Polexis Inc.
Founded:
1996
Employees:
60
Revenues:
$6.5 million last year; projecting $8 million in 2001
Headquarters:
2815 Camino del Rio South, San Diego
President:
Carlos Persichetti
CEO:
David Overskei
Business:
Software developer with patented systems geared to defense and commercial uses; name means ‘guiding knowledge’
It was a classic problem for the Navy, for all military forces really: how to get different and separate information data systems to “talk” to each other so decisions could be made faster and more intelligently.
Over the course of some four years, Polexis, Inc., a San Diego software startup, devised a solution the Navy likes well enough to phase into its information systems. The same system is being considered and likely will be adopted by the Army and Air Force, the company said.
While the patented technology was designed and tailored for military command and control purposes, the same platform can easily be used for commercial benefits.
Genomatica, one of Polexis’ early commercial customers, is using Polexis’ patented technology known as XIS (Extensible Information System) to conduct cellular modeling, which helps scientists understand the impact of certain drugs on cells.
Carlos Persichetti, Polexis’ president, said researchers conducting simulation modeling require similar real time convergence of data as the military.
“In order to do that you have to pull information in, make decisions, instruct the order and then execute,” he said.
Paul Sakrekoff, chief information officer for Genomatica, said his firm has been using the XIS platform in managing vast quantities of data from disparate sources. The local company, a spinoff from UCSD in early 2000, builds computer models to simulate how cells behave when certain drugs are administered.
Polexis’ system could also be applied to decision-making in the financial services industry, possibly by those in bond or stock trading, Persichetti said.
Beginning To Grow
With most of the XIS’ glitches ironed out, Polexis executives feel the prospects for expanding beyond its defense contracting core are better than ever.
“When we start demonstrating this and actually integrating some of their applications in our current solution, we think our growth rate will be one of the more difficult things we’ll have to deal with,” said David Overskei, Polexis’ new CEO. “A growth rate of 50 percent annually would not be all that unreasonable.”
The growth thus far has been impressive.
Launched in 1996, Polexis had about $700,000 in revenues in its first year. Last year, the Mission Valley firm did about $6.5 million in sales, with about 70 percent coming from defense contracts.
Last July, it received a $22.5 million, five-year contract, its largest ever, from a division of the Space and Naval Warfare Systems Command. Better known as Spawar, the agency based in San Diego is responsible for designing and acquiring all the electronic gear the Navy uses and has an annual budget of $4.5 billion.
Steve Bullard, deputy chief engineer for the Spawar program contracting with Polexis, said while the XIS system is still in a test cycle, the Navy has already decided to adopt the platform and integrate it into both on-shore command centers and aboard its ships.
The Polexis platform provides the framework for gathering data from many disparate data sources and computer systems, cataloging the data into a common format and displaying it on a single site.
“The way it was working is that all this data is on separate computers or separate windows,” Bullard said. “What XIS allows is the display of information on a single window so it improves the availability of the data and the speed of the data (presentation) which allows for faster decision making.”
On Their Own
Polexis was born, like so many other startups, when a group of four engineers decided they could do the same work better and make more money if they went out on their own.
Michael Glasgow, one of the founders, said three of the engineers were working for a research and development contractor to the Navy, but felt dissatisfied with both the way their employer divvied out stock options and how their projects were being managed.
“We felt they were holding us back, that we weren’t allowed to really do what we wanted, technically,” Glasgow said.
Glasgow and his three colleagues, Dale Anderson, Rich Kadel and John Marsh, pooled about $100,000 and incorporated in August 1996 as DTA Inc., Anderson’s initials. The firm bought out Anderson last year and changed its name to Polexis.
Right from the outset, the new business was able to obtain subcontracting work based on the founders’ reputations.
“Before we went out on our own, we had established ourselves within the community (of software development for defense uses) we were working in, and we knew it would be fairly easy to get new contracts,” he said.
“Our biggest challenge was how we were going to get this thing off the ground with very little capital, and that meant learning a lot of things in short order.”
In early 1998, the company was awarded its first prime contract from the General Services Administration for $8 million, a project for information technology services.
As the company got new contracts, it needed help in managing the work flow. Persichetti, 38, was hired in September 1997 to install a more efficient business infrastructure and attract outside capital investment.
He succeeded in accomplishing both tasks.
“It’s not easy for engineers to run a company,” said Persichetti, who has both an engineering degree and an MBA. “We had four very bright people who founded a company but we had to build the infrastructure around them to make it successful. That meant getting the contracts, establishing the appropriate human relations, and fiscal management.”
Persichetti was also able to line up some $2 million in private investment into the firm.
Versatile Product
The beauty of Polexis’ technology is that it can be readily adapted to other industries.
Cubic Defense Systems is using the platform for its work on an $18.8 million contract to create a new combat training system for the South Korean army.
“XIS does a whole bunch of things that we would have had to write from the ground up, including map displays and putting graphics on maps,” said Steve Abrams, senior engineer for Cubic Defense Systems, a subsidiary of San Diego-based Cubic Corp.
“We spent four years and some $10 million developing this technology, and it doesn’t make sense to duplicate what we’ve already done. It would mean a longer time to market. It’s cheaper to use our product and then customize the solutions,” Persichetti said.
Over the past year, the company has changed its focus from working only on XIS for specific contractors to selling solutions that can be applied across a broader number of industries and customers.
Increased business has resulted in Polexis boosting its staff by 10 new employees, including eight engineers, bringing the current total to 60. Persichetti said it should add about five more people before the year is over. He expects sales this year should exceed $8 million and increase by at least 20 percent next year.
Headquartered in Mission Valley overlooking Qualcomm Stadium, Polexis also has an office in Alexandria, Va., and plans to open a new office in Hawaii by July to better support its contract for the Navy’s Pacific Fleet command center.
Bringing Overskei on board last month was yet another step in the company’s evolution from fledgling subcontractor to a larger software developer with a reliable track record.
Overskei, who has a doctorate in physics from MIT, also has some 20 years’ experience in a variety of executive and managerial positions in the defense industry, including stints at General Atomics and SAIC.
The plan is for Overskei to become the firm’s rainmaker, while Persichetti keeps an eye on existing clients and internal operations.
“He has a lot more experience than I have in bringing multiple companies together to accomplish one goal,” Persichetti said. “He can really open up doors to connections and markets we didn’t have in the past.”
