Tag Archives: Palo Alto

About 2303 days ago E-Commerce

The Basics: How Email Works

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It’s nearly impossible to imagine conducting business today without electronic mail. From the early 1970s, when an engineer, sitting at one computer, experimented by sending a message to himself on another computer right beside the first, email has become a crucial tool for communicating in the digital age. The equivalent of electronic letters, written without putting pen (or even printer ink) to paper, billions of messages traverse the globe daily from one computer to another in the same building, or across continents, almost instantaneously. Email use will nearly double in the next four years, as the number of active mailboxes increases from 1.4 billion users this year to 2.5 billion in 2010, according to the Radicati Group, a Palo Alto, Calif. market research firm. Radicati estimates that 183 billion email messages were sent per day by the end of 2006. “There’s no doubt that email in the workplace is the electronic communications tool of choice,” says Nancy Flynn, director of the ePolicy Institute. How email works Early email involved sending monochromatic text from one computer to another, and evolved to allow communication using images, photos, and sound (via attachments). Once relegated to computers running an email application, email is now readily available via Internet browsers, and hence accessible via portable devices including cell phones. The way email works is simple: someone types the address of the recipient, a subject, and a message, hits send, and the message is routed to its recipient.  When the recipient logs in to his or her email account, or the next time the application collects messages, the message will appear in his or her email inbox.  But how does the message get delivered?  An email address is similar to a physical address: it indicates the person and location where the message will be delivered.  In the address user@domain, for example, “user” is the intended recipient of the message, the @ sign separates the individual user’s name from the name of the server or domain, and “domain” is the site where that user’s mail is managed, similar to the street, city, state and zip code in old fashioned “snail mail” (sent using the U.S. Postal Service). Transmission facilitated by protocols  The message is transmitted across wires (or wirelessly) from the recipient’s computer or device, to a business’s server, for example, or a server run by an Internet Service Provider. Software protocols direct the mail to its destination. A protocol called Simple Mail Transfer Protocol (SMTP) forwards or directs mail from the sender to the recipient.  Another protocol called Post Office Protocol version 3 (POP3) in essence pulls the message down from the server to which it was sent and into the application or browser interface on the recipient’s desktop (or PDA or phone). Internet Mail Access Protocol (IMAP) allows a local client to access mail on a remote server. Most applications support all three protocols, which do the background work to route messages to the correct destination. Besides an email address and email account, an email application is required for sending and receiving email.  Writing a message requires an email application, like Microsoft Outlook, running on a PC or PDA, or an Internet browser that allows a user to gain access to email services running on a host — whether it’s a company’s mail server, or a free email service like Gmail or Hotmail. Regardless of the email application, one thing is for certain: email use has enabled small and mid-size businesses to better respond to customers, do business across long distances, and keep communication costs low.

About 2365 days ago Search Engine Optimization

Changing the Way People Search

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Now that Google is a verb, it would seem the story of search has been written, published and put on the shelf. But don’t put that book away just yet. Dozens of start-ups are working hard to re-write it, both with Google’s help and without it. Much of the new technology in search focuses on the flood of multimedia content that Google’s underlying technology doesn’t address. Search engines for video, audio and even three-dimensional still images are coming to market and changing the way users think about search. One search start-up has optimized its engine for mobile users, and opened a new platform for content providers to make their sites more accessible by mobile users, too. Others are trying to improve the search experience for online shoppers. At DEMO 2006 in February, a conference showcasing new technologies and companies, 10 of the 69 start-ups on stage had developed new concepts in search. At DEMOFall seven months later, half a dozen more unveiled search plans. What this means for small business As companies change the way that people can search the Web, small and mid-size businesses need to keep abreast of the new techniques. Searching the Web is one of the key ways that potential customers find companies with which they want to do business in the 21st Century. If new types of search technologies take off, businesses may need to reassess how they describe their products online, how their websites optimize search and/or advertise on search engines and what type of multimedia content they feature on the Web. Start-up Transparensee, based in New York City, is designed to improve search results by understanding the meaning of data fields in structured data (as opposed to Google’s emphasis on random, unstructured data). Using this kind of “fuzzy” logic, Transparensee allows users to weight various parameters; if they say they’re looking for a 10X optical zoom camera with 5 megapixels of resolution, they’ll get to see the 12X cameras with 6 megapixel resolution if those models are in their price range. In multimedia search, Pluggd, of Seattle, Wash., offers HearHere, a search service that lets podcast listeners avoid irrelevant content by taking them straight to the segment of an audio or video feed that relates to their search request. Nexidia, of Altanta, recently introduced a “developer edition” to let content sites add audio indexing similar to HearHere’s search. The company is already well established in audio analysis for enterprise and government needs, such as analyzing call center conversations and finding interesting segments of surveillance recordings. Sonic Foundry Sonic Foundry, of Madison, Wis., also provides audio search through Mediasite.com, its “rich media” database of expert lectures and presentations. “We believe search lies at the heart of efficient, Web-based communication,” says Sonic Foundry CEO Rimas Buinevicius. “Finding a specific document or phrase has become a necessary part of working and learning.” That may also influence the type of content that companies may want to feature on their websites in order to attract traffic and potential customers. Reaching mobile customers Search also has become an important part of the mobile experience. Rather than paying $1 to $1.50 per 411 call, mobile users are trying out free mobile text services. Start-up 4INFO, of Palo Alto, Calif., has taken its mobile text-message search service a step beyond those offered by Google and Yahoo; the company recently debuted an open development platform that lets any content provider create 4INFO-searchable content. Revenues from advertising embedded in the search results are shared between 4INFO and the content provider. Potential customers also are finding easier paths through the search thicket to the products they want. FatLens, of Mountain View, Calif., which recently rolled out an event search site that sells tickets, also has created a site, TheFind.com, which does comparison shopping searches without relying on advertising dollars to influence the order of the results. According to Jupiter Media Metrix, 82 percent of online shoppers use search sites to find what they want, but 85 percent of them are dissatisfied with the experience. If sites like TheFind.com ease their pain, small companies should be able to compete with major retailers to sell their products on an equal footing.

