TAKING OFF.

Byline: Sherri Buri McDonald The Register-Guard

Like a moon, Lunar Logic Inc. is entering a new phase - one that marks it as among Eugene-Springfield's largest and fastest-growing software development companies.

The low-profile firm, headquartered off Garden Avenue near the University of Oregon, is adding about 10 employees to its 50-employee work force. Mark Lipson, 36, founded Lunar Logic in 1996 as his one-man software consulting firm. Three years ago, it had only five employees.

Lunar Logic recently advertised openings for Java programmers, a system administrator, quality assurance personnel, technical writers, and editors specializing in chemistry, biology and statistics.

The hiring is the result of steady work from Lunar Logic's main client, Thomson Learning, a publisher of college textbooks. Thomson Learning, with 2002 sales of $2.3 billion, is part of Toronto-based The Thomson Corp., an information conglomerate with 43,000 employees and $7.5 billion in sales last year.

In the past four years, Lunar Logic has helped build Thomson Learning's Web-based system that offers tutorials for students and tools for instructors to enroll students, create tests and keep track of grades. Lunar Logic has developed companion electronic products for 400 to 500 Thomson textbooks, Lipson said. So far, most of the company's work has focused on math and science instruction.

Science and math teachers "are more computer savvy," Lipson said. "They're more inspired."

Many tech companies, from hardware producers to software developers, have struggled or failed in the industry bust of the past three years. But for Lunar Logic, the reverse has been true.

Lunar Logic's boom illustrates how briskly a tech firm can grow if it lands steady work for a major customer.

But it's risky to depend on just one contract.

"There's high pressure," Lipson admits. "There's always a sense that they might become displeased and go some other direction."

Lunar Logic's main asset, however, is its familiarity with Thomson's product, Lipson said. And software and Web-based supplements to textbooks are a booming field, he said.

"Salespeople say they can't sell the textbooks without electronic products," Lipson said. "Professors are making their buying decisions based on the Web site and the electronic product in the back (of the book). And students expect nice electronic products."

Electronic products are a small slice of the higher-education market, but they're gaining ground.

The use of Thomson Learning's electronic products is doubling from semester to semester, said Pat Call, chief technology officer for Wadsworth, a division of Thomson Learning.

The company's Web-based bank of practice quizzes received half a million hits in September alone, he said.

Five to 10 percent of college students now use electronic products, Call estimates.

For that percentage to grow, students will have to start viewing electronic products as an essential, not an option, said Jim Williams, general manager of the UO Bookstore in Eugene.

"I think part of the challenge for the publishing industry is truly to make those products relevant," he said.

Lunar Logic is just one contributor to Thomson's electronic products. The company also contracts with software developers in Moscow. Call said he's impressed by the Russians' expertise in math and science.

The labor cost difference also is compelling. A midlevel software developer in Russia is paid half the amount that his or her counterpart makes in the United States, Lipson said.

Call, who assembled the textbook software team for Thomson, describes his method this way: "I've evolved into the movie model for developing projects where I pull together talented people to work on various projects."

Call has worked with Lipson on and off for the past 20 years, and he said Lipson is usually one of the people he contacts.

"Our model in the future will be to keep appropriate tasks on this side (of the ocean) and export appropriate tasks," Call added.

Call said design and customer contact will remain in the United States, while partners overseas will help build the software.

To synchronize the Russian and Eugene teams, Lipson makes about two weeklong trips to Moscow each year. He recently returned from a trip there with Call.

"It's absolutely essential to see them a couple of times a year, for morale if nothing else," Lipson said.

He said he doesn't fear much that Thomson eventually might outsource all the textbook work.

"If you would completely outsource, you'd be in pretty bad shape," Lipson said.

"At the very least, you need someone to manage the project and someone working in this time zone."

"They're great to work with," he added, referring to the Russian programmers. " But there's a pretty high cost of communication."

LUNAR LOGIC INC.

Business: Computer software development

consultant

Established: 1996

Location: 1907 Garden Ave., Eugene

Founder and owner: Mark Lipson

Employees: 60

Annual sales: $2.5 million

CAPTION(S):

Mark Lipson owns Lunar Logic, a fast-growing software development company whose major client is Thomson Learning, a textbook publisher. Lunar Logic is adding 10 jobs to its work force.