Exclusive Interview: Discreet Purchases Several 5D Assets

Rumors have been flying around the industry regarding the future of 5D technology and assets. What’s happening to the sparks? What about Cyborg? As we first speculated back in October, Discreet certainly did end up having an interest in some of the former company’s assets. Fxguide had the great opportunity to chat with Maurice Patel, Discreet Systems Product Marketing Manager, regarding Discreet’s purchase of several 5D assets and how those assets fit into

fxguide: Did Discreet purchase 5D?

Patel: No, Discreet did not purchase 5D. Due to the financial situation that 5D faced, the company went into liquidation and ceased to exist. At that time, the liquidators placed 5D’s assets for sale. Absent any bidders willing to take on the entire business, the appointed liquidator has been selling off 5D assets separately. Several companies bid on and purchased separate assets and some, both tangible and intangible, were (or are in the process of being) purchased by Discreet

fxguide: Did Discreet look to buy 5D prior to the collapse…If so was it too expensive? Could Discreet have stopped the collapse?

Patel: No, to the best of our knowledge the collapse of 5D came as a complete surprise to everyone in the post-production industry. 5D did not approach Discreet prior to going into liquidation. In fact, like many, Discreet first received information that 5D had dismissed its entire staff and closed its offices through the Soho rumor-mill. This was later confirmed by the appointed liquidator. Obviously it was too late to stop collapse at this point.
As everyone in our industry is probably aware, these have been some of the most difficult economic times in the history of post-production. A lot of energy and effort was placed by the team at 5D in building technology that ultimately would help drive improvements in the industry unfortunately doing this profitably was a constant challenge.

fxguide: How fractured is the 5D technology? Clearly Colorfront technology is intact, but how collated are the other assets ? Often when people are laid off…there is no documentation or notes, etc.

Patel: Well, like any technology there was a certain level of inter-dependency between the various assets. 5D had both physical and intangible assets that were of interest to Discreet basically both equipment and intellectual property. Other companies were also interested in some of the assets too. Fortunately, certain parts of the technology were relatively separable and could be bid on separately. The Colorfront technology did not belong to 5D and was never part of the liquidation.
Our evaluation of the technology we acquired was that it was relatively separated from the other assets and that we could safely isolate it from the original products thereby eliminating any dependencies. As to how well it is documented our engineers are looking into it now like most things I expect that some parts are better documented than others.

fxguide: Will any former 5D employees have jobs at Discreet?

Patel: To date we have not received much communication from former 5D employees expressing any interest in employment opportunities. Discreet is constantly searching for top quality employees and like all large companies job opportunities arise regularly. We always welcome high-caliber candidates with relevant industry experience.

fxguide: How true are the rumors of multi-patent legal issues brewing between Discreet and the former 5D?

Patel: There was never any patent dispute between the former 5D and Discreet. Discreet had multiple relationships with 5D both contractual and business related. However, none of these relationships ever involved patent issues, and certainly no legal action was ever taken regarding any such issues. That said, Discreet is a technology company and works hard to maintain its technologic advantage, including obtaining patent protection for significant innovations. There is no truth to any rumor that 5D went out of business because of Discreet legal action.

Maurice Patel sent this followup based upon some points brought up here in the comments section…..

There seems to be some confusion regarding my answer to the question whether patent issues had anything to do with what happened to the demise of 5D. This is unfortunately, being confused with the liquidation process itself. The liquidation process, which was a closed and confidential process, makes it difficult for Autodesk or any of the other parties to make public statements about certain aspects of the liquidation without breaching their contract. Obviously this sparsity of official communication has led to some inaccurate rumors. For the sake of clarity I wish to elaborate on the process further

Firstly, my answer to the original question concerning 5D still stands…
Autodesk (Discreet) never filed a patent suit against 5D Solutions Ltd. nor threatened to do so. We kept a working partnership relationship with them. 5D’s demise had nothing to do with any legal action from Discreet.

Secondly, on the liquidation process…
For any software company seriously interested in acquiring state of the art technology, the normal process is to first establish the value (and therefore the price) of that technology, including a full assessment of the level of innovation involved.

ONE part of this process involves an analysis of patents. Determining how much of 5D’s technology is owned by others is essential to assigning appropriate value. During this analysis, we also determined that some features of Cyborg were consistent with patents owned by Autodesk. We factored this into a determination of price and consequently informed the liquidator of the circumstances influencing our bid offer.

Naturally, we also factored into this determination not only patent considerations but also other aspects of acquiring any technology as part of a liquidation process, including the fact that the technology is acquired without warranty, the level of dependencies in the technology etc. Ultimately, to the extent we decide to include this technology into our future applications, we want ensure that we can do so legally and without impacting our customer’s ability to safely use our technology.

This is exactly the kind of information that any potential acquirer should evaluate in determining the price for them to pay. This is standard practice and we expect than any other prospective purchasers engaged in the same process. Ultimately other bidders conclusions about the worth of the assets are their own and nothing to do with those of Autodesk.

End of update

fxguide: Has Discreet spoken to existing 5D customers already? What are the plans for doing so?