About 2487 days ago Computer Security

How to Protect Your Business from Spyware and Adware

There’s an old IT diagnosis: “Problem between the chair and the keyboard.” It is more applicable today than ever, especially when it comes to spyware and adware. No matter how much you scan and spam filter, no matter how many warnings you send out, someone, somewhere, will click the wrong e-mail link and potentially cause problems on your network. Spyware and adware, and, to a certain degree, phishing e-mails, are constantly plaguing businesses, in some cases causing massive outages and productivity loss. Companies must be vigilant of spyware, the name for programs smuggled in under the guise of legitimate programs and secretly installed on your computer or your network, and adware, software that displays ads on your PC even when you’re not surfing the Internet. Both spyware and adware can impact data and/or system functionality, occasionally resulting in lost data and completely corrupted systems. Spyware and adware can render a computer sluggish, making even the most routine task, such as sending e-mail or calling up a document, slow. An estimated 30 percent of all help desk calls in companies today are the result of spyware, according to an IDC estimate. The number of small and medium-sized companies investing in security technologies to fight spyware and adware is growing. Spyware now ranks with viruses, worms and spam as among the top SMB IT concerns, according to a 2005 study from Forrester Research. Forrester surveyed nearly 800 U.S. SMB technology decision makers and found that 71 percent planned to invest in additional security technologies by the end of 2005. The Radicati Group, a market research firm based in Palo Alto, Calif., forecasts that anti-spyware spending alone will grow from $103 million in 2005 to more than $1 billion by 2009. The Anti-Spyware Coalition, a group made up of anti-spyware software companies, academics and consumer groups, has published a group of tips for businesses on how to block spyware and adware. The tips include the following: * Training is the first defense — Teach your employees not to click on links or files in e-mails… ever. Get them to sign an “acceptable use policy” stipulate that they won’t access unauthorized programs. Some programmers suggest creating a secure FTP site and use that to trade important files back and forth with customers or use a service like xDrive.com to share documents. Focus on keeping e-mail attachment-free. *Lock down desktops — Desktop anti-spyware applications can find and remove spyware trying to execute on PCs. But maintain software updates, operating system and browser patches and manage desktop security from a central location. If you can, install an open operating system like Xandros or migrate to OS X. It’s not something a lot of IT folks want to hear — or have to learn — but if the office assistant and the boss are both on Macs, they’re going to experience less downtime because of spyware and still be able to handle almost any file type. * Block spyware at the network — Your company can configure gateway proxies and firewalls to prevent spyware from reaching PCs on the network by excluding download from known spyware sites and high-risk sites. They can also scan files at the gateway for known spyware code. Also, analyst logs of PC communications for high-frequency destinations. *Create filtering rules, but be generous — filter attachments, yet tag e-mails with bright and bold HTML messages informing the users how to get them out of your custom attachment lockbox. Also, consider unzipping archived attachments and scanning them immediately. Most spyware can be stopped at the source. * Install a program like SpoofStick — A free program for IE or Firefox, SpoofStick informs you if a website is “pretending” to be another, more legitimate website. In many cases, scams will take you to pages that purport to be a legitimate bank or other business, but are, in fact, fake information-farming pages designed to steal personal information. SpoofStick will blink if a page’s URL doesn’t match its title.

About 2487 days ago Spyware and Malware

How to Protect Your Business from Spyware and Adware

There’s an old IT diagnosis: “Problem between the chair and the keyboard.” It is more applicable today than ever, especially when it comes to spyware and adware. No matter how much you scan and spam filter, no matter how many warnings you send out, someone, somewhere, will click the wrong e-mail link and potentially cause problems on your network. Spyware and adware, and, to a certain degree, phishing e-mails, are constantly plaguing businesses, in some cases causing massive outages and productivity loss. Companies must be vigilant of spyware, the name for programs smuggled in under the guise of legitimate programs and secretly installed on your computer or your network, and adware, software that displays ads on your PC even when you’re not surfing the Internet. Both spyware and adware can impact data and/or system functionality, occasionally resulting in lost data and completely corrupted systems. Spyware and adware can render a computer sluggish, making even the most routine task, such as sending e-mail or calling up a document, slow. An estimated 30 percent of all help desk calls in companies today are the result of spyware, according to an IDC estimate. The number of small and medium-sized companies investing in security technologies to fight spyware and adware is growing. Spyware now ranks with viruses, worms and spam as among the top SMB IT concerns, according to a 2005 study from Forrester Research. Forrester surveyed nearly 800 U.S. SMB technology decision makers and found that 71 percent planned to invest in additional security technologies by the end of 2005. The Radicati Group, a market research firm based in Palo Alto, Calif., forecasts that anti-spyware spending alone will grow from $103 million in 2005 to more than $1 billion by 2009. The Anti-Spyware Coalition, a group made up of anti-spyware software companies, academics and consumer groups, has published a group of tips for businesses on how to block spyware and adware. The tips include the following: * Training is the first defense — Teach your employees not to click on links or files in e-mails… ever. Get them to sign an “acceptable use policy” stipulate that they won’t access unauthorized programs. Some programmers suggest creating a secure FTP site and use that to trade important files back and forth with customers or use a service like xDrive.com to share documents. Focus on keeping e-mail attachment-free. *Lock down desktops — Desktop anti-spyware applications can find and remove spyware trying to execute on PCs. But maintain software updates, operating system and browser patches and manage desktop security from a central location. If you can, install an open operating system like Xandros or migrate to OS X. It’s not something a lot of IT folks want to hear — or have to learn — but if the office assistant and the boss are both on Macs, they’re going to experience less downtime because of spyware and still be able to handle almost any file type. * Block spyware at the network — Your company can configure gateway proxies and firewalls to prevent spyware from reaching PCs on the network by excluding download from known spyware sites and high-risk sites. They can also scan files at the gateway for known spyware code. Also, analyst logs of PC communications for high-frequency destinations. *Create filtering rules, but be generous — filter attachments, yet tag e-mails with bright and bold HTML messages informing the users how to get them out of your custom attachment lockbox. Also, consider unzipping archived attachments and scanning them immediately. Most spyware can be stopped at the source. * Install a program like SpoofStick — A free program for IE or Firefox, SpoofStick informs you if a website is “pretending” to be another, more legitimate website. In many cases, scams will take you to pages that purport to be a legitimate bank or other business, but are, in fact, fake information-farming pages designed to steal personal information. SpoofStick will blink if a page’s URL doesn’t match its title.

