Speaking With Socket’s Dr. Martin Levetin

Think of wireless and your mind may fill with images of sleek pocket phones operating over PCS networks and capable of transmitting data as easily as the crystal-clear rendition of your voice. These images are enticing, but they’re far from representative of the world of wireless as it exists in the United States today. In the more down-to-earth world of personal and business communication, paging remains king of the hill.

“Certainly we expect to see wireless grow in ’97, and I think by the ’98 to ’99 time frame, wireless is going to be the dominant business at Socket.”

But the world of paging is changing. Newer protocols offer larger message capabilities along with two-way data transfer. Add to this the new generation of handheld PCs and the integration between the two seems to be a natural. Newark, California-based Socket Communications is an early pioneer in this field, offering the best of both worlds: a full-featured stand-alone pager in a PC Card format that can also be tightly integrated with a handheld PC or PDA for more advanced message handling.

Recently, I had the pleasure of speaking with Dr. Martin Levetin, President and CEO of Socket at the company’s head office. Dr. Levetin’s background in wireless data offers him an advantageous perspective from which to view the course of the industry and direct Socket’s response.

A Bit of Background

Asked to describe his background, Levetin started: “I joined Socket in March of 1996. Prior to that, I had been with a company called RAM Mobile Data for 5 years. I joined Socket principally because I thought that the company had the technology and the opportunity in wireless mobile computing which would permit it to be a key player in the industry.”

“Being with RAM earlier, I guess you could describe me as one of the pioneers of the wireless data industry. I was involved on both the vertical side—helping to build the vertical business in a number of different markets including field service, transportation, etc.— along with being involved in the first few attempts at creating a horizontal and mobile professional market.”

“Prior to joining RAM, I had been with AT&T for 22 years, about 10 of those years on the technology side in the lab and the rest on the marketing and sales side, mostly with AT&T International. I spent two years in the Netherlands and was involved with a number of overseas ventures both in Europe and in the Far East.”

Turning to the company, Levetin painted the following portrait: “Socket was founded in 1992 and, at that time, focused on the PC Card business. It was one of the first companies to create a PC card version of an Ethernet adaptor. Subsequent to that, Socket introduced a number of PC Card-based products including a serial interface card and a GPS card.”

“Then in 1994, for reasons having to do the growth of the wireless industry, Socket determined that it would begin on a strategic basis to focus increasingly on the wireless industry. In fact, the company has spent the last two years, 1994 to 1996, investing in what I would call the wireless infrastructure, that is to say, putting all the pieces in place so that wireless solutions can in fact be delivered to end users on a user-friendly, non-technical, and seamless basis.”

Wired vs. Wireless

Levetin describes Socket’s business today as focused on the development and selling of connection solutions for mobile computing. He expanded: “Within this, we have two categories of business: wired solutions and wireless solutions. Today the wired business constitutes the majority of our revenue stream. I would say in excess of 80 percent of our revenues today are related to wired products.”

“But going forward, we’re looking to wireless to take over and become the largest portion of our business. Certainly we expect to see wireless grow in ’97, and I think by the ’98 to ’99 time frame, wireless is going to be the dominant business at Socket. In the meantime, there is a technology connection between the two businesses which I think we can leverage.”

Levetin stepped back for a moment to finish describing the wired portion of the business. “We continue to provide a solution for those looking for Ethernet PC cards. We have also extended our serial card family this year, having introduced four new products at Fall COMDEX, including a dual port version of our serial card, a ruggedized version of the serial card, a serial/Ethernet card, and a serial infrared card so that you can plug in a serial card and have an infrared link connected to it.”

“The other thing we announced was that we had reduced the power consumption of our serial cards by roughly 50 percent. That far and away makes Socket’s serial cards the ones that draw the least power from any mobile computing platform.”

Levetin summarized by noting that they continue to expand their wired business but anticipate the greatest growth to come in wireless. He added: “I would say that the wired business is a tactical opportunity for us. The strategic opportunity is the wireless business.” Levetin also revealed that among their wired products, about 60 percent are sold within the domestic market with the remaining 40 percent sold internationally through a series of distribution channels including resellers in countries such as the UK, France, Germany, the Netherlands, Australia, Canada, and Japan.

On the wireless side, the focus has solidly been in the US, with some initial activity outside of the States, most notably through an arrangement with Bell Mobility in Canada, Hutchison Telecom in the UK, and France Telecom. Levetin added: “Of course, in the US, our primary relationship is through the GTE strategic partnership.”

