An Interview with Ian McClelland. Senior Director of Systems and Software at Thales Inflight Entertainment and Connectivity (IFEC)

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1 An Interview with Ian McClelland Senior Director of Systems and Software at Thales Inflight Entertainment and Connectivity (IFEC)

2 An Interview with Ian McClelland/1 A Conversation with Ian McClelland Thales Inflight Entertainment & Connectivity When the Sky is the limit Could you tell us a little bit about Thales and your role at the company? Senior Director of Systems and Software at Thales Inflight Entertainment and Connectivity (IFEC) Thales employs over 60,000 personnel worldwide, and the IFEC division has 1200 people with a majority of them, 950, in Irvine, CA. The rest are scattered around multiple regions worldwide, where we sell our services and repair our equipment. Our division produces systems and solutions for both airlines and OEMs such as Boeing and Airbus for Inflight Entertainment and Connectivity. Our major focus is on providing entertainment and enhanced connectivity for passengers on commercial aircrafts. In-flight, there are many reproducible hardware and software or applications that passengers use in different airlines. Our customer base spans more than 150 different airlines. And as I mentioned, we also supply to major OEMs such as Boeing, Airbus, Embraer, Bombardier and an upcoming Chinese manufacturer called COMAC. Our system is generally made up of over 1000 different components installed on an airplane, which you see at the seat backs or under the seat, as well as in the electronics bay of the aircraft underneath the cabin area that provides head-end server function. My role in the company I lead a team of about 180 people. This is a team consisting mostly of highly talented engineers and a majority of them reside here in Irvine. We also have sub-contractors to help us develop these systems. Our sub-contractors are either local, like the HCL contractors or offshore contractors residing in different parts of the world, including HCL that handles projects for us in India. We have other contracts active in France, in a town called Passac, and Clarksburg (Maryland) in the US. Most of the contracting is focused on the software area. Apart from this, we have some sub-contractors working in the systems area for projects in Irvine. We also have a large team of contractors for integration, validation and verification. These sub-contractors perform system validation of our products.

3 An Interview with Ian McClelland/2 Thales is one of the leading IFEC manufacturing companies globally. What do you think are the different factors in your continued success? We are very broad minded and listen to our customers requirements and provide solutions around our customers various needs. Yes, Thales is one of the leading IFEC manufacturers. We have come a very close second in the last several years winning over 50% businesses of the 787 segment and also doing very well with Airbus business. One of the key differentiators is believing that we have a high degree of flexibility with our systems and development to meet our customers needs. We are very broad minded and listen to our customers requirements and provide solutions around our customers various needs. Many times, we work very closely with tier one airlines such as British Airways, Qatar and American Airlines to develop new solutions to meet their requirements. And I believe that is one of the reasons why many airlines love to do business with us because of our ability to listen and provide solutions in a timely and cost effective manner. You mentioned British Airways; we also read that British Airways has decided to use Thales IFE systems for their most advanced aircrafts. They specifically mentioned the Top Series system that you have. Can you please tell us more about the system or program and how you went about developing it to give you so much success? British Airways selected us over 5 years ago and provided a set of requirements on how they would like their latest and greatest IFE systems to operate. We analyzed those requirements and we actually incorporated them into our normal application and future developments of our top series IFE systems. British Airways selected us on their 747, 777 and 787, which were deploying our systems too. We were able to take their requirements, develop new UIs - user interfaces, and new functions to all our systems, while providing a highly reliable and mature IFE system to British Airways. We are installing systems on their new aircraft and a few retrofit aircrafts, in which they were taking systems off and refurbishing interior of the aircraft. We had to consistently work very closely with BA and develop their software updates required for our Top Series to meet their needs. Towards this, we proposed phasing the software to get the most important requirements and features available immediately and then phase in the remaining ones through software updates to the installed systems.

