A Conversation with PenRight!’s David Marino

Many dream of the massive, essentially untapped, consumer market for handheld, pen-based devices. In pursuing this goal, some have bypassed a number of smaller, more industry-specific opportunities, perhaps because the potential returns are, by definition, smaller. Fremont, California-based PenRight! Corp. is not one of these companies.

By focusing on specialized vertical markets, PenRight! Corp. has carved out a sizeable piece of the present-day pen computing market, while at the same time working on establishing an even broader presence. Recently, we had the pleasure to speak with David Marino, PenRight!’s newly appointed president and long-time proponent.

Sitting in with Marino was Chris Temple, a PenRight! account manager, who occasionally added his insight and information to the discussion. Together with Marino, Temple has manned the frontline of pen computing, working closely with developers and implementors to seed PenRight!’s brand of mobile computing in several industries.

Sales-Oriented Experience

Right from the start, Marino’s career centered solidly around sales. From his start as a purchasing agent at a large engineering firm, to his experience in telemarketing at the mobile computing pioneer GRiD Systems, Marino learned the language of negotiation, contracts, sales presentations, and customer relations.

From there, Marino moved through GRiD’s sales organization selling support contracts and working within the national accounts department. Marino credits the innovative spirit at GRiD in building his experience in mobile computing. He recalled: “That was GRiD’s forte initially, laptop computers. When Jeff Hawkins and Ken Delaney introduced the concept of pen computing in 1989, that strength expanded to include pen computing as well.”

Customer Driven

Marino explained GRiD’s motivation in creating much of the early pen computing industry: “GRiD’s expertise in the market was creating products that their customer base asked for. There were a couple of major consumer goods companies that had approached GRiD describing problems with certain types of people which they called walking workers, or mobile field data collection people. While they liked laptops, it seemed completely inappropriate for someone walking around in a store, doing inventory checking, to have a laptop balanced on their arm trying to type information.”

Marino explained that the early adopters wanted it all: “They were looking for a type of computer that a person could write on and have it recognize your writing; one that could do sales order forms and signature collection. So Ken Delany worked on the hardware, Jeff Hawkins worked on the handwriting algorithm, and after about two years of work, came up with the first GRiD Pad.

“And that’s where PenRight! got its start, it was the development tool that GRiD had created internally to allow companies to build applications with very low overhead running on an 8086 with a memory card of 512 KB. And the reason they used those factors was to allow a person to have eight hours of battery life on a pen-based unit.”

Selling the Technology

During these early days, everyone was trying to get a handle on pen computing, including Marino. He recalled: “I was a sales person at the Santa Clara office, and had been selling primarily laptops for about two and half years. I think everyone was trying to understand pen computing. I didn’t quite understand where this market was, or where the opportunities existed.”

After meeting with several of his key customers, Marino quickly learned that many were having trouble with data collection, especially when the information was time critical or was being complicated by other sets of circumstances. He also spotted some interesting contrasts. He noted: “The east and west coast [of the United States] were very different. The west coast had some very high-tech companies, while the east coast and the midwest had more consumer goods and pharmaceutical companies.”

Marino described how west coast companies were obsessed with “speed and feeds,” the speed of the processor and the amount of data the device could handle. “Those were the types of questions that the technical engineers were asking because they had laptop computers and were computer literate. In contrast, the east coast looked at pen computing and were interested in the ability to quickly and easily capture information, for use with people that currently were not using computers, or did not want to use computers.”

For example, Marino described an early pharmaceutical application that involved filling out order forms, quantities, and most importantly, when the company left a sample of a drug, capturing a signature. Marino explained: “It just so happened that at that same time period, the government had passed a law requiring a pharmaceutical company leaving a drug sample with a hospital to have a record of where the sample was being left.”

“So the pharmaceutical company used a pen computer with checkoff boxes, along with signatures that were date and time stamped. They indicated that this was the process they were going to use for fulfilling the government’s tracking requirement and the government said that it was fine.”

A Clean Technology

While Marino describes much of his early days in pen computing as “missionary selling” since the technology required a fair amount of explanation, he did find some nice fitting niches. “There’s a market that you don’t see across the country, namely clean rooms. If you were to walk into a clean room, let’s say a $200 million facility, you would notice that they have something called clean room paper. And this clean room paper, although it’s of higher quality that standard paper, still has an emission of particles and contaminants.”

Marino explained: “And that’s where, as a sales rep, you scratch your head based on the territory within which you work to try to find opportunities. In the case of clean rooms, payback from pen computing was phenomenally quick…a matter of days.”

Shifting to Software

As PenRight! gained in popularity, GRiD made the strategic decision to license the system to other hardware vendors. Marino recalled: “I went into the software side and my responsibility was to bring the hardware companies on board. At that time, we had three companies reselling PenRight!: GRiD Systems, which was the parent company, Fujitsu, and NCR which is now AT&T GIS.”

By this time, PenRight! had already established itself among vertical industry developers and had achieved an unparalleled following. Marino explained: “When we came in, we presented the fact that we had an incredible installed base. We probably had, at that time, 70 to 80 percent of the pen-based implementations within corporate companies.”

