Corrections or additions?
These articles were published in U.S. 1 Newspaper on July 14,
1999. All rights reserved.
‘Net Bill Paying: Paytrust
Flint Lane and Ed McLaughlin think they have the
answer to everyone’s paperwork dilemma. Just have all your bills sent
to your virtual bookkeeper, who scans them onto your personal web
page. Pay them whenever you want, or instruct your bookkeeper to pay
them for you. You don’t touch the bills, write the checks, or lick
the stamps, but if you want to review your accounts, all your bills
are on your web page. The service, called Paytrust, costs $7.95 per
month and is available now. A demonstration is at http://www.paytrust.com.
Both Lane (a 1988 Rensselaer graduate) and McLaughlin (Wharton, Class
of 1987) had worked at Logic Works. Last October, when Logic Works
was sold to Platinum Technologies, they started Secure Commerce Services.
In January they began testing the service, and June 29 they launched
it. Soon they will start billboard ads, radio ads, and direct mail.
The company now consists of 17 employees and has funding from AT&T
Ventures and Spectrum Equity. It will expand at Princeton Commerce
Center in September.
Banks are doing electronic banking, and other companies are offering
bill paying online, but McLaughlin and Lane claim that no other company
offers a service where the consumer can get all bills logged into
one private web page and never touch paper.
— Barbara Fox
fax, 609-720-1819. Http://www.paytrust.com.
Last week the Sarnoff Corporation sounded an alarm
that had long been silent — the layoff alert — and it cut
staff by nearly 10 percent. About 80 people — including a few
who were to retire anyway — will be leaving in mid August. These
cuts are supposed to boost the profit margin in Sarnoff’s core business:
contract research for other institutions and companies.
Contract research is certainly not the only card that Sarnoff plays.
It makes money from licensing new technologies and also from leveraging
other technologies to start, and get equity in, such venture companies
as Orchid Biocomputer, Delsys, and Sensar.
"This amounts to an attempt to make our core business stand on
its own," says spokesperson Tom Lento. "We took this as an
opportunity to set a new goal, to get a 10 percent return on revenues
in our core business by next March."
Such a high profit margin is unheard of at colleges and universities,
where most contract research takes place. "We are looking at a
whole industry in which the margins are actually quite low," says
Lento, pointing to the 2 to 3.5 percent margins typical of academic
"If we don’t have a strong core business, it will affect our ability
to do world class research," says Lento. "We decided we needed
to do not just better but a lot better. We didn’t want to be put in
this position again. Because of this shot across the bow, we decided
to take the action."
It was just 12 years ago that the Sarnoff Corporation heaved itself
out of a not-for-profit slough and turned down the for-profit road.
Facing the threat of being dismantled, Sarnoff took its legacy of
being a television pioneer and remade itself to be the for-profit
division of SRI International, a nonprofit research organization based
at Stanford University.
Virtually alone among its peers, it is a research organization that
survives without support from a parent company. Both NEC and Siemens,
which have laboratories in the Forrestal Center, are examples of supported
research. At academic institutions, research is buttressed by a superstructure
that absorbs such administrative costs as human resources and payroll,
and it also benefits from the "free labor" of graduate students.
These layoffs are not the first nor did they cut the deepest. Retooling
toward the self support goal, Sarnoff reduced its workforce from 1,250
to a low of 600, and it stabilized at 800 in 1997. Profitable since
1993, it set the goal of being a $1 billion company by 2005 (U.S.
1, April 7, 1997).
Because it is a privately held for-profit firm, Sarnoff does not release
complete financial statements, but it claimed to have revenues of
$130 million for 1998. Still, starting in November, it began to lose
About one-third of the cuts were from technical staff to emphasize
software development over hardware. James S. Crofton, the new chief
financial officer — Sarnoff’s first — participated in these
discussions with senior management and board members but did not instigate
the cuts, claims Lento.
Crofton directs financial and purchasing functions and is also responsible
for internal computer services. An alumnus of Michigan State with
an MBA from the University of Michigan, he has been chief financial
officer at EA Industries and spent more than 20 years at Unisys Corporation.
(Some background: Unisys had hardware as its strong suit. Partly because
its software was not at the same level, it lost market share in the
1980s and suffered drastic cuts.)
"He went through the fire at Unisys," says Lento. "He
was brought on because he could strengthen our financial condition."
Crofton was out of the office last week and could not be reached by
"Contract research in general is a cyclical business," says
Lento, "which is one of the reasons why we established the two
other business models (licensing its technology and claiming an equity
stake in spin-off companies). If there is a recession, contract research
goes down. We can track fairly closely what will happen 12 to 18 months
down the road. Lo and behold, the figures from 12 months ago did show
there would be problems in the future."
Perhaps contract research can be compared to the canaries in the coal
mines. When the oxygen supply dwindles, the canaries die first, signaling
the humans to leave the mine. If contract research is down, should
we worry about a recession? Lento thinks not: "It has more to
do with the nature of our business than the economy in general."
— Barbara Fox
James E. Carnes, president & CEO. 609-734-2000; fax, 609-734-2040.
Home page: http://www.sarnoff.com.
