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1 Feb 2011

LEDAS Changes Leadership to Better Guide Future Development of CAD Technology

An interview with David Levin and Dmitry Ushakov

Novosibirsk, Russia: February 1, 2011 – LEDAS Ltd., the independent provider of constraint-based design tools, component technologies, and software development services for the CAD/CAM/CAE/PDM market, today announced the appointment of Dmitry Ushakov as the new chief executive officer. Previously director of product management, Dr Ushakov replaces co-founder David Levin, who continues as chairman of the board, and will concentrate on extending and optimization the business of the LEDAS group of companies.

For more details, see the offical press release and the Web page, “The LEDAS Management Team”. In the following interview, Dr Levin and Dr Ushakov explain what the changes mean to LEDAS and for the CAD industry.

David, why did you now decide to leave the post of chief executive officer?
David Levin David Levin: Allow me to restate the question as, “Why have you now decided to appoint a new CEO?” The answer is simple: the LEDAS group of companies is now out of its initial development period. Looking forward, we face new challenges that require new energy and a new leadership style.
But LEDAS has been in business for twelve years. How can you refer to this time as the “initial development period?”
Well, if you're going to live to be 120 years old, then 12 is still infancy or childhood. Yes, LEDAS has been known for quite some time as a company that attracts a lot of attention from industry leaders; as a company that provides unique services for engineering software development; as a company that increasingly sells geometric solvers to significant customers; and as a company that confidently develops and offers a very promising form of direct geometry editing. Despite all these points, the potential of LEDAS is perhaps 10 or 100 times more than what it has been until now.

As the founder and primary shareholder, I am somewhat bored with being proud of the company’s potential and goodwill. I want to see it flourish financially.

Does this mean that you do not have the energy to implement the expanded vision?
Well, generally I have enough energy, but there are different kinds of energies. Let me go back to your original question, “Why did you now decide to leave the post of CEO?” and let me explain.

First, because of the considerable growth of the company’s activity, this is the time to separate the role of the investor (who formulates general strategic business goals) from the CEO, who is personally responsible for specifying and fulfilling the plans that achieve the goals.

Second, a new generation of LEDAS managers have matured by now, and so are ready to take the company’s guidance into their hands. Besides, these guys consider LEDAS as something they’ve helped create -- an attitude I find reasonable!

Third, new prerequisites have emerged. We need to expand, reconfigure, and optimize the structure of our entire business, which now consists not only of LEDAS. To more clearly address specific market niches, perhaps a new company will be established. If so, it would need to operate in an environment with the greatest amount of interest in our solutions. To me, this is the most interesting direction, and hopefully one for which I will have enough energy. However, it’s too early to discuss this publicly further.

Let’s move on to the question of leadership. From your point of view, what qualities are most needed for the company’s new direction?
Everyone who knows something about LEDAS understands that this company cannot leave its roots as a developer of new types of science-intensive engineering software. Concrete incarnations of such roots can lead in different directions. To simplify things, I would say that LEDAS today has twenty primary customers, yet we are certain that there could be 200 who would benefit substantially from our products and solutions.

All this is about high technology that can only be developed, promoted, and distributed by those who have achieved a very high level of professionalism -- or even, I might say, a unique type of professionalism. When you deal with innovative technologies, you have to be careful that you combine requests from today’s customers with a certain foresight of what the market will demand in one, three, five years hence. If you want to become and stay the leader, then your view of the future will impact today’s offerings. For this you need not only competence and intuition, but also courage and will.

To what extent does the new management team correspond to these requirements?
This will be judged by the results that they achieve over the next few years. In the meantime, I can look at the “LEDAS Management Team” Web page, and give you an overview of every team member, based on the abilities each has showed in the years leading up to today.

The talent of our outstanding algorithmist Ivan Rykov is well known and appreciated by our commercial customers. In particular, Ivan has the skill of being an effective communicator when determining the exact needs of each customer. Ivan is our director of R&D, components.

Alexey Kazakov has been successful in managing projects of extreme complexity. To fulfill demands of these projects, he combines his high competence as a mathematician and software engineer with the ability to satisfy the uncompromising conditions of our customers’ contracts, and of applications intended for mass distribution. Alexey is our director of R&D, applications.

Vladimir Malukh is known as a competent reviewer and analyst for our isicad.ru (isicad.net) Web portal, but few people are aware that he is an expert of most aspects of all major CAD/PLM products. This has proved invaluable in the consulting he does for commercial customers, who require a single selection optimized from existing solutions. He is also an expert at evaluating the market prospects of this or that variant of new products under development. Vladimir is our director of engineering consulting.

As for Eugene Kuznetsov, I dare say straightforwardly that you will not find in Russia today a more qualified and experienced financial director, who also combines the unique experience of being a manager and communicator in real-life social environments. Co-founder Eugene is our chief financial officer.

