National Instruments (NI) knows you like to take tests. The company's instrumentation hardware and graphical software convert standard PCs into industrial automation and test and measurement systems. These "virtual instruments" can observe, measure, and control electrical signals and physical attributes such as voltage and pressure. The company also offers programming environments (LabVIEW and Measurement Studio) for creating customizable graphical interfaces, controlling instruments, and capturing and analyzing data. In addition, NI provides test management software for running automated factory test systems. Customers outside the Americas account for around 60% of sales.
Sales were up by 17% in 2011 over 2010, and profits remained high. Sales, which increased in both product and software maintenance, were reduced by calculated overpayments by the General Services Administration (GSA) under a prior contract. (After a dispute over pricing provisions, the contract with the GSA was cancelled by NI during 2011.) The improved results were attributable to increased sales volumes and a contribution of around $50 million from acquisitions made during the year.
In 2011 NI returned to growth mode with acquisitions that bolstered its core software and hardware offerings. That year the company bought development partner Phase Matrix for about $38 million. Phase Matrix makes radio-frequency (RF) and microwave test and measurement instruments, subsystems, and components. The acquisition will drive growth in RF and microwave test instrumentation by adding high-frequency technology and manufacturing capabilities. Phase Matrix will operate as a subsidiary of NI, and continue to sell products directly to customers and OEMs.
Also that year, NI purchased AWR Corporation, a developer of software used to design RF and high-frequency components and systems for the aerospace and defense, communications, test equipment, and semiconductor industries. NI paid around $58 million for the company, which strengthened its LabVIEW software and RF testing hardware platforms. The company plans to integrate design, validation, and production testing functions in order to provide customers a way to increase productivity and accelerate time to market for RF and wireless components.
NI has offices in more than 40 countries and sells to some 35,000 customers worldwide. The company targets the automotive, aerospace, computer and electronics, automated test equipment, consumer electronics, education, government and defense, medical research, energy, pharmaceutical, semiconductor, and telecommunications industries, among others. While most of its products are manufactured at facilities in Hungary, NI produces a small amount of low-volume or newly introduced products in its home base of Austin, Texas.
Throughout its history NI has relied on relentless promotion and publicity to get its name out in front of engineers and researchers. It advertised heavily in trade publications from Cahners Publishing (now Reed Business Information US), CMP Media, Penton Media, and other publishers, while unleashing barrages of product press releases on trade editors on an almost daily basis.
The company also promotes itself through technical seminars and conferences presented around the world and over the Internet. Its biggest event is the annual NIWeek conference, staged each summer at the Austin Convention Center, near NI's headquarters. Held every year since 1995, NIWeek attracts thousands of attendees from all over the world.
Chairman, president, and CEO James Truchard owns about 20% of National Instruments. Co-founder and director Jeffrey Kodosky holds another 3%.