Aerospace revs growth of Silver Software

UK-based Silver Software, a services company, is quite content to focus on the niche segment it has chosen for itself-developing software for high-integrity systems. This involves developing software that control systems in areas like aerospace, defense and railways, high-integrity systems

The software's success is critical in these systems since human lives could be at stake if anything went wrong. Silver Software has developed products that go into aircraft systems, medical devices, air traffic control systems and cockpit controllers.

Parminder Singh, CEO, Silver Software spoke to Priya Padmanabhan of Cybermedia News( CMN), about his company's service offering and the specialized high-integrity systems segment. Excerpts:

CMN: What kind of market does Silver Software address?

Parminder Singh: We are at the food chain at either the OEM level or by incorporating into tier-one supplier products. For example, there are companies that develop complete systems that go on to aircraft control systems. We develop sub-systems within that. To give an instance, the next-generation Boeing 787, has a company responsible for developing wing structures for it, which in turn will need some engines to run it with software that we develop.

We would bid projects for the software that gets embedded into these systems and not the mechanics and the electronics. Our customers are global tier-one suppliers predominantly in the aerospace and the railway sector.

CMN: Do you have your own products that you license to customers?

PS: Our main business focus has been fixed-price service oriented work. However, we do have some license agreements in place. This September, we are shipping software that we developed for the Super Jumbo Airbus A-380. The software that controls the landing gear has been developed as a private investment from Silver Software. We are on to a royalty-based model for the duration of the aircraft. We don't have shrink-wrap products but a licensing type agreement that is dependent on aircraft sales again through he tier-one suppliers.

CMN: Are there apprehensions in the industry about critical projects being outsourced to India?

PS: There is a conversation that is happening there at two levels. At one level-the OEMs are encouraging the outsourcing activities to India. They are sending systems development work to India. But we also sense that when it comes to the execution of some of those, typically what the tier-ones look at are the elements of the lifecycle that are less critical or less risky. Indian companies are picking up that type of work that involves lower end, testing and verification activities. But that isn't a factor at Silver Software since we position ourselves as a European company with capabilities in India. So we see ourselves on par with any other company that delivers these services.

CMN: Does being based in Europe, put you at an advantage compared to other players including Indian service providers?

PS: Being in the UK is a huge advantage. For one, it is geographical. We deal with some of the most complex projects that are intellectually challenging and difficult, in that sense. So having close proximity to clients is a huge advantage. The other thing is the maturity required for this type of work isn't really there in India. Indian defence and aviation companies haven't been historically been developing systems for the last 15-20 years. So there are no engineers in the market place with hands-on experience in these kinds of systems. This has been common for the last 30-35 years in European countries and the US. Having access to that resource pool helps us leverage those European staff base.

In a few years time, experienced engineers will be available in India.

CMN: What kind of work gets done at Silver Software in Bangalore?

PS: At Silver software we don't concern ourselves with where our engineers are sitting. Around two-thirds of our total 400 employees are in India. We have around 45 people from India at our office in the UK. We have engineers working on all stages of lifecycle of projects. The work is done is constrained by where the equipment is, where the know-how is and where the client is.

CMN: How different are the projects you undertake from the work that is carried out by aviation majors?

PS: All these companies deploy hundreds of engineers to do the type of work that we do. But they still come to us either because we have some specific skills to leverage or some kind of risk-share. Some projects are risky and very difficult to forecast. So they offload that risk by carving up elements of some of the work and giving it to us on a fixed price, fixed-schedule model. It is high risk because time and cost are not easy to forecast and can be prone to large errors. The other thing is that with expansion of this market, there is a global shortage of resource pool. We fill that gap.

CMN: What does your competitive landscape look like?

PS: They are European companies very similar to us. The one characteristic that differentiates us from them is that most of these are all offshoots of some sub-contractor companies. For example British Aerospace has launched an independent company called AeroSystems International that competes just like us in the market place. Rolls Royce has also done something similar. The others are the Indian players like Wipro and TCS. The biggest competition we see is internal competition. For example, big majors like British Aerospace have hundreds of engineers internally who want to do the work and of course their own subsidiary.

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