A Question of Coverage

“Paging is familiar to people. They understand it. Paging is the wireless communications capability of choice.”

Within wireless, Socket has consciously selected paging as the technology on which to concentrate their development and marketing efforts. When asked why, Levetin answered in a single word: coverage. Expanding on this, he added: “In the wireless business, coverage is everything. And paging has the best coverage or profile of any of the one-way or two-way networks, both in terms of scope—the so-called footprint—and also in terms of the penetration inside of buildings.”

“In addition, paging is familiar to people. They understand it. Paging is the wireless communications capability of choice. That’s why we have roughly 40 million paging subscribers in the US today. So, we selected paging for that reason.”

Moving to a more concrete example, he noted: “If you look at the two-way wireless data networks, such as RAM, ARDIS, or CDPD, you have two problems that you’re facing in trying to deliver a solution to a customer. First, you need to be able to provide this capability to all of their businesses field personnel. But if you look at the coverage footprint of RAM or ARDIS, you generally discover that you’re only able to cover 70 or so percent of the areas where the companies are operating.”

“The other 30 percent is a problem because you don’t want to split your work force into two separate components, one that’s wirelessly-connected and the other that’s not. So paging’s footprint, by itself, offers the ability to deal with that issue. The question of in-building coverage is also an important ingredient. If you’re a stockbroker and you want to get information about the latest changes in the stock market, you want to be able to get those messages even if you’re inside a building, eating in a restaurant, or just sitting at home.”

“Therefore, if you’re a field service person, somewhere inside a building fixing a computer, you want to be able to get that message whether you’re in the elevator shaft, or whether you’re standing in the doorway.”

While stressing the primary importance of coverage, Levetin also noted the significance of economics. He observed: “You’re always looking for a networking capability that will allow you to send data at a reasonable cost, and typically, you want to send data in the order of a hundred thousand characters or so in any given period, such as a month.”

“When you’re dealing with paging networks—such as the GTE arrangement that we offer for example—$29.95 per month provides a customer with a hundred thousand characters for that month and, in addition, allows them to include in that price the cost of the device. So the cost of the service and the cost of the device are relatively important. Paging provides a very affordable option when both are added together.”

The Great One-Way, Two-Way Debate

“In the short term, the combination of one-way paging and synchronization with handheld computers is, in our view, the ideal communications solution.”

If you take a look at the world of paging today, perhaps one of the hottest debates centers around whether people are interested in switching from their predominantly one-way systems to two-way paging. Levetin shared his insights into this question: “Naturally, in an ideal world, two-way would certainly be the kind of communication that people would prefer. But as everything else in this world, there’s a trade-off.”

“If you ask people what their interest is in terms of communicating when they’re out of the office, you’ll discover they’d like to be able to acknowledge the receipt of some information. But there’s another thing that’s just as interesting and that’s the synchronization model where you download or synchronize most of the information in the morning or the evening, and have information sent out to you from the office during the in-between times.”

“In the short term, the combination of one-way paging and synchronization with handheld computers is, in our view, the ideal communications solution. However, there will be a migration to the ability to acknowledge the receipt of messages as the paging infrastructure reaches the point where that is possible on extended basis. Remember that coverage is very important. You want to work in a world in which you have two-way coverage with the same footprint as one-way coverage. And that’s still coming.”

Levetin acknowledged that the company is working on two-way solutions. This includes looking at Motorola’s Reflex family of protocols along with AT&T’s PACT (Personal Air Communications Technology). Reflex-based systems, such as SkyTel’s nationwide offering, has an early lead but PACT, based on an open-standards architecture, doesn’t require licensing fees. Also PACT offers a symmetric messaging architecture, which means that the send and receive rates are the same, unlike Reflex.

Levetin noted: “PACT certainly hasn’t had the advocacy or the prominence that the Reflex protocol has enjoyed, but it’s out there. And then, of course, there are some other technologies such as creating a reverse channel using something in the unlicensed band. There are a number of two-way solutions out there that we’re looking at, but I would have to say that the Reflex protocol is probably the most obvious candidate for a two-way solution.”

From Protocols to Chips

Turning the attention to chip sets used to implement these protocols, Levetin offered some background. “Certainly, there are chip sets available for Reflex. Socket’s present products, however, work on the existing, fully deployed POCSAG [Post Office Code Standardization Advisory Group] network. It was invented a number of years ago, actually by the British post office.”

