Innovative technology proliferates in
BOCA RATON AND DELRAY BEACH
as the spectacular successes of e-commerce ventures become a VIRTUAL REALITY
by Ted Curtis, Palm Beach Illustrated, April 2000
IT'S LATE AT NIGHT AND DAVID KARRAM IS ON THE WEB AGAIN.
After putting in a 12-hour-day creating some of the slickest sites on the Internet, the owner of Virtual 3D, a Boca Raton-based Web design firm, is checking out the competition. "I'll be on for hours at night, researching other sites and seeing what other companies are doing:' says Karram, 29, His company specializes in the next generation of Web sites - multimedia pages incorporating imagery and sound. "In this business, you need to stay on top of what's happening on the Web. "He's not alone in the Boca Raton/Delray Beach area, which has a corporate base ranging from Web-page-design-and-site-hosting companies to pure-Web e-businesses to some of the most creative Internet corporations in the industry. In fact, south Palm Beach County has become "Dot-corn Beach," one of the nation's fastest growing technology communities.
Working the Web
One of the keys to Web business is, well, getting business on the Web. That's where many of Boca/Delray's Internet companies more than a dozen Web-design-and-site-hosting firms - come into the picture. Hiway Technologies, a newly merged division of major player Verio, hosts more than 120,000 Web accounts from its central Boca headquarters. Companies such as American Internet Technologies, WAMnet and Web-One Communications continue to seek their own niche. And cutting-edge, customized boutique firms such as Accns and Virtual 3D continue to surge in popularity.
"Look at all of the companies getting onto the Web' says Karram. "This is where it is all happening."
Some of the Web's most popular pure e-business sites are here as well, such as entertainment leader
Hollywood.com and medical site Cybear.com. Plenty of others are on the way, including online stock-market trader Tradeology.com. Another Boca online broker, Onlinetradinginc.com, was sold in January to stock-trading software developer Omega Research for $125 million. Both companies will have Boca Raton offices.
Other Dot-corn Beach companies' routes along the Internet boom may be less traditional, but equally successful. Intellectual property manager Alteo Group helps companies manage their Web copyrights, trademarks and patents. Cylex Systems offers an Internet-accessible corporate data storage-and-retrieval system. Blue Sky Technology Systems allows companies to use the Internet to access complex data management software stored on Blue Sky's computers.
Perhaps the most successful of all of these e-companies - and maybe one of the most successful startups- has a modest Web site, doesn't sell a thing on the Internet and hasn't yet earned a dime of revenue. That is, unless you count the sale of Boca-based Qtera itself. In December, Canadian telecommunications giant Nortel Networks agreed to buy Qtera for $3.25 billion in Nortel stock.
Qtera's Internet hook: The Boca company claims to have developed technology that will allow data to travel along fiber-optic phone lines at far greater speeds than today's best transmissions. It is technology that could transform the "World Wide Wait" of the past into the real-time Internet of the future.
Where did it all come from?
Dot-com Beach is a classic overnight success story - though its roots date back 30 years.
Throughout the '70s and the '80s, Boca Raton was home to the technology pioneers at IBM. Nearly 10,000 employees worked at the company's Blue Lake campus, birth place of the personal computer. But when Big Blue bolted in the mid1990s, leaving only 500 workers in South Florida, Boca/Delray's technology future appeared to be powered down for good.
But a funny thing happened on the way to the technology graveyard - not everyone left town.
"When IBM split, the company left a whole lot of people who liked living here so much that they were not going to leave under any circumstances," explains Scott Ellington, executive director of FAU Research Park, one of a growing number of "technology incubators," which gather many small companies into one office site. "Look up and down these new e-businesses. The core groups that make these companies tick are full of old IBMers."
"It's a pretty great way of life with the sun and the weather:" says John Lawlor, owner of Boca-based
EmailChannel, an online information distributorship."Just that alone is a big drawing card to get new people to come down here."
