The holiday season tends to focus attention on consumer gadgetry, but at year’s end three Chicagoland technology firms find themselves with heightened profiles for important computer products for the corporate marketplace.
Each of the companies–Mercantec Inc., InstallShield Software Corp. and Dauphin Technology Inc.–seems to be in the right place at the right time to take advantage of industry trends.
Last month’s bombshell announcement of America Online Inc.’s acquisition of Netscape Communications Corp. is expected to quicken the pace of electronic commerce–buying and selling on the Internet–and increase the importance of software companies like Mercantec, which make the plumbing that allows companies to build Web sales sites and keep track of orders, payments and shipping.
As the world’s biggest on-line service, AOL already has a strong consumer brand but coveted Netscape for, among other things, its e-commerce software. The plan is to equip companies with the software and consulting services they need to set up business-to-business and business-to-consumer transactions.
Naperville-based Mercantec, a 3-year-old start-up, has waded into that market with its SoftCart commerce-enabling software. The company already has a partnership with Microsoft Corp., which is intent on expanding beyond consumer applications tied to the Windows desktop operating system and competing with a bulked-up AOL in business computing and electronic sales.
Under an agreement with the Redmond, Wash.-based colossus, Mercantec offers a version of SoftCart optimized to work with Microsoft’s FrontPage 98 Web site-building software.
“There are tens of thousands of FrontPage users out there,” said Mary Pandolfo, Mercantec’s marketing director. “If we were going to pick one (partner), that would be a good one.”
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Pandolfo said that Mercantec markets SoftCart primarily through a network of more than 85 Internet service providers, which are ideally positioned to step in with Web commerce software when a business decides to move up from a bare-bones informational on-line presence to sales. “They start with a Web site, then they go look for that added service,” Pandolfo said.
Pandolfo wouldn’t disclose revenues for the privately held company, but said they increased sevenfold between June 30, 1997, and June 30 of this year.
SoftCart is set up so that the commerce site can reside on an ISP’s big server computer, allowing the merchant to manage it remotely. This lets smaller businesses run their own e-commerce sites without a major investment in equipment.
Mercantec also works through systems integrators and Web designers, allowing them to bundle SoftCart as part of an e-commerce package. Costs for various versions of SoftCart range from nothing for a bare-bones version thrown in as part of a Web-hosting arrangement to $165 a month for a suite.
It’s a crowded field, with competitors ranging from Pandesic LLC, a joint venture of Intel Corp. and German corporate software giant SAP AG–which takes a cut of a merchant’s revenue in addition to a minimum $25,000 fee–to Microsoft, which is designing its own e-commerce software. Smaller rivals include startups like BIT Software Inc. of Westmont, which sells a $995 kit, without a monthly fee, to allow a business to display an inventory and process credit card transactions for 25 items on the Web.
Pandolfo said Mercantec tries to separate itself by avoiding locking a user into a single technology. “We’ve left it open . . . you can use any Web design tool,” Pandolfo said. “The technology grows with your business, instead of the technology forcing you to make business decisions.”
Mercantec has begun looking overseas for new customers. Late last month, the company received U.S. Commerce Department approval to export SoftCart, which includes encryption technology normally restricted by the federal government as a possible aid to terrorism.
SoftCart’s approval is one of the first fruits of an aggressive lobbying effort by the software industry, which has argued that permitting the export of strong encryption is vital to maintaining U.S. competitiveness in global markets.
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Another local software player, InstallShield Software Corp., has ridden a partnership with Microsoft to become one of the most common, if relatively little known, software suppliers in the world.
A survey earlier this year by Media Metrix found Schaumburg-based InstallShield was the fifth-most-common home computer application, trailing only Office, Word and two other Microsoft products, Notepad and Entertainment Pack.
That’s because software developers use InstallShield tools to facilitate installation of their programs on Windows-based computers.
“Pretty much anything you install or uninstall on a PC is using one of our products,” said Michael Byrne, product manager for InstallShield Professional edition.
In essence, InstallShield helps developers accomplish two tasks.