“The next set of protocols for which chips are currently available are for the one-way Flex protocols which afford a higher speed, and hence, are more attractive. Socket is presently engaged in developing devices for Flex networks. Further out, there are chips for the two-way protocols: Reflex 25 and Reflex 50. Socket is looking at those today and we’re in a process of making a decision about what is the right two-way protocol to select.”

“So in terms of timing, our view is that present solutions are based on POCSAG, next generation solutions in the 1997 time frame will be Flex, and for 1998 and beyond we’re looking at two-way paging and we haven’t made the final decision with respect to which solution we’re going to choose. But we’re actively engaged in that because we do need to make a decision.”

What the Customer Wants

Levetin feels that Socket’s timing is on-track with what customers are requesting. He noted: “There is some interest in two-way, but at the moment, we are not getting a lot of requests for two-way communications. We see the two-way issue as something that we need to be working on, but there isn’t a lot of strong interest at the moment either from the customers nor from our partners in two-way. I think we need to wait another 12 to 15 months to see how the infrastructure begins to get deployed.”

To illustrate his point, Levetin offered a snapshot of the current situation: “Today, in terms of the composition of the existing paging user base, about 10% of paging is alphanumeric. Most messages are on the order of 250 characters long, so most of these people are basically getting phone numbers sent to them.”

Receiving longer messages requires a bit more technology, however, since the message is going to arrive split up and will require reassembly at the receiving end. In network terminolgy, what’s required is a transport level protocol to provide a sense of order to the over-the-air transmissions.

“There is some interest in two-way, but at the moment, we are not getting a lot of requests for two-way communications.”

Levetin characterized all of this as an industry move to larger capacity networks which offers better priced per unit transmission. In the process, Levetin believes that the majority of messages will go from the 15-20 characters today to 250 to 1-2,000 character messages over time. Levetin noted: “The Yankee Group recently issued a report in which they projected that alphanumeric paging was going to grow from say 10 percent of the user base to about 40 percent over the next five or so years.”

“The Yankee Group was also projecting that about one-fourth of that 40 percent of users were interested in connecting their pagers to whatever portable computing device they were carrying around. They would like to be able to connect their computer to their pager to be able to save messages, to read them on a larger screen, and to incorporate the information into their databases. The second thing they’d like is to have the ability to acknowledge those messages.”

“So we see a world in which there’s a growing base of people interested in longer messages—alphanumeric paging—and a significant fraction of these people are going to be interested in receiving those messages with their handheld portable computers. That’s really the market that Socket is going after and intends to capitalize on.”

Building the Technology Infrastructure

One of Socket’s main contributions to enhancing the wireless architecture and building the infrastructure is an open protocol called Page Descriptor Footer, or PDF. Levetin began describing PDF and some of its characteristics by explaining its context within the current suite of paging protocols: “The [Motorola] Flex protocol addresses the issue of getting more capacity into the networks, but the PDF protocol offers the essential connection-oriented communications capabilities needed for longer messages.”

“Basically, Flex is a connectionless protocol that sends one packet at a time. In fact, if you look at any of the wireless data networks including RAM, ARDIS, and CDPD—as well as Flex—they’re all connectionless operating at the Network layer of the OSI Reference Model. Therefore, any set of protocols that allow you to reassemble these packets is essentially something that needs to get done in the software.”

“Application developers are very uncomfortable dealing with lower-level protocols.”

Continuing, he noted: “This is the value we add. And I think there’s something very important to be said here about the nature of the software that’s required to create applications, because we’re really talking about applications in which customers are interested. Customers don’t care about packets, and they don’t care about protocols. What they really care about are the applications that make their businesses more efficient. And the question that Socket has been addressing is how to facilitate connecting these end-user applications to the networks.”

“We had spent the last two years working on infrastructure-related issues, infrastructure in the sense of systems that make it easier to create wireless-aware programs. You do that by creating an application programming interface [API] and, more importantly, a protocol stack and software developer’s kit [SDK] that allows you to write applications or, at least, take the information in applications and restructure it so that you can send it reliably and efficiently over a paging network. Socket has produced such a software developer’s kit.”

Levetin explained that the SDK has been available since December, 1995, and has already served as the base for a number of wireless-enabled applications. He added: “The SDK is built around a higher level of the programming interface, the model of the so-called AT command set. So anyone who’s used to programming in a standard communications environment using something liked wired LAN modems will find this interface very familiar.”

