements?”

“With budgets for defence software development under constant review, we believe that many defence organizations are beginning to shy away from large bespoke systems. There is a demand for nations to be ready for international operations immediately. For example, when Sweden purchased its licence for SitaWare, one of the main reasons that they gave for doing so was to increase the deployability of their troops in an international environment.

Gone are the days where nations need to spend 5-10 years developing their own system, especially when experience has shown that there is still no certainty that their needs will be actually met.

Our off-the-shelf products give nations a foundation for command and control and interoperability, which is based on open architecture and international standards. Through strategic in-country partnering we can ensure that we meet the needs of modern defence forces.

Of course, all the development that we invest in our product ends up expanding the baseline core functionality. Therefore as our customer community grows, everyone benefits from the synergised development.”

“What do you see as the way forward into the next twenty years?”

“We use touch screens in preference to buttons in “combat close” Command & Control systems in particular, as the user may be under fire or in an ambush situation where his nerves are jangling and his concentration must be 100% to save his life – It’s all about using technology to simplify critical decisions.

The new generation of soldiers, sailors, airmen and Police have been brought up using gaming PCs and mobile phones. Thus, they are used to fast processing powers and instant access. They are also web-wise and can navigate their way round the Worldwide Web. Thus our new systems are portal-based using fast access tools which these users have been used to in the past.”

“Have you an example of this type of application?”

“Yes, we have both SitaWare Portal and SitaWare Track Server. With SitaWare portal we have designed a Joint Headquarters Command & Control Application for land, sea and air applications. We have built in mapping systems which can be varied from terrain maps to road and rail links to an overlay of the tactical situation including, crucially, Blue Force Tracking and red force enemy ID.

The key to the system is the ability to pass messages seamlessly over the internet, thus freeing up valuable bandwidth. As the system is web-based it enables every level of commander to work on his own individual battleplan simultaneously and pass ideas and developments by messaging using visual attachments at the press of a button.

Systematic SitaWare Track Server, which can form an integral part of SitaWare Portal, is another exciting product that delivers situational awareness in an ordinary web browser.

The days of military personnel having to gather in OPS rooms at a certain point in time to get a comprehensive overview of the current situation in the battlespace are over. Systematic SitaWare Track Server now provides situational awareness via a web browser that allows all authorised personnel with a standard internet connection to get a near-real-time view of the battlespace instantaneously, no matter where they are in the world – any time.

The track server is totally unique, not least for its capacity to completely simplify the establishment of a common operational picture across air, land and sea in an ordinary web browser, with a rich user interface and performance previously unseen on a thin client.

Systematic SitaWare Track Server is a versatile solution that integrates all sorts of tracks and complex geometric figures and presents it to the end user in a simple browser. It takes input from the most common military standards e.g. Link 16 (air tracks), NFFI (ground tracks) and AIS (maritime tracks), and the C2IEDM Database and shows this information on high performance maps, thereby creating a near-real-time situational picture based on international standards.

At NATO CWID 2008, we demonstrated the live processing of 40,000 tracks on a single laptop pc, while still maintaining excellent performance. We have managed to simplify a complex problem and deliver an off-the-shelf solution that can be deployed immediately. We now expect many nations to see just how easy it is to establish a common operational picture at the joint and coalition levels.

Systematic especially see synergies in utilizing the track server with Systematic SitaWare Portal for larger headquarters such as Brigades and above where plans and orders can be prepared collaboratively and the near-real-time view of the battlespace shared immediately. In effect, the track server creates the basis for situational awareness throughout the complete chain of command.”

“How does this change current thinking and planning operations?”

“Previous systems using overlaid maps only allowed one commander to view the situation and work on a battlepan at one time. Other commanders, artillerymen and logisticians had to wait their turn to study the plan and put in their recommendations. Because of these delays, the battle picture had changed dramatically. Using our web-based system, the battleplan remains up-to-date (live) to all commanders and the arrival of new targets or enemy deployments can be is instantly relayed to the Headquarters. Of course this also cuts down on blue-on-blue attacks as the blue force live tracking enables commanders to see their deployments at the click of a mouse. We have also installed data mining techniques linked to such databases as the Jane’s library. When the operator sees any new vehicle, ship or aircraft movement, he can data mine the ID into Jane’s and find the exact model and type of the vehicle, ship or aircraft. Once identified he can then link this to the enemy Army’s inventory and pinpoint the exact formation he is up against.”

“Are there any civil applications for the track server product?”

“Yes, I believe that track server could be of interest to a lot of people outside of the defence domain. For example, when we demo the track server we utilise a map of Aarhus, if you study that map you can see a number of icons in the waters around Aarhus. Those are ships moving in Danish waters over 300 tonnes which are required to broadcast and ID signal as to their name and type. We have installed a £200 antenna on the roof of the works which is linked to a PC giving details of all shipping movements within a stated radius. If these antennas were replicated around the world, you could have an ID and real-time location for every vessel in the world on a web browser!”

“Where do you see Systematic in twenty years time?”

“Given our healthy balance sheet we intend to remain an independent software provider expanding our reach into new industries.”

“Will you ever sell?”

“The question everyone asks, ask me in twenty years time!”