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Leslie Walker's .com Live
Discussion with DEMOletter's Chris Shipley.
Thursday, Feb. 14, 2002
| Chris Shipley |
(Gary Wagner Photography)
More than 60 new technology products launched this week at the DEMO conference in Phoenix, an unusual trade show where executives have only a few minutes to explain their mission on stage before hundreds of industry leaders (Read today's .com column on DEMO, and check out Leslie Walker's photo notebook from the event).
Chris Shipley, the show's executive producer, joined Leslie Waker to take questions about trends in technology. She screened more than 300 new products to select 65 shown in Phoenix at DEMO 2002.
Mobile products, Web services and Internet videoconferencing were among the most popular categories selected for the show. While past shows were launching pads for such hot items as the Palm Pilot and Java programming language, this year's event featured a new cell phone keypad with raised letters, a personal robot developer's kit, a .net financial advisor service from Microsoft, a longer-life battery and all sorts of mobile-management software.
.com readers may recall that Shipley joined us in early 2001 for a discussion about DEMO. Read the archived transcript here.
An edited transcript follows:
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Leslie Walker: Hello everybody and welcome to Chris Shipley. Let's start with the birds-eye view.
To me, DEMO 2002 seemed more interesting than usual because it featured such a variety of ideas, from futuristic ones still in the labs to ready-for-market products hitting stores soon. The products reflected a surprising amount of innovation, considering the recession.
Chris, how did the level of innovation this year compare with the show's 12-year history?
Chris Shipley: Overall, I see more real innovation now than in recent years. The products and technologies coming to market today are addressing business needs and consumer concerns in ways that we didn't see in the go-go years.
Arlington, Virginia: Ms. Shipley, what do you think is the neatest thing exhibited this year, and why?
Chris Shipley: It's hard to identify just ONE thing. We saw a lot of great technology in a number of different areas. Personal favorites were TeleSym, which enables VoIP on a PocketPC device -- the sound quality is unbelievably great; Deep Video Imaging - with a multi-plane monitor that enables better cognitive recognition of data; Virtual Ink's Mimio - wireless electronic whiteboard capture . . . I could go on. The point is that the room was filled with 65 awesome products that demonstrate that innovation is very much alive.
Silver Spring, Md.: What's your opinion on speech recognition--is it ready for prime time yet and will it be the dominant way we consume wireless data?
Chris Shipley: Speech has come very far in recent years, although it still faces challenges with ambient noise, speaker independence, and the like. In limited domains (stock quotes, for example, or voice navigation) Speech recognition is quite effective and much better than touch tone interfaces. One example is the United Airlines flight status line. Excellent use of voice recognition.
Washington, D.C.: Did Sept. 11 have any impact on the kinds of products that you selected for presentation at DEMO 2002?
Chris Shipley: The terror attack didn't affect the kinds of products so much (except perhaps in one instance -- Octave Communications has a instant conferencing system that would have enabled people to be quickly in touch in a crisis). But it did affect the ability for some companies to get their products to market -- to get funding. So we may NOT have seen some companies because they were inhibited by economic factors sparked by Sept. 11.
Arlington, Va.: New product offerings at your show are down only slightly from last year. Do you expect a dropoff in coming years due to the downturn in venture capital financing?
Chris Shipley: No, I don't. I do think we will see fewer companies, but those that we see will be doing work that is well vetted and more likely to be successful.
Falls Church, VA: Hi Chris and Leslie,
Loved the conference hopefully we'll be there next year! Quick question about the mood: I talked to a few attendees who thought the confenference was much more somber than years previous, it seemed eveyone had their nose to the grindstone! Care to comment?
Leslie Walker: Ah, hello to Cincro Communications, one of the demonstrators at this year's show. To me, the mood felt realistic. Maybe a tad somber, yes, but not as dark as last year, when the tech train wreck had just occurred. Execs I talked to this year had a more realistic sense about what they were doing than last year, and the dreamy dot-com sense of what-if was long gone.
Chris Shipley: I think we are a more serious lot these days, and I suspect that is a good thing. We're not breathing our own exhaust about how great technology is, but rather listening to the market and responding to real customer input.