So too is Boca/Delray's economic quality of life - considerably more affordable upscale living than can be enjoyed in the off-the-charts-expensive Silicon Valley area."The pay may be a little bit lower here than in Palo Alto:" explains Virtual 3D's Karram, who is quadrupling his staff to accommodate his company's rapid growth, "but a lot of young computer experts who are looking at jobs in northern California come here because they know they will get more for their dollar."
No one knows more about stretching a dollar than venture capitalists, and Dot-com Beach is full of them. helping to continue to make the area a perfect place for e-business startups.
"Venture capitalists looking to invest in the next big thing generally like to go where the opportunities are and where they can be close to their deals," explains Hiway Technologies/Verio president Scott Adams. "Well, you get one technology company here and they have venture capitalists and that draws other companies here, which then draws more investors to town. It's a cycle and suddenly, everyone is here."
Even the growing number of companies themselves are draws for new business, proof positive that success breeds success.
"With the technology infrastructure already in place, this area is perfect for a new technology company," explains Tradeology.com president Jay Patel, who left Chicago to start his new business in Boca Raton. "Do you need Web hosting? That company is down the hail. Telecommunication systems? They're around the corner. Software development? They're down the street. Whatever you need, it's all right here."
Finally, there is the college factor. Boca/Delray has a wealth of eager students from Florida Atlantic University and Lynn University, many of whom are studying to try to become the next Bill Gates.
"We don't have kids here who are just looking to answer phones at a quick five bucks an hour," says FAU Research Park's Ellington. "We have students who are serious about gaining experience in the next generation of science, technology and research. Companies see that and the value of this university interface and they want to be near that kind of energy and developing expertise."
The Future of Commerce
Dot-com Beach is hardly finished growing. Besides being a haven for new e-businesses that seem to arrive daily, Boca/Delray also has become a focal point for traditional retail companies' new shift toward e-shopping.
Delray Beach-based Office Depot's 2-year-old Web site already has reaped huge benefits, with Internet sales quadrupling in 1999 from the previous year to more than a quarter-billion dollars. Boca-based educational publisher SIRS Mandarin - a long-time strictly paper publisher - has increased its Web presence as well. And Delray-based Levenger, an upscale reading accessories company. has a Web shopping site that accounted for as much as a fifth of all sales during the e-critical winter holiday shopping season.
With all of this dot-com retail, will cyber shopping from your home eventually replace window shopping in Mizner Park or on Atlantic Avenue?
"I don't think that your traditional bricks-and-mortar retail will go away, but virtual shopping will continue to put a lot of pressure on stores to give the customer a lot more excitement and interactivity," says Steve Leveen, Levenger president and co-founder. "Right now, there are probably more retail stores than can be supported in light of what is sure to be the successful virtual-heavy world of the future."
But mall hoppers needn't despair, Leveen says. because this cyber shopping increase actually may benefit consumer retail by increasing the quality of bricks-and-mortar outlets.
"In this Internet world," he explains, "the physical stores that will survive will be the ones that can really pull you in. These will be the stores that offer something entertaining, compelling and educational that simply cannot be accomplished in the virtual world."
Businesses along Dot-corn Beach seem eager for the challenge.
"There is so much creative energy and intelligence being poured into making the virtual world as exciting as it possibly can be" Leveen enthuses. "It boggles the mind to think of the changes that will happen in the years to come.
Steve Leveen, President and Co-Founder, Levenger
What a delightful cyber irony: a company selling pen and paper in a way that requires neither. Such is e-commerce at Levenger.
“We are in the business of selling pictures and words,” explains Levenger President Steve Leveen, who founded the Delray Beach company a decade ago with wife Lori. “When we first saw a few years ago that the pictures could change and the words could come to life on a Web page, we knew that this was going to be the future of retail.”