In old Soviet times, when many young talented people preferred prestigious academic careers, Alexey Ershov probably would have held a title of a member of the Academy of Sciences at his current age of 32. In today’s Russia, he proposes solutions for practically all kinds of problems in mathematically-based engineering software. In addition, Alexey has a sober pragmatism, high managerial skills, and a taste for working carefully with our staff. Alexey is our chief technology officer.

Dmitry Ushakov is unique in being a universal specialist. It was he who proposed all of the key technology and product solutions that LEDAS offers today. He has a broad and profound expertise in technology; I believe Dmitry is today one of the leading technology experts worldwide. He can explain both professionally and very clearly otherwise complicated solutions. Sure, Dmitry doesn’t know everything, but one of his key abilities is to vigorously and effectively immerse himself into new areas of learning and problem solving. For quite a long time, I have been working in tandem with Dmitri in effectively managing our company. And now Dmitry is our new chief executive officer.

Indeed, your management team does sound impressive. But what about the rest of your staff members?
Our staff consists of no ordinary employees. First, there are some who combine the high skills of developer, expert, and manager. Second, even against the background of our achievements, the main value of LEDAS is the team. The capabilities of our team members are based on (a) a fundamental university education, (b) strict testing when we interview prospective employees, (c) a combination of experience and competence attained while working on complex commercial projects, and (d) opportunities for professional growth. Half of our R&D team has a PhD, while the others do not wish to work in this direction, or are on track for receiving their PhDs in future.

I want to add that we find that people are sometimes confused between our science-related competence and our projects. Twelve years ago, we began in an academic environment, which is naturally inclined to experiment with idealized prototypes. Since then, we have worked our way through large, complex commercial projects. And today, from time to time, we tactfully explain to our customers how their project should be professionally organized by LEDAS, supported by appropriate infrastructure, managed, and so on.

I wonder whether the outstanding talents of your mathematicians, software developers, analysts, and others are sufficient for radically improving the business. For such developments, should one not be a master of Western market mechanisms? One needs to know how to communicate with external investors to convince them to invest in your development. What about designing product packaging, or handling the vagaries of mass-product pricing for? There even are language nuances that affect the publication of press releases, hosting of Web sites, writing technical documentation, and so on. These are the cultural differences that are difficult to overcome, which could impact the end result.
You are absolutely right. We are well aware of our weaknesses, as well as our strengths. Even with our practical experience in working with worldwide markets, including multiple visits to Western customers and a comparatively good working knowledge of English, we understand our need for assistance from Western experts. Fortunately, we are well acquainted with many recognized one, and we accumulate such contacts through LEDAS’ contracts, the broad activities of isicad, and of course through personal interactions. We long ago understood that even a comparatively small budget should be structured so that to allow for strategic development: of course, if you want to become or stay a leader. Today, our plan for business development includes consulting, and other ways of getting support from competent experts.
Should we in near future expect a revolutionary change in strategies from LEDAS? And might this negatively impact your current set of "twenty good customers"?
Well, I feel Dmitry should tell you about his concrete plans. As for me, I must state that no current customer is unnecessary or marginal to LEDAS. I feel that our obligations to our customers are sacred. And not just because they represent part of our income. Perhaps the main point I can make is that all of our current customers’ projects are closely related to further development of our key technologies. For this reason, our customers can reasonably be called "our partners". Therefore, as the owner of LEDAS, I am most definitely interested in continuing strong relations with our current customers. In any case, we know our customers well that the maintenance of our relations would be mutually useful.
Dmitry, how do you plan to develop the business of LEDAS?
Dmitry Ushakov Dmitry Ushakov: Today we have three directions for our business: (a) component technologies, (b) end user software products, and (c) software development services. All three are concentrated in the areas of CAD, CAM, CAE, and PDM. We are going to develop products in each of these areas. We have crafted a plan for the next several years.
Can you share with us some the details?
In the field of component technologies, we will continue to develop our LGS solvers. Parametric modeling in CAD is still under development, especially in AEC field. Here, we can help small companies compete against market leaders. In particular, we have ready-to-use parametric drawing technology, which can be easily embedded into any application that is based on the Teigha platform from the Open Design Alliance. It is based on our LGS 2D solver, and its functionality is similar to that found in AutoCAD 2010. Using our LGS 3D solver, any software developer can rapidly create an application for assembly design and kinematic simulation – similarly in functionality to SolidWorks and other mainstream MCAD packages.

In addition, we are working with some customers on the implementation of advanced parametric modeling functions, which will allow them to lead the market. In particular, two projects are currently active at LEDAS: (a) the development of 2D profile management technology based on LGS 2D, and (b) a novel method of variational direct modeling (VDM) technology. This latter one will bring direct modeling to the intelligence level of SolidWorks, yet maintain simplicity for end users. We believe that future generations of CAD systems will be based on this or similar technology; likewise, some of our customers are similarly convinced.

That sounds impressive. What else can we expect in the future?
In past years, we have heard about the drawbacks to history-based modeling. Beginning with Pro/Engineer in the late 1980s, these systems certainly made a revolution in the CAD world. The revolution was that the complex process of making changes in 3D models was reduced to a simple edit to the value of a feature’s parameter. Many users began to apply parameters to their everyday design work, but then they found that the process became completely broken when they transferred the model to another CAD system. The design history became lost, and so the key to editing the model was also lost.

