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Leslie Walker
Leslie Walker
Web Watch
Personal Tech

Leslie Walker's .com Live
Discussion with DEMOletter's Chris Shipley.

Thursday, Feb. 27, 2003; 1 p.m. ET

Chris Shipley
Chris Shipley
(Gary Wagner Photography)

Technology executives, scientists, product developers and journalists have gathered every February in recent years at the DEMO conference to review the latest trends and innovations in technology. This year's conference, which ran from Feb. 16 to 18 in Scottsdale, Ariz., featured presentations on Internet radio, fighting spam and computer security.

See "Innovations That Reinvent The Wheel," Leslie Walker's column on DEMO 2003.

Chris Shipley, the show's executive producer, joined Washington Post columnist Leslie Walker live on Thursday, February 27, from 1 p.m. to 2 p.m. ET to take your questions about trends in technology.

.com readers may recall that Shipley joined Leslie in 2001 and 2002 to discuss the DEMO expo. Read the archived transcripts: 2002 and 2001.

Don't miss Leslie Walker's .com column and her new Sunday Web Watch feature.

An edited transcript follows.

Editor's Note: Washingtonpost.com moderators retain editorial control over Live Online discussions and choose the most relevant questions for guests and hosts; guests and hosts can decline to answer questions.


Leslie Walker: Welcome back, Chris. Hats off for picking an interesting product mix at DEMO this year. When I read your program and saw it was about Internet radio, anti-spam, and business collaboration, I confess I yawned. But when I got to Arizona, the on-stage presentations were really intriguing. They showed a lot more interesting stuff is in development than I realized.

Let's start with the mood on the frontier. Last year it seemed somber. Did you sense more optimism this year among attendees, or was that resignation I detected?

Chris Shipley: There is a genuine optimism in the technology market today. Not irrationally exuberant, but a realistic hopefulness that the worst is behind, that the hard work through difficult times of the last year + really will pay off.

Leslie Walker: Hello. Thank you for joining us today.

Chris Shipley: Thanks, Leslie. I enjoy this forum and I'm delighted to be invited back again this year.

Leslie Walker: You started DEMO with a joke about a doctor and patient riding to the morgue in an ambulance. "But I'm not dead yet," the patient protests. "We're not there yet," replies the doc. Then you told Demo attendees: "We are an industry riding around in an ambulance hoping we don't end up in the morgue."

So now I'm wondering, how do you think this story might end? What scenarios do you see unfolding next?

Chris Shipley: The patient lives.

The point of the story is that so many people in the tech industry *think* whole parts of the business are dropping dead. That innovation is dying. Investing is dying. Entrepreneurial efforts are dying. It's just not true.

I argued at DEMO that there is more innovation today than we saw during the boom when everything was - relatively - easy.

San Francisco, Calif.: I went to your show this year and thought some of the products were odd picks. Mok3, that 3D scene-building tool, was one. Another was Pixim, the digital imaging company.

What in particular about these startups caught your eye, and in general what are you looking for?

Chris Shipley: I look for technologies that can be change agents.

If you are building 3D virtual environments -- for games, or film, or other purposes -- you are today sitting down with a set of tools that require a great deal of time and expertise and expense in order to create photorealistic 3D scenes. Mok3 extracts the geometry from a 2D photo and builds the scene automatically, cutting cost and time for production to a fraction of what it is today.

Pixim creates change in another way. Among other things, the technology brings dynamic range (light/dark) and resolution together to get much crisper video images. If you have a better image, you can do a lot of things with it (besides taking better vacation movies). Pixim provides a base technology on top of which visual imaging, digital identification, and other applications can be created.

Washington, D.C.: How are the startups you see these days impacted by the drought in venture capital.

Smaller staffs? More ownership given to the VCs? Longer period of "angel" funding before VCs will take a look?

Chris Shipley: Venture capital is returning to its "rightful place," I think. That is, it is moving from a seed stage of a company to its growth stage. Institutional capital plays best when it is used to fuel roll out and growth.

Much of the largess of the Internet Bubble came because young companies had too much capital and they spent it unwisely on the trappings of business (fancy offices, jet-setting, parties, advertising), rather than on the product development itself.