Chris Temple added: “At this point, around 1991, the developer community had risen to about eight hundred, including ISVs, and VARs. As you can imagine, with that number of companies developing applications, how many applications were actually created. That was a huge resource for an OEM.”

Marino continued: “Our positioning [to the OEM] was that we already had an installed base of developers with applications that were ready to ship. If they waited for GO’s solution, or for a Windows solution, they may have to wait another six months to a year—and they had requirements to ship hardware. So they were immediately switching over to supporting our product as well.”

Overcoming the Hype

Around this time, pen computing was beginning to experience it first wave of popularity—the second would come with the introduction of the Apple Newton. Hand in hand with this popularity came the hype and undeliverable expectations that would later come to haunt the industry.

Marino was right in the middle of this. “The difficult part was that, although they weren’t shipping, the perceived hype in the industry was that GO had a development tool that had been built from the ground up for the pen environment. It was frustrating because they weren’t shipping. But with the amount of advertising and hype that they received, everyone was waiting for this new technology to come.”

Marino summarized what sadly came to be: “It was going to be the next grand tool for the pen environment. And as we all know, they had some difficulty getting the product to market—the applications from a development side were difficult to produce, and it was a proprietary environment. After it was on the market for a year and a half to two years, the market determined that it wasn’t the tool they were looking for. And it kind of slowly went away.”

In addition to its installed base, Marino had another ace up his sleeve with PenRight!. He explained: “The only barrier to entry for a company was that they had to run a version of DOS 3.3 or higher. The other thing that they had to do was create the pen driver, which was simple. Typically, it would take anywhere from a week to two weeks.”

A Maturing Industry

Since its inception, pen computing has grown in both scope and ambition. During this time, Marino and Temple both have seen the evolution of how PenRight! is being deployed in a number of companies. Temple elaborated: “We’ve seen a maturation of the type of corporate developer using our products to create solutions. The overall sophistication and caliber of the developer has gone up tremendously. For example, in our upcoming catalog, we have the likes of EDS, PRC, and other large Fortune 1000 corporate integrators.”

Temple continued: “In the early days, corporate developers were a little hesitant because they didn’t understand the technology. A number of these people were turning to the ISVs who were specializing in that particular industry. However, as more applications have come out from those ISVs, the payback has proven itself and the corporate end user has understood that the technology has become more mainstream. In many cases, they have put together the resources internally to start application groups inside the corporation.”

“Handwriting is not where you can give it to your co-workers, have them write memos, and then take it to a printer for output. This general principle is true with any computer system…understand where the product fits and then go after the market appropriate to that tool or hardware platform.”

Despite this increased sophistication, Marino offered some valuable advice to companies considering starting an internal pen development effort for their first project. “Although a company may have an understanding of C development, we normally suggest that before they start developing pen applications, they may want to partner with an ISV for their first application. This is simply because if you were to create a spreadsheet today, not having seen a [Microsoft] Excel, do you as a developer truly believe that you would add in all the functionality that Excel has today? And the answer would be no.”

Marino elaborated: “You would absolutely have the capability, but there is a learning process for what things work and don’t work. It’s not that you’re not capable of developing the application, it’s just that you haven’t the experience or seen the other applications that have been created to understand all the capabilities, including look and feel, of these applications.”

“The ISVs that have been in this business for the past six or seven years have gone through this trial and error, and understand what works and what doesn’t. But we do have major corporations that are now picking up this technology and building applications on their own. We supply them with samples so that they broaden their horizons about what pen computing can do.”

Sophisticated Corporations

With the popularity of fourth generation languages, and the days of COBOL programming not too long past, do C-level tools provide the right fit within the mainstream corporate environment? Temple responded in the affirmative. “We see, thankfully so, a good background in C. And PenRight! was based on C from the beginning.”

A similar sophistication has taken hold with respect to the expectations of pen computing and, in particular, handwriting recognition. Marino outlined his observations by saying: “People now understand that handwriting recognition is good and is improving each year. However, handwriting is not where you can give it to your co-workers, have them write memos, and then take it to a printer for output. This general principle is true with any computer system—understand where the product fits and then go after the market appropriate to that tool or hardware platform.”

Marino continued: “Initially C, as a development tool, was considered to be something that companies didn’t want to use. So they tried using fourth generation tools or working in proprietary environments. I’m a strong believer that if there’s a fourth generation tool that works specifically for your task, that’s a good fit. However, if you try to stretch that tool beyond what it was initially designed for, like any tool, it’s not a good fit.”

Marino emphasized the strength of being C-based: “Now that C has become more mainstream—there are third party products featuring wireless communication, mainframe connectivity, TCP/IP, as well as other existing C libraries. It’s come back into favor throughout and people want to develop in C.”

The Magical ROI

Within the vertical industries, perhaps no term is as revered as the magical return on investment (ROI). And for good reason. When targeting a new industry, or presenting to a new client, calculating a reasonable estimate for the ROI is a critical task. Marino explained how they’ve managed to tackle this issue: “Fortunately we have been in the market long enough where we can actually refer clients to other customers.”