He observed: “Application developers are very uncomfortable dealing with lower-level protocols—the plumbing, so to speak. And so, the higher up and more familiar you can make the API, the better off you are. The SDK permits people to program applications in Windows, Windows 95, and Windows CE. In addition, we’re also capable of providing that capability on the Newton platform as well and on the HPLX [Hewlett-Packard].”

“With regard to the SDK again, in addition to making the programming interface familiar and easy to use, there’s a second issue that needs to be dealt with and that is permitting multiple applications to be handled simultaneously. What do I mean by that? Suppose you’re a salesman and you’re outside of the office using the ACT! contact management system. Socket has created a product called PageSoft for ACT! which allows you to send ACT! messages over the paging network to someone on a remote computer.”

“We did that using our software developer’s kit, and here’s the key point. Suppose you’re in the middle of receiving an ACT! contact record, which could consist of one or two pages, and an another person quite unrelated to this application picks up the phone and dictates a message that they want sent to you. When this happens, the packet containing the page could arrive in between two other packets containing the ACT! contact record.”

“The software developer’s kit and the software residing in the remote computer needs to be able to discriminate which packet belongs to which application and route the packet to the appropriate software program. It permits application concurrency, which is the technical jargon, and that’s a rather unique feature in this industry. People have been struggling with the application concurrency issue for several years, and I think you could say that Socket is by far and away ahead of everybody else in providing that sort of capability to its customers and applications.”

Putting it All in One Box

One of the more interesting marketing challenges facing the wireless industry today is creating a one-stop shopping experience by which users can acquire the radio (or pager), the associated software, and subscribe to the service, all from within one box. Levetin has a clear understanding of the value inherent in such an arrangement, noting: “If you’re buying a six or seven hundred dollar handheld computer, you don’t want to spend another five hundred dollars to stick a wireless modem in it. This is especially so if you’re looking at a thousand person sales force or something; then you’re looking to add another half a million or a million dollars in capital investment and that’s not a terribly attractive offering.”

“What you would really like to do is to be able to buy the handheld computing devices and to include the cost of the modem in the service, basically the cellular model if you will. And that’s exactly what GTE has done. For $29.95 per month, you get the Socket PageCard along with a hundred thousand characters of data that you can receive. That’s the value that GTE brings to the table in addition to the fact that they have their own corporate sales force that’s out there.”

Levetin continued: “This is very attractive in horizontal and consumer markets because you have a package that essentially shrink-wrapped, and about which an individual can make a purchase decision without reference to the corporate hierarchy. This is what we have done by working together with Casio and GTE to create a mobile professional offering.”

“This means that when you buy the Casio Cassiopeia, as an example, you open the box and inside you discover an ad from Socket/GTE directing you to call GTE at their 1-800 number to order the monthly service. This gets you the Socket PageCard included in the $29.95 offer. In addition, inside the Casio box, you get a CD-ROM on which you’ll find Socket’s software enabling the Cassiopeia to establish the receive end.”

“You’ll also find software that you can load on to your desktop computer from which you can send pages. So as a mobile professional, all you need to do if you’ve decided to buy the Cassiopeia is open it up, load the software on your desktop and Casio, call up GTE, and you’re in business.”

“The Windows CE platform affords the opportunity to have a common platform across a number of manufacturers’ products.”

Levetin quickly added that the solution works with any of the Windows CE platforms, including Compaq, NEC, etc. He observed: “We just haven’t done that sort of a distribution deal with anyone other than Casio. We are working with Compaq, however, on more corporate sales. If you go to the Compaq’s Web site, for example, you’ll discover that Socket is referenced there.”

Handhelds From a Wireless Perspective

Levetin is naturally enthusiastic about the future of handheld PCs and PDAs, though he notes that Socket has focused its attention on three major platforms: Newton, HPLX, and most recently Windows CE. He predicted: “Any of the Windows CE devices, we think, are critical drivers to make this market a lot bigger in the future, along with the Newton. There are other manufacturers out there who have platforms that are intriguing, I’m thinking of Psion for example, but they don’t have a PCMCIA slot which I think is an issue.”

“The Windows CE platform affords the opportunity to have a common platform across a number of manufacturers’ products, the lack of which I think has been an inhibitor in the past. You don’t want to have to build the same application for seven different platforms. As for Pilot, in my view, if it had a paging option it would make that product a lot more interesting to a number of people.”

Dr. Martin Levetin
President & CEO
Socket Communications, Inc.
37400 Central Court
Newark, CA 94560
1-510-744-2700
1-510-744-2727 (fax)
www.socketcom.com