Many months before details of Microsoft Corp.'s next-generation Xbox began trickling out, a high-security courier package arrived at the headquarters of Cimtek Inc. in Burlington, Ont. Wrapped inside was one of the first-made, sleek game consoles, powerful enough to perform one trillion calculations a second.
The machine was whisked into a secure zone of the building, where Cimtek employees had signed non-disclosure agreements and passed criminal background checks.
Microsoft spent years of research and development and billions of dollars on the Xbox 360, and it hired Cimtek to make sure nothing "comes up to bite them," as one executive at the electronics testing company puts it.
Microsoft selected Cimtek about a year ago out of a list of 130 testing companies. The Redmond, Wash.-based software giant is moving into hardware, and it wanted a partner with experience from that sector, says James Egan, chief technology officer at Cimtek, which he co-founded 19 years ago.
"The deal got a lot of people here energized," he says. "But being a small Canadian enterprise, we really didn't know what we were going to get into."
Cimtek, which has about 110 employees and has served large companies in the automotive industry for years, admits it was surprised by the level of testing that Microsoft wanted. The project was far more complicated than anything Cimtek had undertaken before.
For example, Microsoft decided early on that it couldn't wait a week or more for feedback from the factory floor. Instead it wanted testing results immediately.
"Ultimately, we want to be able to catch problems early in the process," says Gabe Valentin, a program manager in Microsoft's Xbox group. "We don't want to have to wait until we've built 10,000 of these things and they're sitting in the dock and we realize, 'Oh, my goodness, we've got to change something.'"
Cimtek has installed hundreds of pieces of testing equipment on the production lines of the Chinese factories of the contract manufacturers Microsoft is using to build the Xbox 360. Using software from Peer Group Inc. - a Kitchener, Ont.-based firm specializing in factory automation software - each tester is linked into a central database. The data is accessible over a Web connection, giving project managers back at Microsoft headquarters real-time, remote access and control of what goes on thousands of kilometres away in the southern Chinese province of Guangdong.
"It effectively brings the factory floor into the test engineer's office," says Craig Thornton, vice-president of operations at Cimtek.
That kind of visibility is an important asset for Microsoft as it tries to capture market share from Sony Corp., the market leader, whose PlayStation outsells the current Xbox by a ratio of about four to one. Microsoft is hoping to get a significant jump on Sony by being first to market with a next-generation device. Sony has said its PlayStation 3 won't be ready until next year.
Microsoft's contract manufacturers are in the preliminary build stage until July, when the factories are scheduled to move to product validation before finally hitting full-scale production in September. "They have a huge mandate for getting [the Xbox]out for Thanksgiving this year," Mr. Thornton says.
Microsoft treats Cimtek more as a partner than a supplier, and the firm's staff have been sucked right into the day-to-day decision-making. That setup contrasts most of Cimtek's previous contracts, where customers have handed over information and told the firm what they want done with it.
"We are actually part of Microsoft's organizational chart, so anyone can access us. There is no limit to the information we send in to them and the information we provide is freely available within Microsoft," says Mr. Egan, who admits there was a learning process for his firm.
"Engineers like to have a very defined problem in front of them, and they find a way to fix it. At Microsoft, people are not necessarily coming up with problems, but with multiple opportunities," he says.
Microsoft operates with a very dynamic, flexible structure where ideas are thrown out all the time from all levels of the organization, rather than trickling down from the top, Mr. Egan says. Furthermore, employees are highly technologically oriented. "Everyone runs around with a laptop," Mr. Egan says. "Working with them you have to understand that things may change tomorrow, but at the end of the day there's a milestone and it must be met."
The work environment wouldn't suit anyone who likes highly structured processes, but for young engineers, it's Nirvana. They realize they can propose an idea as easily as anyone else and it stands a chance of getting implemented, Mr. Egan says.