The largest start-up venture in corporate history, Satellite Business Systems, brought to this sleepy space center Saturday more than 300 representatives of some of the nation's largest businesses for the successful launch of what is heralded as a new age in business communications.
SBS's first satellite, SBS-1, a 1,200-pound, $21-million device that its backers say is the fastest and most powerful communications satellite, was blasted through heavy cloud cover into space Saturday evening by a Delta rocket. The launch is the first major step in putting the five-year-old partnership into full operation.
"This is going to revolutionize the way businesses communicate over the next several years," said Robert Hall, the exuberent, almost evangelical SBS president.
For the employes and customers of SBS, the launch represented an opportunity to see that the company is more than an extravagant dream. The cheering from SBS people as the vehicle lifted off, combined with the prime rib dinner and flowing alcohol that followed was more an inducement to step up the company's marketing pace than a celebration of success.
"We may have a satellite up, but we don't have a business up yet," Hall reminded the launch dinner group.
A team of officials from the National Aeronatics and Space Administration; SBS; Hughes Aircraft Co., the satellite's builder; and McDonnell Douglas Corp., the builder of the Delta rocket, termed the launch perfect, as jubilant customers and SBS staffers, customers and potential users celebrated a major event in the high stakes game being played out from SBS's McLean headquarters.
What is at stake is nothing less than what will soon be an investment totaling $500 million by three major companies -- International Business Machines Corp., Aetna Life & Casualty Co. and Communications Satellite Corp.
The cash outlay has been close to $375 million before the company brings in a penny of revenue, although Hall expects the company to show a profit in 1983. The launch itself cost the company more than $42 million, with the Delta rocket priced costing $22 million.
What may also be at stake, SBS spokesmen say, is the basic way the nation's companies do buisness and the direction of a slew of competing companies, the largest of which is none other than American Telphone & Telegraph Co.
Less certain than the stakes, however, is whether the role SBS hopes to play in the corporate communications world will be as perfect as its first launch and whether Hall's confidence is justified.
What SBS is gearing up to do, via SBS-1 and two other satellites it hopes to launch within two years, is link, through earth stations, businesses across the country for all or at least significant parts of their communications needs, eliminating virtually all but the local services offered by the Bell System.
That potential package includes conventional telephone service, data, "talking computers" and television or "teleconferencing" service in the first high-speed digital system of its kind.
Although Amercian Satellite Corp., a Fairchild Industries Inc. susbsidiary, for example, offers a similar satellite network to businesses, only SBS, at this point, is marketing such a complete system through a satellite devoted exclusively to SBS customers.
SBS, which since its fledgling stages four years ago, has evolved from a company offering luxurious communications systems appropriate only for the nation's blue chip companies into one offering conventional long distance telephone service to just about any business with substantial long distance phone bills. Whether the nation's large and small businesses are ready for SBS is another question.
"What this is, is a prayer meeting," said Howard Anderson, an industry analyst who attended the launch representing The Yankee Group, a well-regarded Cambridge, Mass., consulting firm. "The users are violently hoping this thing works because they have jobs on the line."
Anderson said there is a 50 percent chance SBS will be an "outstanding success" and reach its projected goal of $400 million to $500 million a year in sales during the middle of this decade. But he also said there is a 30 percent chance the company will be only a "marginal success" and a 30 percent chance the effort will be a failure.
If SBS ultimately doesn't make it, the three partners who have sponsored the effort are going to be out $500 million, the figure that financial experts say is the highest startup cost ever assembled for a new venture. "What may be pocket change for Aetna, Comsat and IBM is a lifeline around SBS," Anderson said.
Other losers could be the 11 firms who have committed themselves to SBS service, companies like Boeing Computer Services -- SBS's first customer -- General Motors Corp, Travelers Corp., Wells Fargo and Co., Westinghouse Electric Corp. and Sears Roebuck and Co. "More than 490 out of the Fortune 500 are non-believers," Anderson pointed out.
Boeing, the first customer expected to operate a chunk of the SBS system, will not receive service until next year, after SBS has finished testing SBS-1.