And, congratulations on your launch of an outstanding product. I really like the collaborative web space metaphor you are brining to market.
Rockville Md.: Do you see signs of a turnaround in the tech industry? Any signs that another big growth spurt might be coming soon?
Chris Shipley: I think we've hit bottom and are making a turn around -- that seems to be the mood of others at the conference. But I don't think we'll see a big hockey-stick upturn any time soon. We'll have steady slow growth, a modest slope, over the next year or so.
Falls Church, Va.: How many presenters at DEMO 2001 are still in business?
Leslie Walker: This is a good question. I thumbed through my Demo 2001 book last year and it seemed that more than a dozen had gone out of business. But the more interesting thing I noticed was how many of the IDEAS survivied. Take the Kerbango Internet Radio presented at DEMO two years ago. It died, but in the past six months almost every major home stereo manufacturer has created their own versions.
Chris, 'fess up, have you tallied the survival rate from last year or other shows past? ;-)
Chris Shipley: I said at the conference that I would prefer my "portfolio" over those of many investors. But DEMO isn't about choosing winning companies, it is, as Leslie pointed out, about choosing winning ideas.
If you look at DEMO historically, there are many companies that are no longer in business or no longer independent, but whose technology and product ideas remain very important. Hot Office, for example, was the first ASP -- before we even had that term for it -- in 1997.
Alexandria Va.: I'm watching with interest the development of combo PDA/cell phone units; not quite ready to make the jump yet because I get the impression they're not quite "there" yet. Would -love- to get a PDA, but can't quite rationalize it yet until it does more functions. Any likelihood that the manufacturers of ebook readers will consider joining with PDA mfrs? There are ebooks for PDAs, but AFAIK, none from the major publishers.
Chris Shipley: I've heard nothing from the ebook folks to suggest that they are looking at multifunction (ebook/PDA/phone) devices.
I would agree with your assessment that the PDA/cell phone combo isn't quite "there" yet, and I think the reason is simply because the cell phone people haven't gotten their heads around doing a device in a form factor that makes for a usable phone with PDA. The combos I've seen are too PDA and not enough phone. I think that needs to be flipped to make this category come alive.
Bethesda, Md.: Following up on the speech recognition question asked earlier, have you seen any language translation software that really wowed you? Are we close to having software that can translate text quickly and fairly accurately to other languages?
Chris Shipley: It's coming. I can't say much more, but keep your eyes on a company called Fluent Machines. They've got this right, and will be in the market shortly.
Herndon, Va.: When you talk to executives, what kind of technology are they crying out for?
Chris Shipley: Most companies are looking for leveraging technologies -- things that will improve business process and communications effectiveness. They are NOT looking for big infrastructure plays, but lots of incremental improvements.
Arlington, Va.: I read Leslie's column today and she mentioned the guys trying to offer Web connectivity by hitching devices on to weather balloons. Now really, is that a practical business model? Why did you pick them to present?
Leslie Walker: Good question. I highlighted SpaceData, the would-be weather balloon network, for a couple of reasons. First, I found it interesting that three companies were featured trying to create national wireless broadband networks. (Boingo and ArrayComm were the others.)
Second, there was a clear trend at the show of companies leveraging old-world technologies in innovative ways. Zinio Reader's digital magazine was an example. The helium balloon wireless network fell in this category too, in the sense that they are leveraging balloons already being launched by the National Weather Service.
Is it a viable business model? I'm not sure. I was skeptical at first, but a number of industry execs I questioned at the conference thought it was a clever idea for filling in our nation's spotty cellular coverage.
Chris, any thoughts on the viability of SpaceData, or why you picked them?
Chris Shipley: I confess that I was VERY skeptical when I first heard about what SpaceData was doing. But they have found a very cost effective way of deploying a system that could bring wireless coverage to remote geographies. They've lined up the partners, and it seems like a very workable solution.
Washington, D.C.: How do companies go about getting invited to present at DEMO? Do they seek you out, or do you go out looking for what's new and exciting?