Today's companies are sticking to fundamentals (because they don't have the money for anything else). They are proving concepts, gaining early customer momentum, then bringing in the staff, the marketing, the machine to turn those proven concepts into market successes.

Washington, D.C.: What were the key policy/regulatory issues debated at your conference, and did you sense a consensus on how to address them?

Chris Shipley: The conference did not address these issues per se, although in the one forward-looking panel of industry veterans, the consensus seems to be that the market is a much better policy maker than are the policy makers.

Arlington, Va.: We used to see Web portals buying startups like crazy. No more. They make few acquisitions and at low prices. Yet they don't seem to have increased their own R&D budgets, except for Microsoft. AOL seems to be slowly imploding; Yahoo is making modest improvements. Lycos is losing so much money it's hard to believe it will survive.

Are we witnessing a slowdown in innovation at leading Web sites?

Chris Shipley: It is difficult for large organizations to innovate and to invent - period. These companies (particularly publicly traded ones) become very short sited, focused on core products, next quarter performance, and the like. There are exceptions, but it is rare.

M&A has been the primary way in which large companies "innovate" -- they simply buy innovation, rather than build it themselves.

So the question really is are entrepreneurs building companies to be acquired, and I think we're seeing much less of that today than we did 36 months ago. Why? Because the investor time-horizon has opened up and the pressure is off to build and flip companies. Moreover, a startup is much less likely to be funded if it a one-note song.

Vienna, Va.: Hi Ms. Shipley. Please tell us about some of the coolest stuff you see in development today.

Chris Shipley: At the risk of sounding more boring than "cool," some of the most exciting things I see today are products and technologies that can answer real needs now, vs. experiments that dabble in presumed needs of the future.

There is plenty of that happening, in research and academic labs, and it is important that this experimentation continue, as it sets the foundation for practical applications some 10+ years in the future. This stuff -- robots, visualization, atomic manipulation -- is cool, to be sure. And it's a long way from being practical.

The cool things I see today are real products that have roots in technologies I covered 10 and 20 years ago. machine learning, computational linguistics, sensor technologies, communications infrastructures . . .

They all come together and give you something like Digital Sun's S.Sense irrigation system, that determines through the use of moisture sensor that the lawn needs (or doesn't need) to be watered, uses a wifi mesh network to send a command to a central control, which turns the water on (or off). A lot of technology put into a simple package to do something pretty fundamental, but with significant consequence (water conservation, ground water pollution reduction).

Leslie Walker: Email was a big theme at the show. You must have looked at a whole lot of spam-fighting tools to pick the ones that made it on stage.

Do you sense technology is getting close to being smart enough to block most unwanted email without accidentally blocking important messages?

Chris Shipley: The technology is getting a lot better, but I'm afraid that is only half the problem. The other half is a virus of individuals who are the exploiting legitimate resources of others in order to propagate their (unwanted) messaging. The problem, however, is not just the inbound spam that we have to contend with as end users, but the hi-jacking of legitimate mail servers to send outbound spam. It's a kind of insidious hacking that doesn't have an easy technology solution.

That's one reason I choose Cloudmark to present at DEMO. The company has a grand vision of disrupting the "spam economy" such that it no longer becomes cost effective.

Arlington, VA: What is the state of art of machine translation? Are there any new breakthroughs that make MT more reliable?

Chris Shipley: Take a look at Meaningful Machines, a company that presented at DEMO this year. The technology has been vetted at Carnegie-Mellon and elsewhere and seems to advance the state of the art significantly by focusing not just on direct word-for-word translation, but on concept and meaning. Very interesting company.

Arlington, Va.: Hi Leslie. I sensed from your column that you didn't consider most products at DEMO to be innovative, mostly "incremental" changes to old technologies. Is that true? Do you think we need more innovation to get the technology industry humming again?

Leslie Walker: My point was that major innovations like the birth of the Internet are rare. Important innovation inbetween the big bangs are mostly about figuring out how to make them work. I don't think lack of innovation is holding the economy back. Arguably, too much innovation is what made it tank.

Chris Shipley: I agree with the Big Bang theory of innovation. If you look at the last 30 years of technology, there have been only a few MAJOR breakthrough changes. All else was built -- and innovated -- on those breakthroughs.

