Boulder engineering firm tests high-tech products

by Alisha Jeter Rhines

BOULDER, Colo. — November 2, 2001 - Much of test-engineering firm Percept Technology's offices are coated in quiet, interrupted occasionally by shirring data storage drives.

The 3-year-old company makes its living ensuring that products from such firms as LeftHand Networks, Quantum Corporation and Benchmark Storage Innovations Inc. work as they should.

"Launching a product without adequate testing is like bungee jumping without measuring the rope," President and Chief Executive Brian Cleveland said. "The jump will be exciting, but the landing could be a surprise."

Percept focuses on reliability testing, agency compliance testing and design-verification testing.

Reliability tests project the life of a product, which is expected to be about 200,000 hours for the typical small-business drive or server. "Clients really want to know how long their products will last up front, and thus can calculate their warrantee costs long before field data exists," Cleveland said.

Boulder-based tape-drive maker Benchmark Storage Innovations Inc. has been a client nearly since Percept's inception. Benchmark Vice President of Engineering John Herron said his company's clients, such as Hewlett-Packard and Dell demand that products be fully tested. He said that clients have responded well to outside, independent testing.

Cleveland said, "Reassurance that the product has been tested fully is important to typical business users. (The business owner) has got a choice of many competing technologies, and he is probably going to look for quality over price."

Herron said that Benchmark probably couldn't conduct testing in-house at much lower a price than what it is paying Percept, and the company wouldn't have the benefit of objective testing reports if it did so. Cleveland said service prices vary with what is needed.

As an example of what Percept can do, its Wyoming test room can sustain extreme environmental conditions. Temperature can be set at 104 degrees Fahrenheit for a certain time to test how long a product can withstand heat. Other tests simulate shock, humidity, vibration and other environmental variables that may affect a product.

About 20 percent to 25 percent of Percept's work is in obtaining certification for clients that their products comply with regulations for safety and electromagnetic emissions, which ensures that a product won't disrupt communications. Various countries have different regulations, and Percept makes sure a product meets each so it can be sold worldwide. This sector is the company's fastest growing and represented just 10 percent of work a year ago, Cleveland said. Design verification testing makes sure the product works properly and meets customer expectations. This form of testing monitors such things as performance, power consumption and ability to work with standard operating software, such as Windows and UNIX.

While a softening economy and the Sept. 11 attacks on New York and Washington D.C., has affected most technology companies, including companies in the same sector as Percept's clients, Percept has withstood the downturn well.

Technology companies this year are far more cautious, and clients want to be sure their products perform as they should before pouring them into the market, Cleveland said. Costs to recall a product or fix it once in the marketplace can be huge. Benchmark's Herron explained it with an old rule of thumb: "It costs a penny in engineering, a dime in manufacturing and a dollar after it's shipped. Today, to find a problem after production is very problematic financially."

None of Percept's clients has had to recall or fix a problem after shipment, Cleveland said.

If a testing company is of high quality, the key to testing is that the company is independent and provides an objective report, said Bob Abraham, president of Freeman Reports, a California data storage-management consulting firm. Freeman has produced exhaustive analytical reports on the industry for nearly 25 years.

He said the service Percept provides would likely appeal most to mid-tier data storage companies, those between top-tier IBM Corp. and Compaq and small-time operations. Mid-tier companies use testing reports as proof that the product performs to specifications and regulations, he said. Very large firms would not rely on manufacturers' or third-party testing but would perform their own tests, Abraham said.

Percept attracted Benchmark's business because it understood the technology and business that Benchmark is in, is responsive and flexible, provides an objective, thorough approach to testing, and is local, Herron said.

Trends in the last couple of years toward outsourcing work has also bolstered Percept's position as companies shed costly in-house support departments such as testing, Cleveland said.

Percept has enjoyed double-digit percentage revenue increases during the last three years and had expected that to continue in 2002. Percept's revenue was about $900,000 in 2000, an increase of 80 percent compared with the 1999's revenue of $500,000. Cleveland declined to specify current numbers for the privately held company. Speaking days after the Sept. 11 attacks he was cautious, saying it would take time to see any effects on his business. So far, he has stepped up both marketing efforts and security at Percept's laboratories.

Percept employs 10 people and two full-time contractors working as engineers, technicians and client managers.

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