More From This Reporter
Profile | Ahsun Murad, President and Chief Executive, Optimal Satcom
Optimal Satcom has a big reach for a company with just 20 employees. Its flagship Enterprise Capacity Manager (ECM) software product is used worldwide not only to model and optimize the utilization of satellite bandwidth but also to bill the buyers of bandwidth and related services.
ECM customers include satellite operators of all sizes, providers of related services, and government users of satellite bandwidth, all of them seeking efficiencies in an increasingly complex and crowded operating environment. The more dynamic the marketplace, the better for Reston, Va.-based Optimal Satcom, says Ahsun Murad, who has led the company since its 2002 spinoff from Lockheed Martin Corp.
Optimal Satcom’s software has its developmental origins in the old Comsat Laboratories, which Lockheed Martin acquired in the 1990s as part of a since-abandoned push into the satellite services business. As a manager at Comsat, Murad helped develop the software products that have since morphed into ECM.
Murad, who says Optimal Satcom’s primary competition comes from prospective customers that use bandwidth management software developed in house, spoke recently with SpaceNews Editor Warren Ferster.
What’s the rough split of your business between satellite operators, service providers and government?
I would say we are fairly evenly split between satellite operators, service providers and the government. Telesat is our biggest customer in the satellite operator segment. Among service providers, Harris CapRock is our biggest customer. It’s interesting because we used to work individually with all the legacy companies that are now part of Harris CapRock. We played a major role in how they were able to efficiently merge these business processes together.
Can you elaborate?
It was basically taking three systems which had operational-planning, capacity-management, cost, revenue, contracts, customer, and terminal information, and combining that into a single database. That system could then be used not only in a combined fashion but also to support individual business lines like CapRock Government, which needs to operate somewhat differently from the rest of CapRock.
U.S. Central Command is your biggest government customer. How are they using the software?
Before they had our system, they were essentially relying on vendor-specific processes to provide capacity — they didn’t really have a big picture of how all their capacity was positioned, how it was being used, who was using what, or whether there were operational efficiencies. So efficiency and big-picture insight were a big piece of why they started working with us. With the ECM system that they have, all the capacity that they get from all these different sources goes into a single database and from there they are able to plan the missions that they support for all the different armed forces.
Have you encountered many barriers to working with the U.S. military?
We did, a lot of it earlier on when we didn’t have answers to as many of the questions as they had. Centcom was really a landmark project. What Centcom saw when they evaluated our system — and they spent a lot of time evaluating it — was that we were really able to take this completely off-the-shelf software that was positioned for the commercial market and use it for managing their operations. They had security concerns, and they were surprised — and we were surprised as well — at how quickly ECM was accredited for use over the U.S. government’s secure network.
How do you see your government business evolving given the uncertain budgetary outlook?
Our contracts right now are very resilient to the expected budgetary changes coming from all the talk about sequestering, and we’ve made sure of that. We’ve worked with our customers over the past many months to make sure that on the contracts where they have options they are exercising them on time and as expected. We don’t really expect this year any new activity in the government and it’s probably not likely to happen until close to the end of the next fiscal year. So government is, I think, more or less in a steady state.
Are you happy with your current business mix?
We’re pretty happy with it. It’s given us a lot of resilience to different market and economic changes around the world. We have a significant presence in Europe, in Asia, and with the different dynamics over the past few years our growth in different markets has really helped us. We’ve had about 25 percent year-on-year compounded growth each year since the beginning.
Is it fair to say that your annual revenue is less than $10 million?
That would be fair to say.
What are your expectations for the next five years?
This year we are projecting at least 30 percent growth and it could be higher — it depends on business opportunities we’re tracking — but it’s unlikely to be less than 30 percent. I expect our annual growth trend to remain essentially at the 25 percent level for the next three years. I wouldn’t be able to say for the next five years.
What’s going to drive that growth?
Networks and systems are becoming more and more complex and that means it’s getting harder and harder for people to do things that they used to be able to do with spreadsheets and other kinds of in-house systems.
You’ve cited your contract with O3b networks, which is building a constellation of satellites operating in a unique equatorial orbit, as an example in this regard. Can you elaborate?
O3b is a perfect example. It’s a system that’s different; it’s complex, but at the same time it’s positioning itself into the same geostationary market that the traditional satellite operators play in. So how do you take a system like that with all the dynamics that O3b has where everything is changing — the satellites are moving — and fit it into a simple business model that an on-the-street customer can understand? That was part of the attraction for O3b working with us — we can help them bridge that.
Satellite interference is a huge problem. How does that affect your business?
One of our most interesting and challenging customers was Protostar. They launched without proper coordination. On any given day every link budget they did using our tools had to take into account interference from seven different satellites. For us, the more complex the operating scenario, the more issues there are, the more it brings out the discriminators for our systems and capabilities.
What are some of the other growth opportunities for Optimal Satcom?
Much of our growth comes from companies at transition points — companies looking to do something different that requires them to change their business processes. For example, ABS, a regional operator, is positioning itself to become a global operator. They have a business plan that they need to support but as a relatively small company they need to be extremely efficient. That’s an example of where we have seen growth. Our revenue is tied to the volume of capacity managed. So when we have a customer who grows, adds satellites, takes on more capacity, expands into a different market, then we grow with them.
Given that your product is unique, do you find yourself on opposite sides of competitions for satellite-related projects?
We’ve routinely been in a position where we’re bidding on three or four different teams, sometimes even more, for the same opportunity, and we have to be very careful about how we deal with this because of the potential for cross-flow of proprietary information. Each of our customers needs to be comfortable working with us knowing that we are going to be protective of their information to the same extent that they would be.
In addition to ECM you have Complan, which is for customers who want to manage capacity but do not need the billing function. Who uses that?
I’ll give you an example. One of our customers recently started doing a lot of planning related to airborne terminals, and there are a lot of specialized airborne terminals coming on the market which are technically quite different from the standard parabolic terminals. There are issues related to adjacent satellite interference, compliance with regulatory limits, and skew angle effects that are different and complex. This customer uses Complan for doing extensive analysis related to designing where those terminals can fly, what throughputs they can support, what kinds of modulation and coding they can use, etc.