MRF: One of iTerra's key strengths appears to be expertise in microwave, digital, and optical technologies, and the ability integrate them. Was this your intention from the beginning?
Walters: It was the combination that we wanted to have as early as possible, and it took us less than a year to achieve it, essentially by merging the expertise of three separate organizations with different core competencies into one cohesive unit to create more complete component solutions. We wanted to start with the best and this was where the talent was located.
MRF: At first glance, it might appear that iTerra is concentrated on optical communications.
Walters: You have to look a little closer. We have always addressed the optical-communications market from an electronics rather than optical perspective. We felt there was value in integrating the driver amplifier, which is a microwave or millimeter-wave circuit, along with some of the high-speed digital components that are required just before the driver, such as multiplexing and encoding. It's turning out to be really valuable in markets such as instruments, military applications, and even embedded systems. While our very first products were tailored to the optical-communications market, we've expanded into other areas, including microwave products such as microwave amplifiers in die and packaged form with high power over very broad bandwidths like 10 MHz to 22 GHz.
MRF: You formed iTerra when electronics markets were weak and tumbling, yet you have not just survived but have grown. To what do you attribute your success?
Walters: If you have confidence that the markets you have chosen to serve are likely to rebound within a reasonable time, you can use the interim period to establish customer relationships and optimize product development. You can also find more highly-qualified people, buy instruments and other equipment at very reasonable prices, and lease facilities at lower cost. However, you must be able to survive through this interim period. If you can, you'll often be very well positioned to address opportunities ahead of others in the market, which is where we believe iTerra is today.
MRF: Might it be said that survival is often dependent on the willingness of the people or organizations providing the company's funding to tolerate an extended period before they see a meaningful return on their investment?
Walters: We are extremely fortunate in this regard, because the individuals responsible for funding iTerra are very unusual in the way they view their investments. Their longer-term investment strategy makes them unique (www.stellartllc.com) compared to more typical VC based "public" investment dollars that require quicker ROIs and by definition puts people in second place. The payoff is to be able to create a stable company with longer term potential and higher overall value. This doesn't mean we are not pushing hard to grow, we are already through break-even and have more than three dozen customers for whom we are delivering products, including very large commercial manufacturers and military prime contractors.
MRF: How did iTerra actually come to be?
Walters: I was at Hewlett-Packard Co. and stayed with Agilent after its creation in a position that allowed me to gain a pretty good perspective about a lot of different technologies and markets. I had gotten to know David Arnold, the founder of Wavetronix, who I greatly respected, and his company offered me the opportunity to become an equal partner. Earlier I had gotten to know Andrea Berri-Berruto while working on a Ph.D. thesis at the European Space Agency, and we had kept in touch. Around the time when the industry prophets were projecting huge potential for 40 Gb/s optical communication—while at Wavetronix—he told me, after he left his company, he had developed some very interesting amplifier technologies for the optical market, and suggested we consider creating a company to build them, among other things. The idea grew, and iTerra was spun out from Wavetronix.
MRF: Of course, the 40 Gb/s market never materialized, so how did you cope with this?
Walters: Well we were certainly as surprised as anyone to see just how fast and how far the fiber-optic market would collapse. We quickly shifted to developing products for 10-Gb/s applications because this market seemed likely to produce meaningful revenue much sooner, which it is now doing. We also began to expand our line of high-speed digital ICs and microwave and millimeter-wave power devices, and began to exploit our multi-technology capabilities to produce custom products.
MRF: You have mentioned the quality of your multidisciplined engineering team. How have you pulled such talent together?
Walters: We firmly believe you must create what we call a learning environment in which creativity and reaching out to embrace new opportunities are rewarded, and failures aren't career-ending, cataclysmic events. This isn't something we take lightly because I've seen what happens when innovation is discouraged, and it isn't conductive to success. People at iTerra are encouraged and given the tools to take risks that may ultimately result in successful products or penetration of new markets. And we don't just pay lip service to the idea of employees benefiting from what they do. We make sure those benefits are tangible. You might say we are in the business of making people successful, both our customers and iTerra.
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MRF: Can you tell me about some of the results that this amalgamation of talent has delivered?
Walters: The products we have introduced show just how strong our engineering capabilities are. For example, we have just introduced two broadband amplifiers, one in chip form and the other packaged, that are the equal of anything currently available. The iT2007, which is the unpackaged die, delivers up to 1 W, with a bandwidth of 10 MHz to 22 GHz, and delivers power-added efficiency greater than 12 percent to 12 GHz, and 10 percent to 18 GHz. Its efficiency and the fact that it consumes half the power of its closest competitor are big advantages when you're building higher-power amplifiers that use multiple devices.
We are also the first company to introduce a 12.5-Gb/s digital phase delay which has unique benefits over conventional designs, and the first to deliver an NRZ-to-RZ converter that integrates the driver and digital electronics in a small, surface-mount package. It has truly exceptional performance up to 12.5 Gb/s. We are also the first to deliver a converter for duobinary modulation, and we are creating custom products that combine high-speed digital and microwave circuits based on customer requests.
MRF: Do you see your business model as the way of the future for microwave companies?
Walters: Ours is typical of what is required to be successful going forward in a marketplace that is radically different than in the past. The model needs to include both new core value generation and maximum product leverage for value. That's not to say the traditional approaches to microwave design won't be viable in the future for some companies, especially those doing military work. However, commercial and even some military opportunities require a new approach that is more typical of the digital world. Basically, you have to structure your efforts as a company for a balanced and dynamic alignment in three key areas: market, technology, and economics. Take technology as an example. The speed at which new technology is available creates a "technology leveling" factor for everyone in the business. If you can't respond quickly you can't maintain your position.
MRF: Is military work of interest to iTerra?
Walters: It's a prime focus, because there is a great need for integration of traditionally diverse technologies in military systems. We are already addressing this with some Tier One DoD contractors, and can screen our products for hi-rel and spaceflight applications.
MRF: Where do you see iTerra in five years?
Walters: iTerra will always be a people-first company that creates an environment for success driven by creative solutions. Let's wait and see what this drives to in the future. The track record to date looks pretty exciting.