It helps them to create the pop-up dialog boxes–also known as end-user interfaces–that guide a user through the installation process by determining in which directories certain files will reside.
It also makes sure that the myriad files in any given application go to the proper places on a computer’s hard drive.
InstallShield’s popularity with developers is reflected in its inclusion, in 90th place, in Inc. magazine’s list of the 500 fastest-growing privately held companies in 1998. Revenue for the 11-year-old company has grown from $896,000 to more than $22 million over the last five years, according to company spokeswoman Michelle Kohler.
“They’re the dominant leader in that space, with up to 80 percent of the market,” said Digs Majunder, chief technology editor of Windows magazine.
InstallShield turned heads in the software design community with its ability to interact with the registry of Windows 95 when it debuted in August 1995. An operating system is the brains of a PC and the registry is, in essence, the brains of the operating system.
“InstallShield was the only one that could handle the very difficult registry on Windows 95,” Majunder said.
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Dauphin Technology Inc., the third local company making waves, has followed a more erratic growth curve. The Palatine-based maker of portable workplace computers veered into bankruptcy in 1995.
But the company emerged from the clutches of court supervision the following year and in October plopped out its Dauphin Orasis workplace portable unit.
Until recently, the knock against portable on-the-job computers was that designers had to give up too much processing power in order to shrink them enough for comfortable transport.
As a result, carry-around computers tended to be single-purpose data-collection devices.
Not anymore. The specs of the Orasis lineup include 233 and 266 megaherz MMX Pentium processors, with 32 megabytes of RAM and up to a 4.3 gigabyte hard drive–the profile of a respectable desktop machine–in a 10.7-by-6.9-by-2.6-inch package. A unit tested by the Tribune weighed 5.5 pounds.
Orasis–pronounced or-uh-sis–means “a vision” in Greek, a nod to Chief Executive Andrew Kandalepas’ ancestry.
From a performance standpoint, a better translation would be the plural, “visions,” because Orasis is an ultraflexible field computer, capable of pen, voice or keyboard activation. The device also has an infrared port, so the keyboard can input data while detached from the tablet. It can be carried in hand or worn from a belt, and data can be transmitted via landline or wirelessly. The addition of a modem card gives Orasis cell phone and fax capability.
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For now, the company is targeting “anybody who uses a laptop computer and wants a powerhouse device,” said John Watson, national sales manager.
That translates into utility workers; doctors and home-health caregivers and insurance adjusters. Watson said the last group, especially, are an attractive market because they currently have to schlep a laptop, a video camera, a printer and a global positioning system to the scene of a disaster.
Miniature, modular attachments provide Orasis with video camera and GPS capability in a single piece of equipment, Watson said.
Orasis retails for $3,200 to $3,900 depending on power of microprocessor and other features. With volume orders, the price drops to about $2,900, he said.
“For those types of products, pricing isn’t as big an issue as the distinctive features of the product and the perceived reliability of the company,” said Tom Davey, senior editor of Information Week magazine.
One of Dauphin’s challenges will be to satisfy would-be corporate purchasers that its rocky financial history will not repeat itself, Davey said.
Orasis competes in a crowded field that includes a couple of electronics giants, Fujitsu and Mitsubishi, plus Symbol Technologies, the market-share leader in workplace computing, according to Gerry Purdy, editor of the Mobile Letter, a newsletter that tracks portable computing.
The emergence of robust, relatively affordable workplace handhelds or wearables signals the beginning of their migration from a specialty item to mass market.
At last month’s Comdex computer show in Las Vegas, for example, Xybernaut Inc. of Fairfax, Va., debuted what it bills as the first mass-market wearable computer, mounted either on the head or on a belt, for $5,000. ViA Inc., based in Northfield, Minn., already has a wearable in service, and International Business Machines Corp. is expected to bring one to market next year.
“The market seems to be growing at 20 to 30 percent a year,” Purdy said. “The reason is that you now have the power of a desktop computer in a handheld.”
Watson said Dauphin is counting on Orasis’ modular adaptability and easy upgradability to separate itself from the competition. “The unit doesn’t go out of style easily,” he said.