It’s not as though it’s the match box school of trucking
offering bachelors degrees, but DeVry Institute has raised academic
eyebrows nonetheless. It belongs to a relatively small group of "proprietary
institutions" — colleges that operate for profit — infiltrating
the elite world of higher education, where nonprofit and public institutions
have reigned for so long. In January, however, DeVry became the first
capitalist college to offer a bachelors degree program in New Jersey.
It’s now one of four schools in the state granting bachelors degrees
in electronics engineering technology. With an aggressive job placement
program, and tuition costs at a third of other schools, DeVry might
just be a force to be reckoned with in higher education.
For 14 years, DeVry has been offering non-traditional New Jersey students
— returning students, mostly — a range of practical, object-oriented
associate degree programs in everything from accounting to telecommunications.
Until now, the state’s Commission on Higher Education, which must
approve any institution seeking to move to the next level of degree-granting
status, had turned down DeVry’s application for a license to grant
bachelor degrees in the same programs. This reflects New Jersey’s
unusually high standards, says Beth Hyre, a spokesperson for DeVry,
rather than the school’s credentials. "New Jersey has always been
conservative and has very strict rules concerning post-secondary education,"
she says. "That’s just been its historic position." In fact,
DeVry’s bachelor has already been embraced at 16 other locations outside
of this state.
Despite opposition from the Council of Presidents, an advisory committee
comprised of college and university representatives, the commission
finally approved DeVry’s application for bachelors-degree granting
status in electronics engineering technology. The New Jersey Institute
of Technology in Newark was the primary objector, claiming a duplication
of its own program, only 40 miles away. Stevens Institute of Technology
in Hoboken and Fairleigh Dickinson in Teaneck offer the same programs
"Having three or four programs in the whole state is a pretty
low number," says Hyre. "We don’t receive taxpayer support,
but that’s secondary to the fact that we feel students should have
a range of options and a number of excellent programs to choose from."
Angela Suchanic, director of academic affairs at the commission, says
that because DeVry serves mostly commuting and returning students,
it demonstrated a real need for the program.
Even more significant is that DeVry passed the commission’s extremely
rigid licensing standards. The school offers 120 credit semester hours,
half of which are in general education, and has the required number
of full-time faculty members with PhDs. The library holdings are also
large enough to support a bachelors program. "We’re conservative
about approving anyone," says Suchanic. "The rules are the
same, whether you’re proprietary or not."
Unlike many public and private colleges and universities, the DeVry
program runs year-round, allowing students to complete an associates
degree in a year and a half, and a bachelors in three years. Each
four-month trimester costs approximately $3,500, and substantial financial
aid is available. At roughly $32,000 (excluding housing, meals, and
books), a complete bachelors degree at DeVry costs slightly more than
the bill for one year at a private four-year college.
Hyre lists even more compelling reasons to study at DeVry. "The
kind of education we deliver is hands-on and career oriented,"
she says. "Almost all our courses are labs." Indeed, the electronics
engineering technology degree is a very business-oriented engineering
program that emphasizes product development, technical writing, sales
and marketing skills, in addition to math and science. "Engineers
are basically conceptual, in that they develop an idea, but the electronics
engineering technologists translates that design into something that
makes it work," she says.
A proactive career counseling office also places 90 to 95 percent
of DeVry students with area employers such as Siemens, Packard, Zenith,
UPS and Unisys within just six months. The skills that DeVry teaches
are in great demand, says Hyre. "Given the climate in New Jersey,
where so many businesses aren’t able to expand because they don’t
have the trained workers, it becomes vital that they have the option
to become educated for these jobs," she says. "We felt that
it was really incumbent upon the state to move forward."
— Melinda Sherwood
Robert Bocchino, president. 732-435-4880; fax, 732-435-4856. Home
RCN placed in front of such industry notables as MCI/WorldCom, Teligent,
NextLink, and Sprint last month when it was named one of the nation’s
100 most dynamic telecommunications companies by Forbes ASAP magazine.
Just to prove how prominent RCN is becoming, consider CEO David McCourt’s
latest move: an alliance with Lycos Inc. Code-named "Lycos Lighting,"
the deal will give RCN’s half a million subscribers access to a personal
portal start page called "My Lycos" with personalized news,
weather, shopping, and E-Mail.
RCN, it seems, had been preparing to strike Internet gold all along.
The company’s trademarked True Local Network, a broadband fiber optic
platform capable of offering a full suite of communications services
including voice, video and high-speed Internet, was built specifically
to provide infrastructure for Internet-related services yet to come.
According to the company’s annual report, all of RCN’s customers combined
use only 20 percent of the network’s potential.
RCN is unique among major players in the telecommunications industry
because it offers service to residential consumers only. It targets
the densely populated areas between Boston and Washington D.C. that
comprise 40 percent of the nation’s residential communications market
in only 6 percent of its geography. RCN will soon launch facilities-based
services in the San Francisco and San Jose area using $2.5 billion
raised in part from Chase Securities Inc. and a public equity offering
led by Smith Barney and Merrill Lynch.
Although RCN stock has remained relatively stabile, the NASDAQ showed
a ten percent climb in the week of the announced alliance. Lycos stock
(LCOS) also gained.
— Melinda Sherwood
300, Princeton 08540. David C. McCourt, chairman and CEO. 609-734-3700;
fax, 609-734-7551. Home page: http://www.rcn.com.
with the Hibbert Group.
broker and parts manager at Quakerbridge Porsche/Audi.
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