About 2579 days ago Telecom and Wireless

I’ll Be Watching You

I get 10 megabits of Internet data per second on my cable modem, 400 minutes a month of cell phone time, and more than 200 channels of TV, along with all the Wi-Fi my laptop can pick up. But what I really want is to know where my 17-year-old is on Saturday night. And apparently I’m not alone. A Boston University survey found that nearly a third of adults say they would be likely to use technology that would keep them apprised of the location of loved ones. But why stop there? What about colleagues, employees, customers? Tracking them could be pretty useful, too. It turns out you can track them. And you probably will. The “can” part is pretty straightforward. No matter how you connect to the computing and communications grid–via cell phone in a car, PDA in a mall, laptop in a Starbucks–you’re leaving an electronic trail, and there are services that can pick up that trail and plot your location on a map. These services are now, or soon will be, serving that information up to others at little or no cost. The “will” part is a little harder to grasp. The notion of tracking people’s movements, after all, is more than a little creepy. The idea that businesses might do it to employees or even the general public seems an outright violation of privacy. Indeed, labor and privacy advocates have decried the recent trend of companies electronically monitoring employees to make sure they’re not sneaking into bars, padding travel expenses, or moonlighting on company time. But managers who think the point of electronic tracking is to police their employees are being as shortsighted as teachers who think the point of the Internet is to make it easier to catch students who plagiarize. In fact, once employees and customers understand the sorts of services and capabilities that being tracked makes possible, many will ask to be tracked. The companies that figure this out first will have a leg up–and some may even be able to build new businesses around people-tracking. One pioneer in this area is the consultancy Accenture. The company has 130 employees in research labs in Chicago, Palo Alto, and the south of France, about half of whom have agreed to be tracked throughout the day by a combination of technologies, including Web cameras and badges that emit radio signals. It sounds like the devious scheme of a paranoid manager, but mistrust has nothing to do with it. Instead, the company’s goal is to foster better collaboration between employees who are constantly moving between floors, buildings, and even countries, says Anatole Gershman, the director of the labs. Anyone in any of the Accenture lab buildings can call up a map of the various campuses and see at a glance where anyone else is, and who else is with him or her, so that getting hold of the right people in the right place at the right time no longer is a hit-or-miss affair. Collaboration between employees at the different Accenture labs has more than tripled since the tracking capabilities were installed, according to Gershman, often because merely noting the presence of someone triggers an interest in contacting that person. What’s more, he adds, analyzing records of where employees spend their time helps optimize decisions about hiring, employee assignments, facilities planning, and travel budgets. Why would customers agree to be tracked? Because it might enable them to get products or services they can’t refuse. This kind of monitoring is perfectly legal and can be dictated as part of any employment contract. But it’s not just for the guy at his desk who wants to know where everyone else is; it’s also helpful for the employee who’s doing the walking around in a building or across a corporate campus. “People want to know where things are in relation to them when they’re not at their desks,” says Michael Nova, founder and CEO of Kiyon, a La Jolla, California, company that has developed wireless network technology designed to overcome the spotty coverage of conventional wireless networks inside buildings. Kiyon’s network can track the location of any device, such as a laptop or PDA, that taps in–and Nova expects that to be one of the technology’s key selling points. He notes that employees often waste time hunting for colleagues or for things. Since the location of objects can be tracked by noting in a database where they’re stored or by slapping a radio chip onto them, the network could quickly direct an employee to that archived box of signed contracts. The technology can become even more helpful for an employee visiting one of his or her company’s less familiar facilities, or if the company maintains a sprawling campus. The biggest payoff of all may go to employees on the road. Trucking and delivery companies have been tracking their drivers for years to make sure routes are covered efficiently. Companies can use tracking to fine-tune the placement and travel of their field reps to help them reach the most customers. In the past, that would have required a special GPS device and a service costing $60 per month per person or more. But now people can be tracked through their ordinary cell phones for as little as $15 a month. Nextel already offers tracking services in the U.S.–which is far behind Europe in this regard–and other cell phone carriers are rolling out similar offerings. Meanwhile, location-aware cell phones will soon offer traveling employees a variety of services, ranging from finding a nearby restaurant complete with turn-by-turn directions to telling him or her the location of nearby colleagues and customers. That’s pretty handy for on-the-road managers who don’t have a staff of assistants and travel agents working out these sorts of details for them. The services can even be set up to sound an alert when certain people are within several blocks, encouraging impromptu meetings. And in case of an emergency, there’ll be a lot less confusion over who is where. Why would your customers and potential customers agree to be tracked? Because by knowing where they are, you might be able to offer products or services they can’t refuse. If you’re a real estate broker, you could send an alert to the cell phones of house-hunters who happen to be within a mile of on-the-market homes that meet their criteria. If you’re an insurance agent, you could let clients know their driving patterns qualify them for a discount. If you’re in retail or hospitality, you could send out offers of discounts to the cell phones of passersby. “Today companies are effectively blind, pushing services at people who aren’t in the right context to receive them,” says Accenture’s Gershman. “The game changes when you don’t have to wonder where they are and what they’re doing.” Even simply knowing where your customers are logging on from can help make a tighter connection. “You can marry that with demographic information and get a pretty good guess about age range and income level,” says Ted Morgan, founder and CEO of Skyhook Wireless, based in Boston. Skyhook spent two years sending more than 100 people out to drive in and around major U.S. cities, with equipment that mapped all the wireless networks they encountered. Now the company can identify computer locations based on those wireless signals and is offering free software that turns an ordinary Internet browser into one that knows where it is. As a result, Skyhook can provide companies with the opportunity to place ads that are customized to the user’s location–here’s the neighborhood pizza parlor, here’s the sort of car that people in your neighborhood are buying. That customization even follows laptop users around in their travels. “If it doesn’t cost you anything, why wouldn’t you want more customized information?” asks Morgan. And that’s the bottom line: People-tracking will work only if the people believe it’s in their interest to be tracked. I think the advantages outweigh the risks. But making that case could take some time. Meanwhile, if someone can help me convince my 17-year-old that he’ll appreciate being tracked by me, I’d appreciate it. David H. Freedman (whatsnext@inc.com), a Boston-based writer and Inc. contributing editor, is the author of several books about business and technology.

