John Murphy charts the course of Avantes, as it takes advantage of an ever-expanding range of applications for spectroscopy
The fibre optic spectrometer has a major impact on fields well outside of optics. Suddenly, measuring the spectrum of light is no longer something that takes a long time, and no longer needs to be done in the laboratory.
The capabilities, particularly the resolution, of the devices have improved to the stage where they can be used from the UV range to the near infrared. For Avantes these devices are no longer spectroscopes; they are smart sensors, using light spectrum as a medium for measuring everything from underlying blood chemistry to the maturity of a colony of sea birds (using plumage colour).
Avantes technical director Benno Oderkerk says: ‘We have identified in our catalogue more than 100 applications and every day we are being approached by customers asking if it is possible to measure something.’
Avantes believes that the future for this little device is in almost any situation where something needs to be measured or controlled, even places where people have never heard the word ‘spectroscope’.
The story of Avantes begins at the Laser Show in Munich in 1993 when Benno Oderkerk met Luitzen Roosma. Oderkerk was the young technical director of a sensor company in Munich and Roosma had founded a photonics distribution business after working in the industry in the US for 15 years. The two decided to go into business together by establishing a company to sell highly advanced photonics in the Netherlands. The new business began in April 1994 under the name Top Sensor Systems.
One of the key product lines it was distributing was Ocean Optics, which had started at about the same time making low-cost fibre optic spectrometers. Oderkerk started to create a catalogue of add-ons to the Ocean Optics devices and from 1994-96 the business grew successfully. In 1996 Ocean Optics asked Top Sensors to become its distributor throughout Europe and the company took the name Ocean Optics Europe. This arrangement lasted until 2000. Not only was it selling a lot of Ocean Optics devices in Europe, it was also selling its own range of value-add devices. Ocean Optics in the US was selling some of these devices. Top Sensors had built up a network of 25 sub distributors across Europe.
Any distributor in any business sector will tell you that it is axiomatic that if they are successful their supplier will want to go direct. Business schools call this ‘disintermediation’. In 2000 Ocean Optics said it wanted to buy its European distributor.
Oderkerk says that really the two companies had different ideas about the future. He said that Ocean Optics wanted to sell standard catalogue products while he and Roosma were more interested in selling solutions. The two companies parted ways and chose a new name from a dictionary. They liked the name Avantes because the ‘dot com’ domain was still available and it began with the letter A so it would appear high on alphabetical lists. Ocean Optics set up its own subsidiary and Avantes initially continued to buy spectrometers under a private label arrangement with its own products. In 2002 Avantes started producing its own line of spectrometers and the separation was complete.
Oderkerk says: ‘We started from a clean sheet. Over the years we had received a lot of feedback from customers about the Ocean Optics line. We knew the weak points and knew we had to pay more attention to the electronic and software issues. I think they had a different attitude to customers than we do. We wanted to have something that was better quality, but at a similar price range.’
In 2002 Avantes opened its own office in the US and started to find distributors around the world. In 2007 it started a subsidiary in China.
The first products it made were fibre optic devices that were added on to the Ocean Optics spectrometer. When the Windows operating system came along it developed its own software package called SpectraWin in 1996 (subsequently replaced with AvaSoft).
Oderkerk says: ‘We see the software as an interface to the human being and so we thought it was essential to have control of the software. Later we started making light sources and eventually the spectrometers themselves. We have continued to add products to our catalogue usually in response to a request from a customer and today we have about 3,500 products.’
Oderkerk says: ‘We have customers in gemmology who do not even realise they are using a spectrometer. That is the future for the spectrometer; it is a smart sensor that produces data that is robust and stable. The complete application is the most important thing for the customer.
‘The number of applications is virtually endless, which sounds very nice for a growing company, but it is also dangerous because we could get involved in a million different things, but we don’t have the time or resources. We need to make choices.’
In fact the way around this problem is to let OEMs create their solutions based on the range of components and let them inject their expertise into the final machine. OEM sales account for more than half of its business. OEM customers are making the more involved machines, such as medical instruments and portable spark analysis. Oderkerk is quite happy to simply deliver the spectrometer at the heart of a measurement machine, because the OEMs bring their knowledge of the market and the application that Avantes could never match on its own.
OEMs are given a lot of support in the shape of software. A basic software interface is given away free and there are additional packages that make it easy to integrate the data from the device into standard environments, such as LabView. Avantes has its own small software engineering team that can help OEMs further with software development.
At the moment Avantes has 50 active OEM accounts using 90 different configurations of spectroscopes in 19 distinct application areas. The product line is extremely modular and so the direct sales can offer a very wide range of configurations to end users. OEM sales are strong in the US and Europe, but at present the majority of the sales in Asia are direct sales to laboratory customers.
As well as its direct offices Avantes now has about 50 distributors all over the world. The company has invested a lot in training its sales people and its distributors to a relatively high level so they can get involved with the customers in getting the application to work. Many of its distributors have PhDs. In many ways the applications for the device are so wide potential customers are everywhere. The problem is covering all of them. Year on year sales have been growing at close to 30 per cent; new business opportunities are arising all the time. The company wants to offer a customer service rather than a quick telephone sale and it makes sure that even those answering the phone have enough knowledge to help a customer. There are many variations, particularly in the gratings, that require a detailed knowledge of performance.
Oderkerk says: ‘There are many parameters involved and there are very few people around who know how to sell the correct spectrometer to an OEM customer. What is important is to know the limitations of the technology and not just say “yeah, we can do that”.’
The fast growth of the company has put a strain on its cash flow, but Oderkerk says Avantes has been generating cash and does not need huge capital items. Despite this, it sold 51 per cent of its shares to m-u-t AG, a publicly-quoted lab equipment manufacturer based in Germany. Oderkerk says the transaction was largely an exit strategy for some of the shareholders who were approaching retirement. Oderkerk says he still has ten years to go. M-u-t has considerable manufacturing resources and mechanical engineering know-how, which will help the company as it continues to expand.
Oderkerk says: ‘In the future we will be working towards much more specific sensor systems based on the spectroscope; it needs to be built into a device where the customer just presses a button and gets an indication.
‘We also think that in the high-end process control market there will be a growing market, because so many parameters have to be measured. There is going to be a big change from taking samples and sending them to a lab to be examined, maybe taking one or two hours. People want online monitoring so they know immediately if something is wrong. They don’t want to have to throw away two hours of production.
Avantes is predicting double digit growth again for 2009, despite the difficult economic environment, partly because it is trading a very wide range of industries and partly because there are industries out there which are still ‘undiscovered countries’ as far as spectroscopy is concerned.