This industry has a whole lot of innovating and evolving to do on the current "big thing" (Internet Technologies) before it will be ready for another Big Bang. There is a 15 to 20 year cycle of innovation (consider the PC, etc.) and we're not even 10 years into this current cycle.

Vienna, Va.: Did many companies from the Washington area introduce new products at DEMO?

Leslie Walker: I saw one--Eka Systems of Gaithersburg. They have a wireless networking system involving some patented hopping algorithm. It's already being used in some schools in Northern Virginia to reduce utility costs. Chris, were there others?

Chris Shipley: We had a strong delegation of East Coast companies, but mostly from the Northeast.

I would welcome anyone in the Washington area to contact me with the companies and ideas and products they are working on.

Alexandria, Va.: Chris, do you keep track with the performance of past DEMO companies? What were the biggest winners and flops?

Chris Shipley: Yes, informally I track the companies, but my purpose is less to track companies than to track ideas (which tend to have a better survival rate than the companies themselves).

For example - in 1994, DEMO hosted the launch of the Interchange Online Network, a project that I was involved with in a former life. That product had some extremely innovative ways of dealing with what we called the "sea of data" available in online services. The company was sold to AT&T and Interchange was put on ice. At DEMO this year, we saw a couple of products that resurrected these ideas. Stata Labs, Groxis, OpenCola -- all of these had elements from that now defunct product.

There are homerun companies at DEMO, though. Palm, WebEx, ETrade, various bluetooth and WiFi technologies.

And some clinkers, too. In 2000, I invited 15 innovative Web companies to show in a special pavilion. One of those, half.com was sold to eBay. The majority of the others are no longer with us.

Washington, D.C.: Every year at every technology conference, people say the world of "ubiquitous" or "pervasive" computing is just around the corner. It never seems to arrive, despite all the wireless network development going on, and all the new handheld computing devices.

Do you still think ubiquitous computing is just around the corner?

Chris Shipley: I call it "device computing" and I think it is here. We are, more or less, at the corner. We're challenged, though, by the definition of "pervasive," which in many minds has come to mean something very high-tech, very miniaturized, very embedded. That may be what is down the block after we turn the corner. For now, device computing is generally about information flow where ever and whenever information is needed. It's about a network of devices, computers, sensors tied with a communications infrastructure.

Digital Sun is very much an example of device computing. So is the IBM Research demonstration of a handheld with embedded camera and communications module that enables digital images to be captured, sent to a server, processed, and returned to the device as usable information. "Ubiquitous" cell phones are part of device computing, as are bluetooth, WiFi, and even land-line networks.

Takoma Park, Md.: Is it time to get a flat screen monitor for my computer yet? Is it true that a 15-inch flat screen offers the equivalent screen space of a 17-inch traditional monitor? What do you need to look for a in a monitor?

Leslie Walker: I await Chris's answer because I am still stuck with big fat monitors on all my desks and haven't been willing to shell out the bucks for those cool skinny screens.

Chris Shipley: The short answer: YES. Maybe not for the reasons you think, however. LCDs are much easier on the eyes; if you work extensively on a computer, you will notice a remarkable difference in your eye comfort and sight between an LCD and a CRT. LCDs are also much more environmentally sound. They take much less desk real estate. They use much less power. They are better looking. And all these benefits more than make up for the (ever-falling) price.

Arlington Va.: What among all the stuff at DEMO do you think either of you will personally use?

Leslie Walker: I will use at least two products. One is Active Words, which lets you create text shortcuts to automate tasks on your computer. Another is Picasa, the new photo album software. I also plan to test "Ella" (short for electronic learning assistant), the new email filtering tool from Open Field Software. I can use all the help with email I can get!

Chris, any tools you plan to use?

Chris Shipley: I'm using ActiveWords now, and also OddPost - a web mail service that brings all the benefits of Web mail and the benefits of desktop mail together (with a low cost and no ads!)

And I would agree with your other choices as well. I am also working with Grokker. I would love to have Pixim technology in a camera (but that's a ways off for consumer products, I suspect). I want to see EFI be successful in changing enterprise and mobile printing.

In short order, we'll be using SupportSoft's technology -- without realizing it. The same is likely true for some of the security products, as well, particularly something like Liquid Machine's document protection technology.

Vienna, Va: Do you see cell phones as becoming increasingly more sophisticated: color displays, connects to a fax machine, emails, games...?

