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Something Ventured:
November 12th

Insight For BC Technology Entrepreneurs

By Brent Holliday

Still Wired On Wireless

"Invisible airwaves
Crackle with life
Bright Antennae bristle
With the energy"
- Rush, The Spirit Of Radio

Slow news week, huh?  Not if you are Bill Gates.

With all of the events happening in technology this past fortnight around the world and in Vancouver, I have to try and tie quite a few things into this column.  So, in the immortal words of The Artist Formerly Known As Prince: “Forgive me if I go astray.”

Last week, I was in Santa Clara at the CTIA Wireless IT ’99 Show.  The gang at the CTIA throws a HUGE show every February in New Orleans for the wireless industry as a whole.  In 1997, they split off a tiny sliver of the big show (about the size of a bathroom stall) and dedicated to wireless data.  In October ’98, they gave the wireless data show its current name and held it in a cafeteria-sized room in Las Vegas.  This year’s show was three times the size of last year’s as measured by attendance and at least that much bigger in terms of companies and booths.  The world is waking up to wireless data.

Well, a few old boys here in Vancouver are grinning at that revelation.  {Picture an old, craggy faced gent, leaning back on his rocking chair with a piece of straw hanging from his mouth for this next bit}  “You see junior, there were three companies in these here parts that practically invented this wireless data industry.  The boys at Glenayre, some others up the hill at MPR and the rest of us at MDI. We had the vision thing.  Sho’ nuff, we did. We saw a world of dispatch, localization, paging, text based messaging and data transactions through analog and digital wireless delivery.  Must admit, the cell phone industry caught us a bit by surprise because we were always thinking data.  Now you youngin’s have this newfangled Internet set of standards to help deliver packetized data.  Well, that was easy for us to adapt to.  Now look at all my children out there making noise in the world.  There’s Infowave, Sierra Wireless, eDispatch, MDSI, uh, well there’s still Glenayre, and a few start-ups like Soft Tracks, bFound and others that have some of our people.  It’s a revolution!”

As for the rest of Canada, the wireless data revolution is being fed by companies like Novatel Wireless, Research in Motion, Saraide, and a tiny company called Nortel Networks.

The themes of this year’s show boiled down to these:

Location based services/Remote monitoring – A handful of companies showed off technologies to wirelessly monitor mobile assets, like trucks.  Some of the companies have made the dedicated devices cheap enough that remote monitoring of things as small as pallets is now possible.  The big breakthrough in this slice of the industry is of course ubiquitous, cheap data networks.  Now any schlepp can afford to have two way interactivity with their mobile workers and track their location.  Bfound (http://www.bfound.com/) is a Victoria company that is playing in this space.  Their approach is innovative and uses all of the new and emerging network standards which may give them a leg up on the older players.

Connection to the Enterprise – The big problem with Lotus Notes or any of the sophisticated sales force automation/customer relationship management software is that they require a laptop computer to run.  Ask any salesman or field person from a company how much they like their laptop.  Ask them again after they see what they can do with a Palm Pilot, Visor or Windows CE device linked wirelessly, in real-time to their messaging servers.  Groupware takes on a new meaning when it is enabled wherever the team may be at a given moment.  Instead of dreading the late-night data dump through a crappy hotel modem connection, the travelling salesman can use time more effectively when in “always-on, real time connected” mode.  I know, I know, what about the fact that a keyboard is a far easier input device?  Well, get used to typing with your thumbs and use the pen as a mouse and you will still be flying until the day when speech recognition gets better.  By the way, have you ever tried to type in text on your cell phone.  You know, three clicks just to get the letter C.  Well, a division of Motorola, called Lexicus (http://www.lexicus.com), has invented a new entry system called iTap.  It guesses the next letter that you want to enter based on a database of 40,000 words.  They also have 6 languages, soon to be 9.  I did the demo and I was blown away by the speed at which you could type a sentence with one thumb.