4 An Interview with Ian McClelland/3 This is how we managed to ensure that British Airways successfully incorporated the Thales IFE systems phase-wise for their aircrafts. IFE systems originally used to be thought of as avionic systems exclusively for the cabin. Now there is an increased demand for commercial off-the-shelf systems for the cabin and aircraft.. Today we see that the customers are highly influenced by the devices that they use at home or in office like their smartphones, tablets, etc. And they expect a similar or a different experience from IFEs going forward. They bring their devices and ask for more and more out of IFE systems. Sometimes, this includes live programming, Internet and live TV to begin with. How is this affecting the IFE business as such asking for more and a lot more innovation from the IFE players, maybe the IFE industry as a whole? Yes, it has had a tremendous impact on the way we develop the systems. IFE systems originally used to be thought of as avionic systems exclusively for the cabin. Now there is an increased demand for commercial off-the-shelf systems for the cabin and aircraft. So we have to embrace the development of off-the-shelf commercial type products and we ve done that very well in all our recent systems. An example is AVANT in which we adopted the latest Android OS. We have also adopted the latest commercial off-the-shelf components such as capacitive touch screens, ARM technology that you get on your handheld. All these have been measures to ensure that we can keep up with the evolving demands of our airline clients who need to keep up with the on-board passengers, who, exactly like you said, are comparing our devices to their personal devices. We are adding applications in the Android environment that allow a lot more flexibility and abstraction of our software to ensure that we can keep up with their ever changing needs. And as the hardware evolves, we will be able to support that evolution with quicker updates and more flexibility in using the existing software/ operating systems on newer devices. On the same line, you mentioned that you are already integrating Android into your latest devices and you are completely up to date but the space is still undergoing tremendous changes and moving very fast and phones and tablets have a very short shelf life today. That is, when you install the IFE you are expected to have a higher shelf life within the aircraft. So how are you creating a balance between the two and on the same note, are you looking forward to achieve this 2 years down the line and trying to integrate and keep at least a scope of integration of features those are going up in the

5 An Interview with Ian McClelland/4 next 1 or 2 years? What we have chosen to do is keep our systems as modular as possible so individual components can be replaced as technology evolves This is a huge challenge for us. As you mentioned the average life of an IFE system is 7-12 years and that is a very difficult timeline to sustain a system and keep it up to date. What we have chosen to do is keep our systems as modular as possible so individual components can be replaced as technology evolves. We have also, as mentioned, adopted the Android OS. So we are abstracting all the applications and the UI from our system hardware and low level software, allowing for the easy porting of these applications to the newer system. We also keep up with the latest technology many times we have to pick a technology which is just released, get it qualified and ready for installation on aircraft so by the time it is installed, it is the latest and greatest technology at that time. All in all, we have done a great job anticipating the roadmaps of various technologies such as processors and solid state storage. We must analyze and gain insights on all the latest technologies, select the leading one and incorporate that into our designs in order to keep up with the ever changing technology path. We are also looking for new technologies. A couple of exciting technologies that we are tracking gesture control and eye tracking hold a lot of potential in the aviation industry. From a market size perspective, The International Air Transport Association (IATA) released a report recently saying the global air traffic is going to increase to around 3.6 billion passengers by Now that s 800 million more than what it was in That is in a matter of 5 years. On top of that, the demand for IFE itself would be high because of the increased technology demand and increased demand of customers in terms of the experience they want within the aircraft. So what is the kind of growth are you looking at in the next 2-5 years timeline? we expect a growth of 10-15%... From a market perspective, we are aware and acknowledge the growth of the aviation businesses especially Boeing and Airbus, both of which have huge orders for aircrafts. So in these areas, we expect a growth of 10-15% over that period. The key area of importance in growth is the connectivity area and that s where we see majority of the new market opening up to keep the passengers connected. We have embraced this change by coming up with new connectivity solutions that have recently been deployed those that are available now and will be available in the future with higher bandwidth to meet the passenger s demands. So we are anticipating this growth and are