Leslie Walker: I think that's an understatement. Cell phones are getting so absurdly complicated you can hardly tell they are phones any more. I question how much money is being wasted on adding functionality that nobody really wants.

Chris Shipley: Agreed. We're stuck in a features war, right now, played out entirely for the benefit of early adopters. I've gotten numerous comments from folks because I use a very simple Nokia phone -- no bells or whistles. And I like it that way.

The cell phone, in time, will be a remote control for so many other "computing" activities. But I don't think you need to have a lot of technology in the phone it self to make that happen.

Rockville Md.: Where is the most interesting high-tech research being done these days?

Chris Shipley: This is a tough question to answer specifically, but as I said before much of it is NOT happening in large organizations. Certainly, IBM, Intel, and to a lesser degree Microsoft are all doing fundamental research of one sort or another, but even these organizations have begun to look for more near-term payback in their research.

The real mind-boggling research, I think, is being done in academia. And that means it is the furthest from being productized.

Washington, D.C.: What's your assessment of the state of data-mining software today? Any sophisticated new tools in this area that you can tell us about?

Chris Shipley: Data mining is shifting away from large depositories of data that are sifted for "gems of information." These were expensive and very hard to maintain. Instead, computational power has evolved to enable more real time mining, typically around very specific issues.

So, for example, OpenCola, Groxis, and Tacit Knowledge are all data mining products of a sort, identifying and distributing information on the fly.

Bethesda, Md.: Internet radio is mentioned at the beginning of the chat. What is it?

Leslie Walker: I'll let Chris handle this one. And maybe she can tell us, too, what became of the Kerbango Internet radio that debuted at DEMO 2000, also the Simple Device in-car Internet radio that rolled out at DEMOmobile in 2002.

Chris Shipley: First, the obits for Kerbango and Simple Devices. Kerbango was acquired by 3Com shortly after the company debuted at DEMO. Simple Devices had funding "challenges," laid off much of its staff, and has never been able to bring the product to mass market.

The newest entrant in the space is TerraPlayer from TerraDigital. This product, I think, has a good shot at making it in the market -- if they can get to a price point that is significantly less than where they are starting ($800+). I think of this product as a distribution and playback device for the digital audio that you've downloaded to your PC. Very different model from Kerbango and others that expected a network connection directly to the device. I also invited this company to DEMO because of its UI innovations. Very visual metaphor that makes managing a mass of data very simple. It's definitely worth a look.

Leslie Walker: We will be wrapping up in a few minutes, folks. Thanks for all your good questions.

Rockville Md.: What do you think the risks are for the technology industry today? By that I mean big challenges which, if not successfully met, could produce awful or disastrous results. For example, if Internet security doesn't improve, is all of ecommerce at risk?

Chris Shipley: This is a great question worthy of a forum unto itself.

Security is key, for the reason you mentioned and more. In fact, the security of information networks (public and private) is as big a national security risk as is any of the terror issues that have captured headlines.

An extension of security is reliability and robustness. I think this poses a significant challenge in many ways. Ironically, as technology gets more complex, it becomes more distributed and to less sophisticated users. The technology industry is faced with a challenge of making highly sophisticated technology "just work" in ways that don't require IT departments and advanced degrees, because these technologies are being adopted and taken for granted as part of a larger, organic system.

As we rely on technology more, technology has to become absolutely reliable.

Leslie Walker: As you look forward to next year, are there other emerging new themes or trends we should watch, ones you'd like to feature?

Chris Shipley: Honestly, I never know. That's what makes DEMO so intriguing. It is a long process of talking, searching, evaluating -- and from that synthesizing the year ahead.

It's much more like going to the farmer's market and picking the freshest, most unusual ingredients, then trying to configure a meal from it. Much more challenging, surprising, and interesting than cooking from a recipe.

Leslie Walker: That's it for today. A big thanks to Chris to taking the time to answer our questions, and to all who participated. We wish Chris good luck on her annual hunt for cool new stuff to show next year. Meanwhile, hope to see everyone online again soon.

Chris Shipley: As always, it's been a great pleasure to talk with you and to respond to your fantastic questions.

Thanks so much and keep an eye on www.idgef.com/demo to learn about and follow the companies we talked about today.

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