About 3005 days ago Computer Security

A Second Act for CRM

The 15 sales reps at Intellinet were skeptical — and it was easy to see why. Over the previous four years, executives at the Atlanta consulting firm had introduced four customer relationship management, or CRM, systems. Each time, the execs promised that the new technology would revolutionize the sales cycle by analyzing trends and providing road maps to bigger and better sales results. Yet each initiative failed, costing Intellinet tens of thousands of dollars and the sales reps hours and hours of headaches. Now it was new vice president Scott Ehmen’s turn. He had joined the company in early 2004 with a mandate to find and institute a CRM system that works. Bear with me, he told the sales reps. They did — and they have no regrets for having done so. Almost immediately after the latest system was introduced, new and fascinating data began to appear, data that helped Intellinet make some smart decisions — including scaling back a Florida office and opening a new outpost in New York City. Thanks to the new CRM system, sales are up some 50%, Ehmen says. “When you can measure and track sales,” he says, “you can make smarter business decisions.” Even if it takes five tries. Customer relationship management was one of the boom’s big disappointments. Now it’s back — and worth another look To those who have experience with customer relationship management technology, Intellinet’s story may sound like a fairy tale. CRM was sold as a foolproof way to spin everyday customer interactions into strategic gold by sifting through mountains of data, identifying hidden patterns, and delivering insights that would help executives sharpen their sales plans. Instead, CRM turned out to be one of the biggest disappointments of the dot-com bubble. Many efforts — as many as half, by some estimates — were failures, leaving companies with nothing to show for their investments. But today, with more firms emerging from periods of cost-cutting and beginning to explore new growth prospects, many appear willing to give CRM a second (or third or fourth or fifth) chance. A recent study by the Gartner Group found 60% of midsize businesses intend to adopt or expand their CRM usage over the next two years. Only 2% of the companies surveyed had no plans to tap the technology at all. Why the surge of interest? The CRM industry has improved, offering more targeted solutions, a greater range of price points, and more accountability for its own performance. “Those without at least a loosely woven set of CRM capabilities will be at a competitive disadvantage,” says Gartner analyst Wendy S. Closes. There are dozens of CRM vendors out there, offering products at dozens of prices, and sifting through them can be daunting. If you’re simply looking for software to help manage a database of contacts, you might opt for something like Act!, which sells for less than $500. Salesforce.com offers a system for businesses with as few as five users for just $995 a year. Some of the latest wares from SalesLogix, which promises to speed and improve sales, marketing, and customer service functions, list at just under $2,000 per user. And NetSuite offers a CRM application as part of a comprehensive Web-based management system for $399 a month for a single user and $99 a month for each additional user. From there, the prices — and the capabilities — go up fast. A powerful system that can discern consumer patterns from years of data — such as some of the offerings from Siebel, Oracle, and SAP — can run six figures for an initial rollout. On the other hand, many CRM price tags are determined by the number of users, so a small company will pay less for the same product than a major firm with numerous multinational call centers. Vitale, Caturano & Co., a 250-person accounting firm in Boston, recently launched a major sales initiative designed to win new business from the region’s 200 biggest employers. To pull it off, executives knew that they would need new technology and opted for InterAction, made by Interface Software, based in Oak Brook, Ill. The software allows everyone in the office to share contacts; and it also tracks and analyzes customer histories and preferences. When it came time to pitch the 200 prospects, the list was cross-referenced with the InterAction software and, in a matter of minutes, a helpful web of relationships emerged. That enabled individual sales pitches to be farmed out to staffers who already knew the prospect. The result: Twenty-three of the 200 companies became clients, bringing in an additional $5 million in sales. Sure, the firm could have figured it all out by scheduling a series of face-to-face meetings. But Vitale’s salespeople were stunned by the technology’s speed and sophistication. “Technology let us make sophisticated use of our relationships,” says Jill Hulsen, the firm’s marketing director. Brandrud Furniture, a Seattle manufacturer of hospital furniture, had a similar experience. Sales had been flat for years. Then the company adopted Prophet, a sales-management software package made by Avidian Technologies, based in Bellevue, Wash., that operates within Microsoft Outlook. Brandrud’s goal was to do a better job of following up on sales leads that came into the system when a potential customer requested a price quote. By giving Brandrud’s 50 sales reps a structured system to record and track leads, the company was able to boost its conversion rate from 20% to 40% in a year. Owner Bobby Holt also made another discovery. Because the sales team was now functioning in a more disciplined fashion, his reps were able to get the attention of bigger clients. Of the 88 hospital architecture firms that Holt considered A-list, Brand-rud was able to get business from 15% of them, up from zero in 2003. “When you have a professional approach, you look like you have your act together. Bigger firms are willing to do business with you,” he says. “That’s a sales benefit we didn’t plan for.” CRM is not without its pitfalls. For one thing, a three-year wait for return on investment is still common. Of course, even the new CRM applications are not without pitfalls, especially for smaller firms. For one thing, a three-year wait for return on investment is still common. And for midsize firms, that investment averages some $4,000 per user over three years, according to Gartner. What’s more, many companies fail the human test, targeting the wrong problems or providing inadequate training. That results in the classic failure scenario: a nifty new tech system that nobody uses. “Positive impact only comes when you have executive commitment, willingness to change behaviors, and people with the skills to actually use the technologies the right way,” says David Taber, president of Taber Consulting, a marketing consulting firm in Palo Alto, Calif. Consider Intellinet’s Scott Ehmen. His first step in the CRM process didn’t involve technology at all. The first thing he did was involve his sales reps in a study that defined the sales process, breaking it down into steps and segments. Then, when he set about introducing changes, including the new CRM system — Microsoft CRM — he could relate it back to elements, goals, and weaknesses outlined in the company’s game plan. “You can’t start with the automation,” he says. “You have to start with understanding the process and then moving forward to change behavior.”