6 An Interview with Ian McClelland/5 working to provide solutions in the area of connectivity for airlines and OEMs, keeping the future in mind. Understanding that most of your demands come from the commercial aviation sector; is there any other sector or specific opportunity; which is already there and is expanding at a huge rate which is going to come up in the next few years? Is there a specific area or a specific subset within the commercial industry itself? Yes, there are always other avenues. One of the key opportunities of course, is in the business aviation area that provides for another market to deploy entertainment and connectivity solutions. So we are always looking at business aviation but so far we have found that though it is very customized and engineering/ R&D heavy with very little return. We will still continue to monitor the situation in business aviation and if the need arises and justifies our effort, we will definitely look into utilizing this specific opportunity. We have a couple of projects that we are working on, including the most advanced product which we call AVA. It is a wireless streaming product to stream PED devices. The business jet market also looks very positive towards this product technology. Knowing that their passengers will bring their own devices and would like to stream entertainment, we have a product that meets precisely that requirement. HCL has brought in a huge engineering talent and incorporated a focused set of resources and made them available to us. We have successfully been using HCL s services for the past 7 years here in Thales IFEC, Irvine. Ok, great! Couple of questions about HCL You had earlier mentioned the relationship with HCL and the work we are in together. What do you think is the biggest value that HCL has brought into Thales which makes the relationship a successful venture year after year? HCL has brought in a huge engineering talent and incorporated a focused set of resources and made them available to us. We have successfully been using HCL s services for the past 7 years here in Thales IFEC, Irvine. We have experienced HCL s strategic resources and execution across multiple levels - from test engineers, specification engineers and software engineers to areas in media as well. The breadth of knowledge with which HCL is able to source from, provides for the best skilled resources when we have an immediate demand. For a particular skillset that we require, we are able to procure from HCL within hours or days. HCL comes back with resources that could meet that exact need and helps us avail those

7 An Interview with Ian McClelland/6 resources within 2-3 weeks. This is a very critical factor and is of great benefit to us when we have these demanding pop ups. The other thing HCL has been able to provide is some of its own knowledge in various areas, from testing integration to some critical areas in software. HCL has always been able to bring in some much needed innovative skills and provide a cost effective way of allowing us to provide a quick solution to our customers. One last question based on the relationship that Thales has with HCL, especially since you have been a part of this relationship for quite a long time now. What suggestion would you give to other customers within or outside the Aerospace Industry when they form a relationship with a vendor like HCL? What are the key parameters or factors they should look in to, to make the relationship more successful? I have personally worked for over 7 years with HCL and our relationship has spanned from a full offshore project to having over different onshore contractors from HCL. The result of this sustained relationship is that we have developed and followed a very good process. This helps us to quickly react and administer this relationship in the most efficient way possible. There are a couple of things. Firstly, whether it is an offshore or onshore project the customer is trying to execute, it needs to have a well-planned and strategic structure supported by a committed management. It does take some internal preparations to be ready to support business relationships with any outsourcing vendor, particularly HCL. Especially offshore projects, they require a heightened level of commitment and dedicated program management and project management resources internally. If that is underestimated or not planned, you will be setting yourself up for a very challenging and difficult project, even if it is with anyone as structured in their approach like HCL. Once you recognize this critical element of successful offshore project management, you need to support this and fully back it so that the project execution goes smoothly. I have personally worked for over 7 years with HCL and our relationship has spanned from a full offshore project to having over different onshore contractors from HCL. The result of this sustained relationship is that we have developed and followed a very good process. This helps us to quickly react and administer this relationship in the most efficient way possible. And be it any customer, they have to be open to new processes to support their offshore partner s operational efficiencies and incorporate a very well managed contracting relationship into their everyday business. Once you get all that under control, it will be a very promising and efficient business relationship.

8 Hello, I'm from HCL's Engineering and R&D Services. We enable technology led organizations to go to market with innovative products and solutions. We partner with our customers in building world class products and creating associated solution delivery ecosystems to help bring market leadership. We develop engineering products, solutions and platforms across Aerospace and Defense, Automotive, Consumer Electronics, Software, Online, Industrial Manufacturing, Medical Devices, Networking & Telecom, Office Automation, Semiconductor and Servers & Storage for our customers. For more details contact: Follow us on Twitter: & LinkedIn: View our blog-site: Visit our website:

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