Good advice is paying off

Net developer steers software company away from becoming an ISP

Jeff Bounds, Staff Writer

ADDISON -- The year was 1994, and Integrated Concepts Inc. was at a crossroads -- and about to take the wrong path.

Since its birth in 1990, the Dallas concern had focused on helping big customers in the medical industry integrate their old and new computer systems. But with the Web coming into prominence, Integrated's owners were thinking about changing the company into an Internet services provider, or ISP.

But then at a conference, they ran into Dr. Erik Metalla, at the time the associate dean of engineering at The University of Texas at Austin. Metalla gave them some advice: Don't become an ISP.

The reason: Within a few years, ISPs would essentially be supplying a commodity.

Metalla told Integrated execs they should instead focus on building applications that run on or in connection with the Internet. He was in a position to know. For years, he'd had a hand in the Net's development while holding a senior position at the Defense Advanced Research Projects Agency, which helped build the network in the first place.

As someone once said, it was the beginning of a beautiful friendship. Today, Metalla is spearheading Integrated's shift to making software for monitoring and responding to what is known in electronic commerce as "transaction failures." That's a fancy term for a technical glitch that prevents an online purchase from getting consummated.

"His greatest advice was, `don't go down the road of becoming an ISP,' " says chief executive Rusty Miller, who co-founded Integrated with current President Chris Russell.

Integrated's software helps track transactions, handling chores like making sure that a customer's purchase request has gone through the right technical channels. It also lets customers react quickly to problems and audit their transaction-failure rates.

The product suite tackles a thorny problem in electronic commerce. Projections on growth rates for so-called e-commerce range all over the map, but analysts generally agree it will be huge.

But the fly in the ointment is that customers, once burned by a bad experience at a Web site, are unlikely to go back. Some observers have suggested that some sites will get torched this Christmas because they won't be able to keep up with demand.

But while Integrated's chosen market is big, winning a big chunk won't be easy. Lurking in it are 800-pound gorillas like Microsoft and IBM, along with smaller, but potent, players.

Integrated officials contend their product is the most well-rounded of anything out there. Miller says Integrated's software can be managed easily, handle big influxes in traffic to a site and can be readily integrated into a customer's other systems.

The proof will be in the pudding. Integrated started developing the software in April 1998 and unveiled it at a trade show in New Orleans last July. Since then, the company has signed up 10 customers, including Liquidgolf.com, an Orlando, Fla., online seller of gear and apparel for the links.

Though it is building an internal sales force, a key part of Integrated's efforts to push its products will be through resellers. Among those it has signed up so far are Dallas-based Compucom Systems, Candle Corp. and evesta.com.

The sales push will truly get under way in the first quarter of next year. To help prepare, the company expects to hire 30 to 40 people in the next three or four months. Within a year, officials expect the company's 85-person work force to double, with many of the newcomers being software developers.

Integrated had sales of $12.4 million in 1998, up from $5.9 million in 1997.

Dallas Business Journal, November 8, 1999