About 3248 days ago Computer Security

The Next Best Thing to Being There

Douglas Mcbride’s life had become a blizzard of faxes and e-mails, and the owner of Alaska Indoor Sports Distributing Ltd., a distributor of gaming equipment such as Bingo cards and lottery-style games based in Ketchikan, Alaska, felt as if he was being buried. His suppliers faxed samples of 20 to 30 new products a week. His salespeople, meanwhile, were sending in at least as many daily schedule updates and sales reports, all of which needed reconciling with the company’s records. Some days, more than 100 important documents crossed the machine. Such an onslaught would be a pain for any business owner. Complicating matters for McBride was the fact that his 18 employees are scattered across five locations in the vast state of Alaska. His two warehouses are located some 750 miles apart, in Ketchikan and Anchorage, and each one required a full-time staffer just to send and track faxes. Face-to-face meetings were nearly impossible, and even getting a colleague on the phone was a hassle. McBride’s business was growing, but the communications woes were taking a toll. Faxes and e-mails were getting lost, and new orders were no longer being processed efficiently. There had to be a technological fix for the problem, he figured. But the products he found — including Microsoft Exchange, the software giant’s heavy-duty corporate server, and wide-area virtual networks — were either too pricey or too difficult for his nontechnical staffers to use. He was on the verge of giving up hope when he stumbled onto Groove, one of a new breed of relatively cheap, easy-to-install collaboration tools. He downloaded a free trial version one Saturday. Within a couple of hours, he had what Groove calls a virtual “workspace,” in which he could post documents, spreadsheets, and images, solicit employees’ comments, and make notes and changes. The software tracked the various changes automatically. Suddenly, a mundane task like the daily sales report, which had long meant gathering faxes from four field sales staffers and three phone salespeople and pulling together the seven reports into one, could be done with a simple spreadsheet housed in Groove — which sent McBride an instant message notification every time the numbers were updated. McBride was sold. He spent $600 for a 10-user license. “Now, we communicate like we’re in the same office building,” he says. Groove is one of a powerful new generation of software tools designed to help businesses collaborate. Computers, of course, have long helped people work together. But previous versions of collaboration software have tended to assume that all users were in a single location and generally required all the information to be stored on a central server. These latest products distribute data across the Web, allowing colleagues thousands of miles apart to work together on projects as if they were in the same room. Such tools have the intuitiveness of e-mail but add new features, like instant messaging and voice over Internet capabilities, as well as better ways to organize messages, documents, and calendars, says Kevin Werbach, founder of tech trends watcher Supernova Group. Alternatives to Groove include Microsoft’s SharePoint Services, a Web-based document and communications manager that is easy to use and works with PCs that run Apple or Linux software. IBM offers Lotus Team Workplace (formerly QuickPlace), which is similar to SharePoint but works with Lotus products like Notes and the Sametime instant-messaging tool. Finally, there are open-source software tools known as wikis, which combine e-mail-like message posting with the ability to track documents. Most of this Linux-based software can be downloaded for free, although some vendors offer their own systems. Such software has made all the difference for Alaska Indoor Sports. When suppliers send new product updates, for example, they’re automatically popped into a workspace in Groove, and notices go out to the salespeople. The same goes for inventory updates. The daily sales update no longer vexes. McBride even wants to set up workspaces in Groove for his suppliers, so they’ll post information there rather than sending e-mail or faxes. Groove has allowed McBride to lay off one of his fax checkers; the other now spends her time in sales support. Communications costs are down by more than 70% (faxes between Anchorage and Ketchikan run 14 cents a minute) — and the newfound productivity helped push sales up some 25%, McBride says. AlgoRx Pharmaceuticals, a Cranbury, N.J., developer of pain management medicine, started using the software in early 2002 to help manage clinical studies and trials, some of which take place in Eastern Europe. Groove lets the company put together internal people and outside consultants to shape the proper protocol for the study and cuts in half the need for face-to-face meetings. In the past, images from patient studies were faxed to every member of a team, perhaps 12 people in all. Each of them, in turn, would comment via e-mail, which engendered several more rounds of electronic messaging. “Before you know it, you’ve got a dozen e-mails and your head is spinning,” says Jeffrey D. Lazar, AlgoRx’s senior vice president of clinical research and regulatory affairs. Now the documents are uploaded into Groove, an e-mail alert is sent out asking for comment, and all the comments appear alongside the appropriate image in Groove. Colleagues can even gather in the virtual workspace to discuss the matter in real time. Lazar estimates Groove has saved hundreds of thousands of dollars in travel and telecom costs. In Lenox, Iowa, Barker Implement and Motor Co., a five-site John Deere dealer, uses Microsoft’s SharePoint as a sort of electronic water cooler, where salespeople post their latest quotes on equipment. That’s helped cut down on what had been a persistent problem: customers using a quote from one Barker dealership to undercut another. “We have five locations, so it’s important that we get the message out to each employee at the same time,” says owner Todd Barker. “These guys need to know that customer A has been to store A and already gotten a price, so we don’t get into an internal price war.” For all its advantages, collaborative software is not perfect. The programs don’t have very good search capabilities or ways to track content. That might not matter in the first year or so of using it. But digging up three-year-old marketing projections could be a hassle. Vendors say they’re working on adding these features. Wikis, meanwhile, are an emerging type of software particularly popular among tech firms. Andy Stack, senior director of finance and operations at Stata Laboratories in San Mateo, Calif., which makes the Bloomba e-mail program, likens the software to “a big virtual whiteboard” that allows the company to coordinate development and operations among employees and contractors in California, India, and elsewhere. Being open source, wikis are free but can require some technical expertise to set up and administer. So Stata uses Workspace, wiki software made by Socialtext, based in Palo Alto, Calif. For about $5,000 for one year, the company gets a virtual workspace for each project, organizational tools, and sophisticated e-mail capabilities, but it does not have to maintain the software itself. Because all departments use the application, customer service reps can see relevant goings on in marketing that might cause a spike in calls and plan accordingly, Stack says. The payoff: “We’re a fast-moving company and collaborating through a wiki helps reduce our start-up time with contractors and consultants. We think it gives us an edge over slower competition.” Sidebar: Getting Closer Software options for small companies Groove $345 for five users; $69-149 per additional user Built-in voice over Internet protocol; enhanced security features; Web-conferencing Microsoft SharePoint Free, with $599 Small Business Server or $999 Windows Server Manages websites, documents, lists, calendars; integrates with Microsoft Office applications Socialtext Workspace $995 for five users; $30 for each additional user Linux-based but more user-friendly than most Linux applications; includes range of administrative tools, including security