Patel: Well, as soon as we learned of the demise of 5D we did start talking to some of our clients that were also 5D customers. As a company that has provided quality, high-end systems for over a decade, we do understand the financial implications that face 5D customers who have invested in Cyborg and Colossus. Unfortunately, when 5D ceased operations, the long-term value of their technology was jeopardized. However, Discreet is interested in providing a technology transition plan for both owners, and artists to migrate to the latest Inferno/ Flame/& Flint technology as quickly and seamlessly as possible. Discreets local sales offices are available to discuss these opportunities with all former 5D customers.

fxguide: From an artist’s standpoint, how do you feel Discreet’s purchase of 5D will improve things? Are there specific tools you’re hoping to bring to your products?

Patel: Well 5Ds products definitely had some interesting features that we hope we will be able to integrate into our own products. The source code we acquired is still under review so it is too early to comment further on what we can realistically integrate and when. The new features in each version of our products are generally announced at their launch time and not before we see no reason to deviate from this policy to any features derived from 5D technology in the same way we do to those we develop ourselves.

fxguide: Why didn’t Discreet purchase the sparks technology from 5D? Had Discreet bought the 5D sparks business would this have brought them into conflict with other Sparks makers?

Patel: Several of the original founders of 5D created Speedsix with the intent to acquire and continue developing the Monsters plug-in technology. Discreet was aware of their intentions and fully supports their initiative. We definitely feel that the Monsters plug-ins are best kept in the hands of the original founders, particularly since they have unique right to the intellectual property for those plug-ins. Discreet intends to work closely with Speedsix to the benefit of our mutual customers, however we will continue to remain a fair partner to all our Sparks developers.

fxguide: Have the new owners of the 5D sparks made any comments on their intention to continue support FFFI or will they maybe go after the AE/c2 market instead?

Patel: We cannot speak to the ultimate intentions of Speedsix however we are confident that they do intend to continue to support our systems products (Flame, Flint, Inferno, Fire and Smoke).

fxguide: How important is having the 5D sparks working in the newer releases of the software? If 5D sparks did not work in 5/8 do you feel that would that hurt sales of 5/8 upgrades? Has extra work been done to make sure that they do work as smoothly as possible considering the changes in flame and inferno?

Patel: Plug-ins are an important part of our customers toolset so having them work with the latest versions of our software is very important. I don’t expect the absence of these sparks would significantly impact sales in that our clients generally buy these systems because they are extremely capable in their own right not because of any specific sparks. However it would definitely be a considerable inconvenience to our customers if the Monsters were not available. Extra work was indeed done to make the IFF plug-in transition as smooth and as problem free as possible for all our sparks developers.

fxguide: Why did Discreet purchase the Cyborg and Commander technology?

Patel: We saw potential value in some of the 5D assets – and while the products as a whole were of limited value to Discreet (being too closely modeled on our own market-leading solutions), we see potential benefit in integrating some of the features into our next-generation products, especially given the commonality of platforms.

fxguide: Will Discreet continue development of the Cyborg and Commander products?

Patel: No, this is not feasible or realistic for the following reasons:
Firstly, to do so would require Discreet to rebuild the 5D organization. The financial resources required to recreate the company are prohibitive and given that the team, including engineering was disbanded, and that several key 5D staff have already moved on to other things, there was no certainty that we would be successful in that regard.
Secondly, Discreet’s current product offerings already provide superior functionality. Although Cyborg offered several unique features, its overall capabilities were inferior to those of Discreet’s current products. However, we do believe that there is an opportunity to integrate some of Cyborg’s unique features into Discreet’s products – thus, providing customers the best of all solutions. It is for that reason that Discreet acquired these specific assets.
And finally, similar technologies would end up being developed in parallel. Cyborg had not reached a point where it could effectively and profitably compete with Discreet’s existing systems. Thus, Discreet would need to allocate a significant amount of resources (financial and personnel) in order to improve Cyborg to such a degree that it is, at least, at par with existing Discreet products. We believe our customers are better served by having Discreet continue to invest its resources in our own industry-leading solutions. Discreet’s plan is to focus on continuing to develop the best technology across platforms that incorporate quality features demanded by our customers whether based on our own or acquired technologies

fxguide: Looking back for a second, what do you think were the 3 best features of innovations in Cyborg that made you feel as though it was a strong technology to acquire?

Patel: Well we haven’t finished our full evaluation but at a very high level they had done some nice things in terms of paint interfaces, optical flow and interoperability with film scanners. Commander is particularly efficient at what it does and demonstrates some nice underlying technology.

fxguide: Will Cyborg technology be incorporated into existing products or will the focus be on future products in development such as discreet media architecture?

Patel: We intend to integrate technology wherever appropriate it is not written in stone as to what will go where – that is a matter that technical feasibility and market validation will decide. Obviously the fact that 5D code was written for Microsoft Windows leads one to suspect that integration might be easier within the DMA architecture, but this may not be necessarily the case. Moreover it is unlikely that any code will be compiled as it was purchased. Instead it is more likely that we will borrow useful algorithms and feature designs and implement them to our own specifications.

fxguide: Since Discreet didn’t purchase Colossus technology, do you plan to address the digital grading market?

Patel: Discreet has been actively investigating this market for over a year and for many months has been working on bringing an alternative solution to market. This has been progressing well and has made rapid progress since this summer. Our efforts here pre-date the demise of 5D and we intend to stay with our original plans. We expect to announce this new product in January.

fxguide: Got any old 5D t-shirts we can give away?

Patel: No – we didn’t put a bid in for those (laughs)