This is not, however, the sole problem of the history-based approach. For instance, users cannot control their models when the length of the history tree exceeds a certain limit. When the limit is reached, any additional editing operations take an unacceptable long time to complete, and can product unexpected results.

But the worst thing for any CAD engineer is to deal with parametric models created by designers who do not understand the methodology of history-based modeling. They create monstrous history trees that cannot be edited at all!

The alternative is direct geometry modeling, which allows users to forget the problems I listed above. What can be simpler for the than to move-rotate-transform any geometric element seen on the screen? Unfortunately, users of direct modeling systems (like SpaceClaim and Creo Elements/Direct) pay for this simplicity with the loss of intelligence. Smart selection and similar functions do not help much, for these functions make the process more error-prone. History-based parametric modeling is used to specify design intent; direct modelers do not allow this.

Our Variational Direct Modeling technology uses specific tools that express design intent: geometric and dimensional constraints, which users are not obliged to specify. The system recognizes them from "dumb" geometry automatically. This is the key difference between our approach and the direct modeling approach developed by other CAD companies, such as synchronous technology by Siemens PLM Software and the Inventor Fusion technology preview from Autodesk. We don’t even try to integrate direct modeling with the history tree; instead, we propose that users forget about the history tree, because they now have a more powerful tool with which to make changes to their 3D models.

I believe that direct modeling systems on the future will be more intelligent than today’s history-based ones, and will significantly outperform them when it comes to simplicity of use.

I can see how you are positioning your technology. Now I am wondering how you intend to extend these offerings to users.
In the area of end-user applications, we see ourselves as novices. We only entered this market in 2008 with our first plug-in called "Driving Dimensions". It performed 3D parametric modeling in Google SketchUp, but, as they say, the first pancake is always lumpy. Even though SketchUp users continue to show interest in our plug-in (we have about a thousand downloads a month of our free version from www.drivingdimensions.com), we quickly understood that the SketchUp platform can’t enable us to fully implement everything we thought of. For this reason, we switched to Rhino from Robert McNeel & Associates. It’s used by almost 200,000 customers worldwide. We quickly released our first plug-in for Rhino, which was meant for assembly design and analysis of kinematics. We then applied our experience in product development, promotion, building sales channels, and feedback from users to create our key product, RhinoDirect. This is the first full-scale implementation of the Variational Direct Modeling technology that I mentioned earlier. It is currently in beta, and will be released soon; the market is ready to receive it, as we already have put in place a network of fourteen resellers in nineteen countries.

We recognize that a successful product should have not only innovative and technological components, but should also solve professional problems in specific domains. Having implemented our first component, now we are intensively moving along in the second direction; we have received so many requests that we have a satisfactory backlog for the next several years. In addition, we have some ideas on how to develop applications for other CAD platforms.

The key point I would like to make is that we clearly understand that our shareholders can received big dividends from end-user sales. While engineering software is developed by several thousand companies, the number of end users is in the millions. We want to make direct contact with these users, particularly to better understand their needs.

Sounds grandiose! But do you have sufficient resources to support a third domain of activity, software development services? Why spread yourself thinly?
We have sufficient resources. Today, about 40 specialists work for LEDAS, and we regularly expand our staff. You know, our domains of interest, together with the company style, always attracts young, talented people. Our environment is on the university campus and next to research institutes, which provide a rich source of the kind of people we are looking for. As for spreading ourselves thin, this actually doesn’t happen, because the three domains are closely connected. For example, many of licensees ask LEDAS for additional services, such as developing applications based on licensed products. When our technology customers see the evidence of our team’s strong competencies, then they entrust us to solve additional problems for them, such as in computational geometry and mathematics. It’s all about having effective algorithms in the areas of of collision detection, motion simulation, translation of geometric data, and so on.

Obviously there are customers that are interested not in our key technologies but in our high skills that enable high quality development of special engineering software. For example, last year we completed an interesting project for the Krasnoyarsk JSC Reshetnev (information satellite systems). This sophisticated project was related to an extension of the document structure of CATIA V5. The competence necessary to complete this project is found in only a very few companies in the entire world.

In general, we don’t plan to become like Geometric of India; we are not going to employ thousands of programmers to provide services to CAD vendors. Instead, we will maintain a reasonable balance between our directions.

You are also the lecturer of a local university course, "Introduction to Mathematical Background of CAD". Do you plan to continue to work with students, or will your new position prevent you from doing so?
One has never enough time. But working with students is one of the primary strengths of LEDAS, and so I will continue giving my lectures. The second edition of my book for students is to be published this year; it contains updates that have occurred since the first edition was issued in 2006. The mathematical background of CAD has not changed, but applications and technologies have, and this is reflected in the new edition of the book.
Thank you for your time, David and Dmitry. I wish you all the best success in your new positions at LEDAS!



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