About 4160 days ago Telecom and Wireless

A Shock to the System

Anomalous as GMER’s systems may seem in an industry not famed for cutting-edge technology, they represent the look of things to come, according to Steve Drenker, manager of information systems and telecommunications for Electric Power Research Institute, in Palo Alto, Calif. “All the systems developed for the utility industry over the last 30 years are very suitable for a regulated industry, where you have one product with one price year-round,” says Drenker. “Utilities created these huge, monolithic back-office solutions. Now requirements have changed, and they have to deploy technology in a more modular fashion. In the old way, it could take years of effort and millions of dollars to change a system. In today’s world, systems evolve daily.” This technology-enforced need for speed has had an effect on Hyde, who has modified his managerial and communication style to exemplify the new business culture. The printed memorandums of his GMP days are practically extinct; instead, he zips off E-mails that, in GMER’s flat organizational structure, receive the same attention as everyone else’s. The geographical dispersion of GMER’s vendors and contractors has forced this once-complacent PC user to become proficient with the Internet. Even his face-to-face communications have grown more frequent and less formal. At GMP, Hartley says, “I’d get a phone call from one of Doug’s assistants: ‘Mr. Hartley, Mr. Hyde would like to make an appointment to see you.’ Now Doug just pops into my office whenever he feels like it.” Still, Hyde had intended to put his stamp on GMER’s culture, but, he says, he got too busy and forgot about it. In the meantime, the 40 GMER employees, 28 of whom were liberated from the suit-and-tie culture of GMP, started showing up in casual wear. When someone threatened Hyde’s tie with a pair of scissors, he traded the suits for vests and khakis. Hyde’s gut instinct in managing GMER was to try to replicate the “sometimes illusory” control he felt as the head of a traditional utility, where the business was electricity–period–and where he spent half as much time in front of a computer. Yet he feels an almost intoxicating exhilaration in the loss of command. “In exchange, you get lots of creative interactivity. I really like that,” he says. Days before the new year, Hyde and his staff have just returned from a two-day planning retreat. He walks out of his office and into a group hug–organized to cheer up an employee who had been left behind to fix a last-minute problem with GMER’s extranet. “I would,” Hyde says, “and did, trade a lot to be part of that kind of spirit.” Emily Esterson is an associate editor at Inc. Technology. Power Tools: GMER’s Secret Weapons GMER’s operations are powered by two critical technologies: an extranet and a data warehouse. Extranets, which are increasingly used for intercompany collaboration, marry the benefits of Internet technology with the security of a private network. Participants keep their data safely behind a firewall, but authorized partners can access it over the Internet. Essentially, it’s like living in a gated community where all the residents have keys to one another’s houses. GMER trades information with nearly two-dozen vendors over a combination of secured Internet connections and leased lines. The company can retrieve data, such as a customer’s electricity-usage history or billing information, from servers located behind its contractors’ firewalls, generally by using a password. (In some cases, the company uses direct connections via frame relay instead.) Data warehouses are electronic-storage facilities where vast amounts of information are captured, housed, and sorted for later analysis. At GMER, detailed information on customers–including the magazines they subscribe to and the appliances they own–is automatically captured through the company’s Web site and call centers and is transferred over the Internet to a mainframe-based database maintained by an outside contractor. That database is also the repository for customer data culled from purchased lists and assorted market research. GMER employees access the data warehouse over an extranet. Using sets of detailed questions, they can then drill down into the data to create lists of customers matching specific criteria or submit the information to proprietary software that allows them to examine the results from different viewpoints. GMER applies the information it extracts to hone its customer profiles for marketing efforts, but the company will soon use the data to customize its products. –Emily Esterson

About 4405 days ago E-Commerce

The Real Economy

Small Business 2001 High technology can seem like the land of the quick or the dead: either a company grows rapidly to dominate its industry or else it dies aborning. The rocketing tech businesses that turn up on stock pickers’ lists of hot companies fit that image to a T. To fans the businesses are tomorrow’s Microsofts and Dells. To skeptics they’re candidates for dot-com-style flameout. Whichever the outcome, everyone agrees: they won’t stay small for long. But that picture is incomplete. For every Microsoft there are a thousand small, specialized software companies churning out programs for niche markets. And for every eToys — the #2 site on the Web during the holidays last year and now in bankruptcy — there are any number of small shops actually making money on the Internet. “Tens of thousands of small businesses you’ve never heard of are quietly making a go of it online,” reports Business Week’s Robert D. Hof. Example: ElectricShaver.com, a sales, service, and repair outfit that does 90% of its $1 million in revenues on the Web. And when you step out beyond the usual confines of big computer companies and the Internet, you see still more of what small companies do in high tech. They pioneer technologies that big companies haven’t yet begun to explore. They make the parts and provide the services that make places like Silicon Valley hum. Two reports from the field: MEMS the word Ever hear of MEMS? The acronym stands for microelectromechanical systems. Rick Snyder, CEO and cofounder of Ardesta LLC, in Ann Arbor, Mich., a venture-capital firm that describes itself as an “accelerator” for the industry, calls MEMS “small tech.” Hundreds of small private companies, many affiliated with research labs, are working to make this new technology as pervasive as semiconductors. MEMS are components — superminiaturized machines that can be used as pressure sensors, for example, or as part of an optical switch. The tiny machines are having an impact on industries ranging from telecommunications and biotechnology to ordinary manufacturing. “There are at least 1,000 different MEMS products and prototypes, and up to 20 variations on each of those,” says Steve Walsh, director of technology entrepreneurship at the University of New Mexico and cochairman of an international MEMS conference. “There are at least 15 of them in a new car, and more than 100 in the next-generation John Deere tractor.” Walsh can rattle off a list of small companies around the world that are working on commercial MEMS applications, including many of the 70 or so businesses that are using the technology to develop an all-optical switch for the telecommunications industry. Why hasn’t a larger company taken the lead in this expensive research? “People who are winning in an existing industry don’t want to reinvent themselves, because they don’t want to lose their existing position,” says Walsh. Snyder agrees: “Large companies have traditional ways of doing things that work. The industrial and consumer markets will be gigantic, but it’s going to take longer for larger-scale companies to say, ‘We need it.’ “ Out of the spotlight While it seems that every day a new small company from Silicon Valley makes its debut in the public eye, plenty of neighboring businesses toil in the background — never the hot IPO, never the subject of a “companies to watch” article, but critical nevertheless to the valley’s health. Among them are the hundreds of contract electronics manufacturers (CEMs) that build the parts inside PCs, networks, and printers. “You don’t hear about them because they don’t put their name on any labels,” says Doug Henton, cofounder and president of Collaborative Economics, in Palo Alto, Calif., an economic consulting company focused on community development. In a study a few years ago, Henton found, more than 500 companies of all sizes were doing contract electronics manufacturing in the region. “It’s one of the largest sectors we have here,” Henton says. A few of those manufacturers — Solectron Corp., for instance — are giants. But there are far more small companies in the contract industry than large ones. Pamela Gordon, president and founder of Technology Forecasters Inc., a high-tech market-research company in Alameda, Calif., says that only about 70 of the roughly 3,000 CEMs in the world have sales greater than $100 million. One that just crossed that line is Flash Electronics Inc., in Fremont, Calif. Last year it was 19th on the Inc. 500 list, with an eye-popping five-year growth rate of 5,050%. In 2000 Flash stayed on the fast track, as its revenues jumped from $37 million in 1999 to $125 million. The 2001 State of Small Business issue Please e-mail your comments to editors@inc.com.