“We have enough utility customers like Central Hudson, Pacific Gas & Electric, and Southern California Edison, that we can refer utility companies to utility companies, pharmaceutical companies to pharmaceutical companies and so on. The part that becomes a little difficult is if they are competitors.”

Temple added: “For example, ConRail first started doing work order process forms. They started an application four years ago with a pen computer on a locomotive, wirelessly hooked to their back-end system at their customer service department, using RAM Mobile Data.”

Temple continued: “That application has now turned into an enterprise-wide system throughout the corporation. They have also added other functions including an accounting application, an email application, and it keeps growing. They keep adding features to the system making the payback increase even more for the company.”

From PDA to Light Pen

By supporting a broad range of platforms, PenRight! has helped companies leverage their computing investment, while also making for some unexpected hit applications. Temple outlined the current lineup of pen-based platforms supporting PenRight!: “I think the Casio Zoomer is the smallest platform, in terms of processor and physical size, while the fastest would be Fujitsu’s Stylistic 500 in the tablet form factor. Taken to an extreme, our software runs on Pentium desktop systems, with a mouse or light pen capability, along with some of the newer 100 MHz laptops.”

Why would someone use PenRight! on a desktop platform, Pentium or otherwise? Marino surprised us by replying: “That’s an interesting phenomenon. The desktops are something that a couple of insurance companies are starting to utilize—one specifically for reviewing information on a resume.”

“This company has a large desktop-based system for screening applicants. Since many of these people are not computer users, they have standardized the entire review process on the desktop using FTG’s light pens. They have automated the entire process and its been very successful for them.”

Telxon Acts Quickly

As you’ll recall, PenRight! Corp. is currently a wholly-owned subsidiary of Akron, Ohio-based Telxon Corporation. Marino offered a candid, behind-the-scenes, explanation of the situation leading up to the acquisition, and then the acquisition itself.

Marino began: “That was an interesting scenario. Before Telxon acquired us, we were part of GRiD Systems, and GRiD was sold to Tandy. Tandy was in this business, as owner of GRiD, for about two and a half to three years. Then, a couple of analysts realized that Tandy’s desktop computer market wasn’t a good fit for the retail giant—that they didn’t know the computer industry as well they should.”

“The analysts recommendation to Tandy was to sell it off. At that same time, AST was growing tremendously and needed more manufacturing capability. So AST made an arrangement with Tandy to acquire three of their facilities, as well as, manufacture the desktop computers for Tandy Corporation. In the process, AST acquired GRiD and PenRight! and I think it lasted about one year.”

“AST quickly realized that they really didn’t understand vertical and field automation sales, which was GRiD’s business. So they sold off PenRight! to one of PenRight!’s larger customers: Telxon.

Marino was upbeat about the current situation: “From our perspective, it’s been a very good relationship. What Telxon brought to us was their understanding of the handheld market. Mike Hulthen, who, at the time, was president of PenRight!, had been in the software business with Telxon for 14 years and knew a great deal about Windows, OS/2 and every other development tool out there.”

“With that background, we were able to take our existing DOS applications and finalize our Windows strategy to allow all existing applications from DOS to port into our new Windows tool. In my opinion, without that expertise, that product would not be as strong as it is today.”

Marino also described the speed at which Telxon was able to act. “It was very quick. I think we contacted Telxon, who at that time was already very familiar with our product, on a Tuesday or a Wednesday and I think they notified us on a Friday or a Monday that they were going to purchase us. We were surprised that they had reacted that quickly. AST’s decision to sell was based on the honest realization that, after six months, they did not know the pen market.

“It was very quick. I think we contacted Telxon, who at that time was already very familiar with our product, on a Tuesday or a Wednesday and I think they notified us on a Friday or a Monday that they were going to purchase us.”

Growth Markets

Now that things have settled back to normal, Marino is more than bullish about the future of pen computing, the growth of new markets, and PenRight!’s position within it all. In particular, Marino sees wireless communication as perhaps one of the hottest prospects in the next few years. He identifies the advantage of being able to: “link in C libraries for services such as RAM Mobile Data, ARDIS, CDPD, spread spectrum technology, and even infrared communication from the desktop to handheld devices. The local and wide area networks are all becoming very integral components.”

When asked about the number of new customers expressing interest in employing wireless communication in their application, Marino surprised us by replying: “I would say for corporations, it would be as high as 50 percent.”

Marino also noted that the health care industry has turned an important corner: “It looks like health care is finally taking this technology on for real—they’ve been talking about it for the last three to four years, and now there’s enough momentum that they all seem to be very excited about it.”

Marino summarized his enthusiasm for pen computing: “Over the last two or three years, if you had a rollout of 100 to 500 units, that was a large rollout. We’re currently working on several projects that are in excess of 10,000 units. They’ve already justified them, their board of directors are in their approval cycle, and it’s saving them money.”

Some of these companies will save anywhere from 8 to 10 million dollars from the way they are currently doing business. It makes business sense and they are better servicing their customers.”

PenRight! Corporation
David Marino
President
47358 Fremont Blvd.
Fremont, CA 94538
(510) 249-6900
(510) 249-6920 (fax)