No one can question the Leveens’ foresight, especially given their track record. The couple started Levenger — a name combining Steve’s last name with Granger, his wife’s maiden name — in their Boston-area condo, personally taking phone orders and warehousing stock in their den. Today, Levenger has grown into a multimillion dollar phenomenon, with hundreds of employees, a sparkling 140,000-square-feet. headquarters in Delray Beach, a superb Web shopping site, and a vision for the future.
“When done correctly, great Internet retail can be like an old-fashioned small-town merchant,” Leveen says. “It used to be that if the owner of a small town store saw you walking down the street, he’d stop you and say, ‘Hey, we just got some things that I know you’d like.’ Well, it may be the same in the virtual world. The virtual salesperson will know enough about you to help pick something that is just right for you.” Yet another goal for the Leveens in the fast-paced e-tailing industry.
“I would love for that to be us in the future,” Leveen says. “We’ll see. There are a lot of exciting changes sure to happen in the next decade.” — TC.
Fahri Diner, CEO and co-founder, Qtera, Boca Raton
When Qtera CEO and co-founder Fahri Diner gathers with his company’s Gen X executives around the corporate ping-pong table, it is hard to believe that this 2-year-old Boca tech firm may hold the key to the Internet’s future.
“We have a very relaxed atmosphere at Qtera,” says the 31-year-old head of the Boca Raton fiberoptics company, which recently was purchased by Nortel Networks for $3.2 billion. “Sure, this is a 24-hours-a-day, 7-days-a-week venture, but we still try to have fun.”
That work is the revolutionary development of new technologies that Diner says will allow data to travel along fiberoptic phone lines exponentially faster than existing capabilities, zipping the Web up to nearly real-time speed.
“When I sit down to my computer to surf the Web, I get very frustrated,” says Diner. “It is just so slow and unreliable. When you pick up the phone, almost every single time, you get a dial tone and your call goes through immediately. There is no reason why the Internet shouldn’t be the same way.”
Diner has been studying such matters since graduating with an electrical engineering degree from Florida Institute of Technology.
Today, after honing his skills at tech giants such as Siemens and Pirelli Cable, the Cyprus native appears to have reached the industry’s pinnacle. With the Nortel deal — a record for a start-up buy-out — still making Wall Street heads spin, Diner debuted part of Qtera’s revolutionary product last month at a major optics conference in Baltimore. And he insists that Qtera has only begun to build the perfect Internet mousetrap.
“People have been questioning and investigating this area of technology for years,” he says. “For us, it has just been a matter of putting together the best team and working until we found the solution.”
Chris Sarian, Owner, Blue Sky Technologies
Like many entrepreneurs, Chris Sarian was always looking for the next great business. Sure, the 34-year-old had success as a marketing executive in Boca Raton’s electronics industry — but he wanted more.
“A few years ago,” the Pennsylvania native picks up the story, “when my wife Lori and I developed software for another business that we had, we were introduced to the server-based computing model. Once I saw that technology, I knew that this was it.”
That technology is called ASP, or Application Service Provider. An ASP is essentially an application landlord, charging companies a monthly fee to rent use of “enterprise applications,” the massive software packages that handle data management, billing and other corporate tasks. Using custom-selected software through an Internet-accessible ASP, a company doesn’t have to install, upgrade and maintain its own version of this software, thereby saving time and money.
“Some experts are projecting the ASP model to be the next multibillion dollar business,” Sarian says. “Well, you know, that’s something that is really worth rolling the dice for and going after.”
It seems to have been a wise choice. Sarian may not have as much time as he’d like to enjoy his sports car hobbies, but the Boca businessman now is seeing the fruits ot his ASP work: Blue Sky Technologies is expanding to Colorado, where it will house a mirror server farm, and it continues to position itself right smack in the middle of one of the Web’s hottest new industries.
“In this business,” he explains, “more than anything, you need a desire to succeed. We’re proud of what we have done, but we’ve got much more to do.” — TC.