About 4556 days ago E-Commerce

Upstarts: Digital Photography

Photo Opportunities Digital-photo start-ups get ready for their close-up By the time Mark Platshon landed a meeting with celebrated Kleiner Perkins venture capitalist John Doerr in mid-1999, Platshon and his online digital-photo business, Zing Network Inc., had already been snubbed by a dozen other VCs. So Platshon couldn’t help bracing for rejection when — midway through his pitch — Doerr walked out and began rummaging around in an adjoining office. But as suddenly as he had exited Doerr rushed back in, hastily pulling a brand-new digital camera out of its box. Finding nothing in the accompanying literature about uploading, accessing, and distributing digital images on the Internet — a major component of Zing’s business — Doerr concluded that Platshon had hit on a missed market opportunity. Kleiner Perkins took the lead in a $14-million round of financing for Zing that closed in August 1999. “Doerr just got it,” remembers Platshon. “He understood the significance of the consumer shift to digital photography and that it would remake the entire industry in just a few years.” Indeed, Boston-based InfoTrends Research Group Inc. projects that online photofinishing will be a $4.4-billion worldwide market by 2005. The start-ups jostling for position in this emerging field have staked their claims in slightly different territories. Some have opted to become digital photo processors, creating hard-copy prints of film and digital media, and uploading digital images to the Web. (See “Someday Your Prints Will Come,” below.) Others, including San Francisco-based Zing, outsource their customers’ printing needs and focus on Web-based storage and sharing of digital images. A collage of services Among storage-and-sharing sites, Zing’s stands out for garnering some 3.5 million users each month. That’s quite a following, considering that three years ago the company was headed in a completely different direction. When Platshon stepped in as CEO, in December 1997 — after a yearlong stint with Zing investor Alloy Ventures Inc., in Palo Alto — the company was developing imaging technology for use in Web-based advertising. But by late 1998, Platshon saw a bigger market for online photography management as part of an Internet business for uploading, storing, and sharing digital images. “And so,” he says, “we changed the business.” Since making that shift, Platshon has made acquisitions a major part of Zing’s growth strategy. He began by purchasing image-uploading technology developed by FotoNation Inc. that provides a camera-to-Web connection, enabling digital photographers to plug their cameras into computers and connect through the Internet directly with Zing. Platshon has also sealed deals with manufacturers that have agreed to install FotoNation’s uploading technology in their cameras, making Zing the default Internet destination for users of digital cameras sold by Sony, Casio, and Nikon. Those deals are driving customers to Zing’s site, where product E-tailing accounts for some two-thirds of revenues, Platshon says. In E-tailing, too, he has bought his way into the business. Last January, Zing acquired Pix.com, which scans digital images onto everything from calendars and cookies to mouse pads and T-shirts. Platshon added another source of E-commerce revenues in August, when he snapped up Eframes.com, a high-margin, high-end framing business that handles its own digital printing. That deal may enable Zing to collect revenues from competitors that outsource printing and framing services to Eframes, which has retained its name within the Zing network. “Eframes can provide its services to anyone, even businesses that might be Zing competitors,” Platshon says. Enjoying its Kodak moment In contrast with Zing, which has focused exclusively on digital converts, San Francisco-based PhotoPoint Corp. has positioned itself as a go-between for film users who are just now beginning to go digital. Launched in August 1998, PhotoPoint seized an early-mover advantage in the online photo-sharing space through a partnership with PictureVision Inc., a subsidiary of Eastman Kodak Co. In that deal, PhotoPoint CEO Ed Bernstein agreed to pay Kodak a flat fee in exchange for access to the film- and digital-camera users who bring their pictures to 40,000 Kodak PhotoNet processing locations throughout the country. Bernstein proposed the deal as a way for Kodak’s digital-development division to provide its customers with long-term Internet-based storage, sharing, and image-enhancement tools. Because PhotoPoint provides free long-term storage for Kodak’s brick-and-mortar retail customers, the Kodak retailers stand to get more reprint orders over a longer time period, Bernstein says. And PhotoPoint enjoys direct access to established Kodak customers. As Bernstein sees it, PhotoPoint’s tie-in with an old-economy film-industry giant is the surest way to build market share in the burgeoning digital field. Close to 90% of camera users have yet to take the digital leap, after all. And although digital-camera sales are predicted to soar, a survey by Jupiter Communications Inc. found that 37% of consumers would rather store digital images at home than post them on the Web. Bernstein is betting that PhotoPoint can leverage Kodak’s trusted brand name to reduce such consumer wariness. When Kodak customers pick up their prints, they receive directions on how to transfer digital versions of their pictures from a Kodak site — where the images are stored at no charge for 30 days — to the PhotoPoint site, where they can get free long-term storage, as well as find tools to create and share online albums, and buy PhotoPoint merchandise. “We’re all about making it brain-dead simple to get your digital images to the Web,” says Bernstein, noting that PhotoPoint now hosts more than 13 million photos. For PhotoPoint, Zing, and their competitors, consumer education remains the biggest and most daunting hurdle. As Bernstein puts it: “Our mission is to transform customers into digital users without fundamentally changing the way they think about and use pictures.” D.M. Osborne is a senior writer at Inc. Someday Your Prints Will Come Serial entrepreneur Kamran Mohsenin eased into the summer of 1999 with time on his hands. Having recently sold his second start-up, Mohsenin was scanning the landscape for a new business venture and playing with one of the toys he bought with the spoils of his company’s sale — a new digital camera. “The camera was taking great pictures,” Mohsenin recalls. “The problem was, I wasn’t able to get