Infowave (http://www.infowave.com/
), in Burnaby, has enabled any enterprise using Microsoft Exchange servers to connect wirelessly to their calendars, address books, email and task lists.  It’s like extending the intranet to the mobile worker in real time.  I love this team.  Especially after they took a tired columnist out for a fabulous dinner.  They are innovating fast as the monster from Redmond approaches.   Another company, ThinAirApps (http://www.thinairapps.com/) from New York, has written middleware that enables Notes, Exchange or any MAPI mail program to run on various wireless data networks.  Other companies, like AvantGo are also trying to accomplish the extension of the corporate network.  One might wonder how in the world an existing corporate information system will handle all this new real-time input to its servers and databases.  Solving this problem of synchronization is Extended Systems (http://www.extendedsystems.com/) in Boise, Idaho.  Yup, potatoes, Micron, HP’s printer division and Extended Systems.  That’s Boise. In a few years, people will wonder how we survived in the late 90’s, only able to get our data from a PC tied to a phone or cable line.

The Internet Gets Ubiquitous – The most buzz and the most noise is clearly in the wireless delivery of and interaction with Internet content.  Forget www.shoes.com and get into the WAP world if you want to get rich. WAP stands for Wireless Access Protocol and it one of the main standards for delivering two-way Internet Access to wireless devices.  The WAP enabled phones will hit the streets in 3 months and Fido will never be the same old dog.  Everyone was talking about delivering their particular Internet based application to WAP enabled phones and PDAs. One company was actually demonstrating it. They are a phone manufacturer, called NeoPoint. Their service, which they intend to OEM to the carriers, is MyAladdin.com  It comes with a GPS receiver for your car lighter.  Imagine this: you are driving down the road in West Vancouver and your stomach growls.  You pick up your phone (with 12 line display, not 5 like the current models) and punch the Food option.  A second or two later it comes up with a list of five restaurants within 2 blocks of your current location that match your preferences for food type and price. You punch the first choice and the phone is already dialing for your reservation. 

How about this scenario: you are at the airport.  You just checked your flight status on your phone because it is tied into the same network as the airport terminals that you are too lazy to get up and look at.  Besides, your phone is personalized to you.  Since you have a few minutes, you browse the messages sent to you.  They include messages only sent to your phone by personalized services that you signed up for.  You see that someone has outbid you for the front row seats to the Elton John concert.  The auction closes in two minutes.  You outbid them and pay for it with one-click, because all of your payment information is stored in your phone’s eWallet. 

The point of the examples is personalization and ubiquity. All of this functionality happens using the Internet.  It’s just not the browser interface that you are used to on a PC.  Hatim Tyabji, CEO of Saraide (http://www.saraide.com), spoke at Softworld ’99 here in Vancouver on Monday.  He talked of his company’s emphasis on enabling a wireless personality for everyone.  That’s it exactly.  The PDA/WAP phone is a very personal device.  If you are like me, it is literally attached to your hip.  Hatim’s company is a service bureau that essentially sits in the middle between the content/application providers on the Internet and the Carriers that are selling you a phone and network time.  Saraide will take content that can be wirelessly personalized (think banking, stocks, local information of any type like movie listings and restaurants, weather, e-commerce and on and on) and enable it on the myriad of data networks and devices that the various carriers still employ or will employ in the future.  They take the Internet, filter out what is not relevant to a small, portable, wireless device and deliver only what is useful to the end user.

Now the future gets even better, when they put GPS chips in these phones. Or a web server.  And then, imagine when data rates reach sustained rates of 200 Kps or faster.  You can stream video and audio to these devices…  Is your mind spinning?

We had a local event that ate up some of my time this week.  Softworld ’99 brought IT vendors, resellers and partners of all stripes together from around the world to do deals.  I learned quite a bit.  Did you know that you can pay for outsourced software development in Vietnam or India for about $3000 CDN a man month?  If big companies decide to go there for there large scale projects, then all you software engineers will have to end up in software start-ups, where outsourcing software development is not a great idea.  I talked to some of the small companies on the floor of the Software showcase and asked if they were getting their money’s worth.  There was a resounding yes.  There weren’t hordes of people, but everyone was there to do a deal.

