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The Download, Shannon Henry

Local Tech Looks Homeward For '05 Success

By Shannon Henry
Thursday, December 30, 2004; Page E01

The area's technology executives have again embraced the idea that Washington is a government town. Over the years when government work was not considered fashionable, some tried to develop a separate identity for the region built on ventures in software, telecom, the Internet -- the whole gamut.

Asked what they're predicting for 2005, however, local tech executives cite the continued dominance of government contracting in defense and homeland security.

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And they hope that like many technologies, including the Internet, that were originally created for the government, the innovations that result may be used in the private sector. "Now the question is: In 2005, will those technologies developed for homeland security find commercial use as well?" says Bobbie Kilberg, president of the Northern Virginia Technology Council.

"All trends lead home," as in homeland security, says Ardell Fleeson, membership director of the Tower Club, the high-tech gathering spot in Tysons Corner. In the 13 years she has worked there, she has lived through the real estate crash, the fear over defense-spending cuts, the dot-com boom and bust followed by the corporate scandals, and now the homeland security era, which Fleeson predicts will last a good 10 years. "Americans always turn adversity into prosperity -- the prosperous '50s after World War II is just one example -- and this is what is happening now."

Based on interviews with leaders in technology and reader responses to this year's columns, here's a brief sampling of trends, companies and people to watch in 2005:

Trends

VoIP. Okay, it won't all be about government contracting. Many say 2005 will be the year for Voice over Internet Protocol telephone service to work, both technologically and as a business. Local player SunRocket will be up against larger firms Vonage in Edison, N.J., and Skype in Luxembourg as well as major telecom and cable companies.

RFID. Radio frequency identification is a technology to keep your eye on, as it keeps its eye on you. The high-tech tags are used to track shipments, prevent shoplifting and keep inventory. Retail giant Wal-Mart and the Department of Defense have been pushing their suppliers to use RFID, so the technology presents area companies with both commercial and governmental opportunities. Patrick J. Sweeney II, former chief executive of ServerVault, is running Odin Technologies, a Reston RFID infrastructure firm, and is the author of the upcoming "RFID for Dummies" book.

New-fashioned media. As newspaper readership declines while expectations for real-time news grow, several tech insiders said Washington is poised to be a center for digital media. "With AOL, Discovery, The Washington Post, Gannett here, something is going to evolve and make this region a massive player" in new media, says Mark Frantz, a venture capitalist with The Carlyle Group in Washington. XM Satellite Radio in Washington and iBiquity of Columbia are players to watch in high-tech radio.

Disclosure. Some major venture capital firms are being forced to reveal key numbers on their performance because their major investors include public pension funds and university endowments. Government contractors, which have a long history of secret deals in the name of national security, may come under pressure to follow suit.

Companies

Hillcrest Communications. The Rockville company launched by Salix Technologies founder Dan Simpkins, is quietly creating a new interactive television technology. It's funded so far by venture capital firms New Enterprise Associates and Grotech Capital Group.


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