Chris Shipley: The short answer: yes. We issue a "call for demonstrators" in the late summer of each year, and accept applications on our Web site (www.demo.com). And we also actively seek out new companies, products and technologies in an effort to get a complete picture of what's new and coming to market.
Herndon, Va.: Thanks for answering my question about what technologies execs are crying out for.
Follow up: From your answer, it sounds like the manufacturers of collaborative software (supply chain mgt etc.) are the ones with the most to win in the currently climate, not the makers of the latest tech gadget. Care to comment?
Chris Shipley: I had an interesting comment from a VC who said he comes to DEMO to "see the enterprise stuff that will get my investment dollars and the cool consumer stuff that gets my personal money."
I don't think enterprise application and infrastructure players will "win" over consumer gadgets, per se. They are addressing different markets. I do, however, think the consumer players are going to have to focus on delivering cool products with staying power in order to reach beyond the early adopters who will (quite frankly) buy anything and thus establish themselves in the wider consumer market.
Bethesda, Md.: Given the slowdown in venture capital investment and the shift of employment opportunities away from start-ups and towards large companies, do you believe that established firms will rely more on internal R&D to produce new innovations, or will they continue to pursue alliances with start-up technology companies?
Chris Shipley: I think both models will continue to work. Start-up ventures are innovators because they have no legacy systems and customers to worry about. Innovation within large organizations can be very difficult and frustrating, and few companies are really very good at brining internal R&D to market, particularly when the R&D is disruptive to current product lines.
The difference, though, is that start-ups will be much more vetted than in the late '90s. New companies will have to prove much more in order to get the funding to drive a product to market. They will need to be more scrappy and they will need to focus on selling -- even before products are ready for prime time.
Rockville, Md.: What is the capital flow like for technology start-ups these days. I know there are hardly any IPOs, but how hard is it for tech companies to raise the venture capital they need to stay alive through this economic downturn?
Chris Shipley: Raising money is never easy -- even in boom times. But now, entreprenuers must show a path to revenue and profitability and a clear plan to execute in order to reach those revenue objectives.
The venture funding measures I watch, though, suggest that money is getting invested at a rate of $100 million or more a week in some places. But you're not seeing $100 million going into one company in a race to an IPO. Liquidity horizons are longer and investors have regained their patience. This is all goodness, I think.
Washington, D.C.: From the DEMO 2001 program: "DEMO 2001 will be the proof that the technology industry is entering a period of solid growth and exciting innovation." How has your outlook on the industry's future changed since then?
Chris Shipley: A year ago, I didn't have a clear vision of just how long the entry way would be . . .
No one, a year ago, knew just how far back to basics we would have to go and no one anticipated the Sept. 11 events that would knock the legs out of what growth was beginning then.
That said, I still believe we are "entering a period of solid growth" and I have seen a lot of "exciting innovation." But as I said before, this is not hockey-stick curve growth. It's step by step hard work that moves technology markets ahead. And I see an industry, and the mood at DEMO reinforced this, that is ready to get to work rebuilding this market sector.
Alexandria, Va.: I'm tired of the wireless Web hype. No one I know enjoys surfing for Internet info. on their cell phones or PDAs because it's so slow, clunky, and even expensive. How many years do we have to wait for a user-friendly wireless Web? Is the 3G revolution the answer?
Chris Shipley: It's been hype, I agree, because the industry tried to stuff the desktop browser metephor onto a handheld device. No one was paying attention to the needs of users of handheld devices . . . until recently. We are now beginning to see some viable ways to send specific information to cell phones or PDAs using IP as a conveyor. It's IP that's important, not Web HTML. And we can do a lot with 2.5G now and soon.
Leslie Walker: Everybody wants to know what's the hottest thing. I laughed when you asked the analysts on stage at the end of the show what they liked best, and they gave dramatically different answers. I did my own survey of the audience, and no two people picked the same item as their favorite the show. In fact, some people mentioned stuff I considered goofy, or lost causes.
My personal favorites were things venture capitalist could care less about, because they won't make huge standalone businesses. The new alphanumeric cell-phone keypad was an example-not necessarily a big business, but it might make my life easier.
What are your main criteria in selecting companies? Is the business model more important than the idea, or are the two weighted about the same?