Tied in with Softworld was the Canada IT Forum.  In its second year in Vancouver (They do the show every June in Toronto), the show doubled in size.  Twice as many companies, twice as many investors.  A lot of local start-ups had their 15 minutes alone in front of millions of dollars in private venture capital.  My favourite presentation was by a couple of young kids from Edmonton.  They displayed the exuberance and shoot for the moon attitude that usually comes from south of the border.  When the 21 year old presenter said that the CTO, his brother, was not done high school yet, the audience giggled.  I looked at their stuff later and it was impressive.  These kids have a bright future and it is never too early to start thinking big.  A local boy named Don Mattrick had the same chutzpah at their age…

Overall, the quality of the presenting companies was much better than last year.  There were some compelling opportunities in some of my favourite areas: B2B e-commerce, wireless data and the emerging software as service or ASP market.  I won’t tell you which companies that I liked the best.  Hopefully, you’ll see that through my actions in the near future, rather than some words here.  After all, I can’t tip my hand before the negotiations begin!

Random Thoughts

-         New Media: Your humble authour has branched beyond the world of type.  I survived the editing knife in a new documentary on the Brain Drain in Canada.  On November 22nd, at 10 pm on Global is a one hour documentary discussing one of the hottest issues of the day here in Canada.  Tune in to see if I should stick to typing.

-   Microsoft’s Defeat in Round 1 of the Anti-trust Lawsuit: Impact on BC’s Technology Scene – I told you this last year.  He is going to move the whole company here and re-incorporate in BC in order to avoid the lawsuit and its effects.  Taxes, schmaxes.  Bill can afford to live here.  The rest of us are suffering, but he’ll do all right.

-   The Internet Bubble: Tony Perkins of The Red Herring also talked at Softworld ’99 this week.  He is shamelessly promoting his new book about the Internet Stock craze.  He gave some amazing stats about the valuations of some of the companies.  I forgot what he said exactly, but I happened to have read a similar story in the Industry Standard (http://www.thestandard.com/metrics/
) that says that Amazon.com would have to grow at 38% per year for 10 years from 2003 to 2013 to support its current valuation.  Microsoft revenue has grown at an average of 33% over the last 5 years.  That mean Amazon.com would have to have revenues of $100 billion in 2013.  Possible?  Consider that the entire market for books is expected to be $85 billion in 2013.  The point that Tony is making is that eventually the rubber has to meet the road for the internet companies and their valuations.  He is fearful for companies like Amazon in the e-tailing game and Yahoo in the ad-based game.

-   Guess what is the most visited web site in BC?  MyBC.com?  Sizzle.com?  BCtechnology.com?  No.  Userfriendly.org is the winner!  The home of the ubergeek comic strip written by a Vancouver local. If you are not a techie, you just don’t get this comic. But tens of thousands of geeks around the world visit every day.

-   The BC ESTI (Early Stage Technology Index) is at 8 out of 10 this month.
{1 would be the worst possible time to start a tech company, 10 would be the tech economy firing on all cylinders and virtually every decent start-up getting funding.}
Things are good.  The buzz of Softworld is still with us and the stock markets are racing ahead.  Local tech companies are making huge gains in the markets.  I dropped the early stage meter a half point this month because the effect of the rising stocks has a slightly negative effect on early stage companies.  The employees stay longer in the big companies when the stock climbs.  Tougher to find good people for the crucial initial growth stages…

What Do You Think? Talk Back To Brent Holliday

Something Ventured is a bi-weekly column designed to supplement the T-Net British Columbia web site with some timely, relevant and possibly irreverent insight into the industry. I hope to share some of the perspective and trends that I see in my role as a VC. The column is always followed by feedback (if its positive or constructive. I'll keep the flames to myself, thanks).

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