quality prints.” In a flash, Mohsenin hit on the idea for his third and most recent start-up, Ofoto Inc. Soon, Mohsenin was caught up in a heated race among online digital photofinishers, including Shutterfly.com. “It’s a huge market, and the competition is fierce,” observes David Hornick, who is on Ofoto’s advisory board. Founded in July 1999, Ofoto, based in Berkeley, Calif., has adopted a clicks-and-bricks business model. Like Shutterfly, Ofoto has invested millions in terra firma photo-development labs. At the same time, online photofinishers have seized upon technological advances to carve out an Internet-based niche in the photo-processing market, which has traditionally been dominated by industry giants like Eastman Kodak Co. To the extent that these nimble start-ups can secure a foothold — and create new, Web-based efficiencies — before bigger competitors lumber into the market, their payout could be huge. Margins in the traditional photo-development business typically run as high as 50%. Thus the game right now is all about grabbing market share. Toward that end, Ofoto and Shutterfly are competing to become the photo processor of choice for a bundle of other start-ups that outsource printing for their online photo storage and sharing. At the same time Ofoto and Shutterfly are reaching out to picture takers of all stripes by offering steep discounts on old-fashioned film processing (returning prints by snail mail), as well as digitizing the images for online viewing and distribution. It’s an updated twist on a low-cost, mail-order film-processing service popularized a few years ago by Seattle Film Works, recently renamed PhotoWorks Inc., in its own bid to straddle the digital divide. For its part, Ofoto has concentrated on high-level business-to-business partnerships. It’s teamed up with InfoSpace Inc., for example, to become the preferred print shop for that company’s affiliate network of 2,500 Web-based businesses, which provide communications and commerce infrastructure services for wireless devices. Ofoto has also sealed a deal to print the digital images sold through the Internet division of Corbis Corp., which boasts an online archive of 2.1 million images — from fine art to quirky photography. Meanwhile, Shutterfly, based in Redwood City, Calif., has gone directly after consumers. Since cofounding Shutterfly, in December 1999, CEO Jayne Spiegelman has cut cross-promotional deals with such portals as Yahoo and Homestead.com. Spiegelman, who hails from senior-level retailing posts at the Good Guys and Macy’s West, has also persuaded electronics retail outlets to display Shutterfly’s sample prints at camera counters. “We wanted to connect with customers at the point of purchase,” she says. Market Snapshots A sampling of other digital-photography players Snapfish.com, San Francisco Business concept: Offers basic printing and digitizing of film images free of charge. Depends primarily on advertising revenues but also sells photo equipment and merchandise and charges for reprints. Competitive advantage: A superlow price point and a catchy marketing campaign engineered by a branding expert with experience at Kraft and Nabisco. Major challenge: Proving its advertising-revenue model, which has fallen out of favor among investors. Also, to access image files stored on the site, customers must provide demographic information used for advertising purposes. eMemories Inc., Los Angeles Business concept: Enables amateur photographers to create online photo albums. Makes money selling hard-copy prints and albums. Competitive advantage: Being the exclusive photo-sharing community for the Women.com network and the teen site Alloy.com, and securing a slot on the Earthlink personal start page. Major challenge: Beefing up its E-commerce offerings. At press time, eMemories’ merchandise was limited to mouse pads, mugs, hats, and T-shirts. DotPhoto Inc., West Trenton, N.J. Business concept: Allows digital-camera users to upload images, create their own voice-over “captions,” and share pictures through E-mail links. An ad-free site, DotPhoto offers a sliding-scale subscription-fee plan that may appeal to people who don’t want to be bombarded with marketing come-ons. Competitive advantage: Its proprietary “talking pictures” technology. DotPhoto is the first site of its kind to accept both image and sound files from digital devices. Major challenge: Gaining traction and getting noticed. A relative latecomer to the market, DotPhoto is funded by founder Glenn Paul and carries less clout with prospective partners than its venture-backed competitors do. Q&A The Big Picture Can these digital-photo start-ups successfully take on the Kodaks and Fujis of the world? The outlook might best be described as blurry. To help us bring this expanding and highly competitive space into focus, Inc. spoke to Lia Schubert, an analyst at Boston-based InfoTrends Research Group who follows developments in the online digital-image arena very closely. Q: Some entrepreneurs describe what’s happening in the online digital-image domain as a renaissance in the photography business. What’s your reaction? A: Yes, we’re seeing all the signs of a renaissance. Digital photography combined with the Internet is creating a paradigm shift in the way personal pictures are captured, shared, stored, and printed. New players are coming out of the woodwork with innovative business models. We’re seeing renewed interest in photography as a result. Q: Traditional photo processors are expected to offer digital photofinishing services in their retail centers. How can these start-ups compete with them? A: The key advantage that online photofinishers have is that they’ve already developed their services before retail solutions have been actively promoted. Online photofinishers are reaching out to digital-camera users through strategic partnerships and free-print promotions, teaching those users that it is possible to order photo-quality prints online. If the online start-ups can gain significant mind share before retail services become more competitive, then they may be able to lock in a certain portion of the market. Q: How big a slice of that market do you expect the start-ups to capture? A: It would be too speculative to predict a precise number right now. Start-ups will succeed according to their ability to secure the capital necessary to scale up their operations and to draw in and retain members. But it’s safe to say that traditional photofinishers, like Fuji and Kodak, will garner a significant portion of market share. Please e-mail your comments to editors@inc.com.