Chris Shipley: Actually, I think DigitWireless can be a huge business, because it is enabling technology that could be licensed for use on EVERY cell phone. It's a lot like the Bott Dot, those highway reflectors. Urban myth is that the inventor of that highway bump got a penny a piece of each one. That's a lot of pennies. Could be the same for DigitWireless.
BUT, that wasn't the question. I look for products and technologies that are disruptive, that change a market or create a new market. I look for things that make life easier, that answer real market need. . . and more and more I look for those things to come from entrepreneurs and companies that can make them real. Business models, I think, can be adapted, but the technology has to be sound and address a real opportunity.
Bethesda, Md: Do either of you believe the "Web services" vision of automated data exchanges between various businesses online is likely to become reality in less than five years? Are there many doubters in the industry who think Microsoft, IBM, Sun and other big vendors are over-reaching on this one?
Leslie Walker: The show featured a good dialgue on stage between real techies at IBM, Sun and Microsoft's .Net initiative. Personally, though, I think the Web services drive to automate machine-to-machine communication over the public Internet is going to take a lot longer than the vendors imagine. Chris?
Chris Shipley: I would agree with Leslie's assessment that automated systems will take longer to adopt, but in the mean time, I do think we'll see Web services offered in ways that enable customers to leverage third-party/vendor services to improve their own eBusiness propositions. Microsoft's MSN Money Professional is a great example. A mid-sized brokerage isn't able to invest the millions to create real automated financial services that customers now expect and demand. By using MSN Money Professional, these brokerages can provide these services to their customers under private label. We'll see this private label vision happen first, followed by internal Web services implementations to support enterprise data sharing.
San Francisco: I've been wondering when text messaging between mobile devices is going to take off in the US to levels similar to in Europe.
Do you see any trends in this area, or did you see anything cool that you think could lead to more interest and adoption by more people?
Thanks for being here today.
Chris Shipley: The best example of U.S. success in this space is the Blackberry. But even that is not close to the billion SMS messages served in the UK each month. We have infrastructure legacy issues to overcome, and perhaps even some cultural differences that makes SMS less successful here than in Europe or Japan.
Products like DigitWireless, though, may help ramp adoption.
Leslie Walker: You showed some futuristic stuff from research labs on stage this year. Most interesting to me was IBM's metapad, a miniature (3 by 5 inch) computing device you could plug into all sorts of things. Why did you decide to feature the metapad from all the next-generation work going on in labs? What's its significance?
Chris Shipley: In time (and I can't predict how much time), computing is going to become invisible. It will be integrated into so many things so that we'll not be forced to lug laptops or race to Internet cafes in order to do email and the like. The metapad is a step in that direction and that's what made it interesting to us.
Washington, D.C.: Were there any companies from the DC area at the show? Also, were there other Washington-area companies that applied and didn't make the cut?
Leslie Walker: Northern Virginia's Cincro Communications (maker of Looking Glass Web publishing and collaboration tool) was the only local company I saw at Demo this year. Chris, were there others I missed, or ones that might have seemed promising among those you screened?
Chris Shipley: Cincro is a terrific company and I was delighted to have them at the event. Frankly, though, we don't see a lot of startups from the D.C. area. If you're out there -- and I'm sure you are -- I'd like to hear from you. Drop me an email, check out our web site. Don't be a stranger.
Falls Church, Va.: You mentioned ASPs earlier in the chat. Isn't the ASP model getting punished fairly severely by the market? I'm thinking of several ASPs in the DC area, like USInternetworking, that are in very bad shape.
Chris Shipley: Like so many "next big things," the ASP model was believed to be a cheap and easy way to deploy a lot of products. ASP is a channel, though, not a product or even a business model, per se.
So the companies that offered great products via this channel -- salesforce.com and upshot were both at DEMO 2002 -- are doing well. Those that used the ASP model to deliver products that weren't serving real needs heard from the market. Unfortunately, the channel strategy (ASP) got a bad rap because of this.
Silver Spring, Md.: What trends are you seeing in business software, new software for use by big corporations?
