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Q&A: What the Luxology/The Foundry merger means

Karen Moltenbrey
September 25, 2012
Q&A: What the Luxology/The Foundry merger means
CGW and Post go behind the big news of The Foundry/Luxology merger in a Q&A with The Foundry Co-founder and Chief Scientist Simon Robinson, and Luxology President Brad Peebler.

The big question everyone wants to know is, why?
Peebler: There are many reasons. It sort of happened organically. It really wasn’t like either of us woke up one morning and decided to go talk to each other. It really came about, and this is a message you have heard from me before, from the customers. We had crossed paths many times, mainly because of having the same people using our tools and wanting to use them more together. Specifically, the final catalyst was John Knoll at ILM. He called us up; he is a modo user and a big fan of The Foundry’s tools and a Katana user. Of course, they use Nuke and Mari extensively at ILM as well, and he had called us up and wanted to talk to us together about something, so he brought us in and said how much he liked modo and wanted to use it more, but he also wanted to leverage the complexity management and scalability of Katana and asked whether we could work that out for him. It was more of him prompting a technical challenge than saying ‘You should merge.’ He wanted us to solve these problems, and that set about a conversation. 

Soon we found out we were all very similar—we are both customer focused, have the same base philosophies, the notion of being very open, and treat our customers in the same way. So as we talked about solving the technical problem, which we could do as separate entities, we realized we could be a lot more profound if we were one. It would solve a lot of little mechanical challenges in doing a partnership, where your internal agenda can become more important than the partnership. So we decided to try this and do some dating.

We started off on a small development project because both of us are very engineering focused and thought what a good way to test a partnership than to get our engineers together working on something and see how they mesh. We have been doing that for several months and got Bill, Simon and I talking more on a legal and contractual side and going through the ugly parts of a relationship, and that meshed well, so what was a co-development thing turned into ‘boy, this makes a lot of sense,’ and started us thinking about all the possibilities that we could do together. 

What does this new relationship bring to each company?  
Robinson: There is a lot of crossover in terms of the market. The Foundry has been very strong in the visual effects community but less strong in the design community, which is where Luxology is really strong. We both had different market expertise, but our products have a large degree of usefulness across all the markets. This enables us to use each other’s market knowledge and use the full product suite we have across a wider range of customers. 

From The Foundry’s side, every year we have been growing slowly extending the range of product it has and the amount of the modern media pipeline into which we can provide tools. The thing we have shied away from because it is hard to do well is modeling, animation, and rendering—they are tough problems you just don’t take on lightly. This union with Luxology gives us the power to provide tools to customers in those areas. On many, many levels, it is a win-win.

What will the industry in general get out of this merger?
Robinson: One thing is stability. Having a large organization provides a very stable base and tech in the long term—and this is important for an industry that is prone to a lot of chaos. The other thing is that the extended product teams have a great range of products across a wider part of the pipeline, and that gives us an opportunity to do some things that are otherwise very tricky to do. At the moment, we are being slightly shy about what actual new developments we can bring to market. We know we have loads and loads of ideas, and the next step is for us to validate those across the user base. We need to give those ideas some airing. This is a market that demands technology that is constantly evolving. We have to determine which of those ideas benefits customers the most. There is a lot of opportunity to build new tech. 

Why a merger and not an acquisition?
Robinson: It comes back to the stability point of view. We have been so careful throughout this to be sure what we are setting up is something that on the one side will be providing new job opportunities to build new teams to build new products. But at the same time, the stability point is very important—that the way our customers are used to interacting with us, and the way product development occurs, should be something they can rely on even though we have done this merger. So really, ‘merger’ is the right word to apply. While there is all this exciting background development work going on, it’s also very much ‘business as usual.’ So the product teams that were working on stuff last month will continue to work on that this month. All those groups will not be changing.

Peebler: The notion of a buyout implies a takeover and that the principals are on a short timeframe before they leave. That is not the case. We are fully engaged on both sides, and the original founders and employees are staying. It’s more of the same—a big ‘and’ and not a ‘nor.’

Lucy Cooper, head of marketing at The Foundry, emphasizes: We have no intention of closing down the openness in our tools or Luxology’s tools, and want to keep that collaboration with other vendors. We have to do what customers want, and they want to build their pipelines with the tools that make the most sense to them. We will continue to be open, and we will not dictate how people should work. Both of use will continue to play nice with everyone else.

How will this allow both companies to expand into other areas?
Robinson: We already covered us extending our pipeline. We also know there is application for a bunch of our technology in the market—for example, the design market, which the Luxology team knows really, really well. An obvious opportunity is Mari, an artist-friendly and artist-focused and high-tech tool used for texture painting in the visual effects world, but is highly applicable and very comfortable to the modo users in the design world. The Foundry, without Luxology’s help, would have found it a challenge and distraction to work out what we have and how it is applicable to what those users want to do. So it’s an opportunity for us to do new things.

Peebler: We come from the film and games worlds, and over the last 10 years have cultivated a design [focus], and [a relationship] between entertainment and CAD. While The Foundry has been laser-focused on VFX and film, that actually provides us with an offloading, if you will, because for a small- to medium-size company to focus on all those genres has been challenging. We are incredibly excited to have such a conduit available to use into that VFX film world and a crew to help us carry our technology into that space and customize it over time to be sure it is highly specific to that space. At the same time, it allows us to give more attention to that design and CAD visualization space. 

Design customers are not that different from those in the film space. In fact, concept artists in the film world are trained as concept artists that go out into the design world. They have the same education. The tools they require are the same. There is a real renaissance happening in that design space: augmenting pencil and paper and sketching in clay with digital design. I jokingly, or not so jokingly, have said on many occasions is that the future of 3D is 2D. You can see the example here. For us to expand the use of 3D, we have to make it more friendly to people who are familiar with 2D, and allowing them to do things they are used to doing in 2D only in 3D space. And Mari and modo are two great examples of that.

Do smaller companies need to make these types of alliances to survive today?
Peebler: No. We have been on a healthy growth curve for several years and will have our most profitable year in history this year. This is not something we had to do. We are still fiercely independent and have found our magical partner. 

What do you hope to accomplish in a year from now?
Robinson: The Foundry is know in the traditional VFX space, and we want to help modo become a more prominent tool and interact better with other tools in the pipeline. And we want The Foundry to have greater awareness among customers in areas where Luxology is well known.

Peebler: By the end of the year, we will be about 200 people strong. Both of us were hiring before this and are now hiring a bit more rapidly. We will nearly double the resources for Luxology’s Nexus framework engineering. So we are doubling-down in terms of engineering, customer support, and technical resources. 

What were some of the obstacles that had to be overcome?
Robinson: Surprisingly few. It all seems to have gone smoothly. We have a lot of work ahead to be sure our efforts of communication carry on. We will number about 200 soon, and we have different geographies. The bulk of people will be in the London office, with others in Mountain View and at The Foundry’s office in Venice, California, and across the globe. We need to keep everyone integrated and communicating well. 

When will we notice the effects of this union?
Robinson: I would be disappointed that within a few months we wouldn't produce something that would be evidence of the collaboration. In six months’ time, it would be nice to show what we have been working and what the two companies can do together.