Chris Shipley: It's all about leveraging what's already been installed. At the back end, performance management and systems administration tools are a major market. In the front office, it's collaboration and communications. And in both cases, it's about taking advantage of the millions already invested in infrastructure and IP networks.
Washington, D.C.: Are there any technology innovations that either of you personally use and would recommend?
Leslie Walker: Ok, I confess I do less and less early adopting these days. I find the learning curve on many new devices far exceeds the payoff. And the price of most new toys spirals down faster than I can figure out how to use them! That said, I just bought a DV digital camcorder and Pinnacle Studio 7 home video editing software. I am having a lot of fun with it. Next I hope to buy a personal video recorder, but first I have to find more time to watch TV.
Chris Shipley: It might surprise you to hear that I am more or less an "average" consumer when it comes to technology adoptions, primarily because I don't have the time or interest to burn on gadgets that don't deliver value. That said, among the products at DEMO this year, I will likely adopt the Mimeo whiteboard system -- because I think it will make sharing meeting notes MUCH easier and because I am a whiteboard junkie. I like the Telesym VoIP phone and it may be the technology that pushes me from the Palm to PocketPC platforms. I think Boingo Wireless is essential to tapping into wireless networks.
But I have to say that the technology most recently adopted in my home and most recommended now, is TiVO. It has absolutely changed the way we manage entertainment in our house.
Leslie Walker: Mobile computing, as I've said before, seemed to me the most important trend you've featured at the show the past two years.
Can you peer into your crystal ball and tell us what potential catalysts you see in the next few years to accelerate what appears to be the still-slow adoption rate for wireless data networks?
Chris Shipley: Two things: blanket coverage and easy access. Couple these with broadband availability, and I think you will see wireless adoption go way up in both corporate and home settings.
Boingo Wireless, I think, is a great start because it gives businesses a way to make money from the wireless access points they install AND because it makes it easy for consumer to tap into those networks.
And I think easy to install and manage wireless will be key in home systems, particularly as various digital entertainment systems come to market.
Arlington, VA: Except for the cell phone, I honestly can't think of any other tech gizmo in the past two decades that has truly changed my life. But I imagine millions (billions?) are spent each year in building AND PROMOTING gadgets that will do just that. I mean no insult, but conferences like DEMO seem to just pollute our lives with hype. Sorry if I sound disgruntled, I'm just tired of unfulfilled promises.
Leslie Walker: Fair enough point about there being too much hype surrounding new technology. I know the hardest part of my job is figuring out what NOT to waste time on. I'd love Chris's view on how she tries to cut through the hype and discern what's real.
Chris Shipley: I agree that there is too much hype about things that really don't matter in the great scheme of things -- in technology and in other markets as well (Do you have any idea how much money is spent on inventing and promoting the Jack in the Box triple combo cheeseburger?)
At DEMO, we look at literally hundreds and hundreds of products each year. I try to look at these from the perspective of a user -- which I am -- not as a technology junkie. I try to understand how a product will address a real need or concern -- or even how it will tweek a nerve and get someone excited about it as a momentary fad.
Washtech.com: Leslie: You wrote this about DEMO 2001: "a big theme of this year's conference was how mobile computing is finally going mainstream."
This year, you wrote: "Many companies at the two-day show are preparing for the day when more computing will be done on the go, via laptops, handhelds and wireless hookups to the Web."
Chris: Do you think Leslie will be writing the same thing next year?
Leslie Walker: Just to add one thought. I tried to point out today that expectations keep building for wireless data connectivity, and those expectations were on display in the audience at DEMO. Last year atendees were happy just to have a wi-fi network; this year they were grousing that it kept going down and slowing to a crawl.
Chris Shipley: I think we'll all be writing about this for a while, because we are definitely moving in this direction. I suspect in the next 3 - 5 years, though, it will become a non-story because wireless, ubiquitous computing will be reality.
Chris Shipley: It's been great talking with you today. Thank you all for the good and insightful questions.
Leslie Walker: That's the end of today's chat. Thanks to everyone for submitting questions. And a special thanks to Chris Shipley for taking time to give such thoughtful answers.
Hope to see many of you again soon!
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