New Market for Security Software
ChildWatch Program Targeted at Parents
washingtonpost.com
By Sara Gebhardt
Washington Post Staff Writer
Wednesday, June 6, 2001; Page PW05
Pacel Corp. is one of a number of small technology companies in Northern Virginia that has toiled in relative obscurity, marshaling a bit of commercial business while it works on a niche technology -- in Pacel's case, computer security software.
Now Manassas-based Pacel is going after the home computer, hoping its batch of security software products will catch on among consumers as well as businesses. The seven-year-old, 30-person firm's shift from making security data systems for businesses to selling products in the retail market began this spring, when it offered its first consumer product for sale on Amazon.com.
And Pacel's ChildWatch Internet filter and home computer security software will be sold at retail outlets such as Sam's Club, Fry's Electronics and Office Depot in the coming weeks.
"It's been a long, tough transition, and it took a lot of investment without having steady income, but we're extremely excited," said David Calkins, Pacel's founder and chief executive.
Last year, the company spent $3.5 million -- most of it invested in product development, but its revenue was only $245,000. It posted a $3.3 million net loss. Calkins said Pacel hasn't concentrated on getting paying clients. The company's stock trades over the counter and sells for under $1 a share.
But Pacel's work has not gone unnoticed. ChildWatch attracted EarthLink as a partner for its retail launch, giving Pacel a strong brand to piggyback on. The company plans to co-market EarthLink's Internet access software with ChildWatch, which allows parents to monitor what their kids are doing on a home computer, filters out pornographic Web sites (and any others parents want to block) and provides security so that children cannot tamper with files, such as family financial information. "It allows parents to take control of their PC again because most of them can be out-programmed by their kids," Calkins said.
ChildWatch sells for $24.99, and a basic version of the program, ChildWatch Lite, will sell for $9.99. The EarthLink pitch is simple: Customers who buy ChildWatch will get three free months of EarthLink service.
Richard Bingler, Pacel's vice president of research and development, said it takes six to eight months to develop products such as ChildWatch and e-Centurion, a security program that breaks down macro-viruses, such as last year's Love Bug, before they attach to and disable a computer's files. If ChildWatch is successful, the company plans to sell E-Centurion in retail outlet stores.
But while it works on launching ChildWatch and developing E-Centurion, Pacel is still working on the data security applications the company was built on.
In January, the company was awarded a $40,000 follow-up contract by Prince William County to enhance its "JDH" automated information system, which tracks youths at the Juvenile Detention Home. Pacel will upgrade the system it created under the original contract in 2000. The software allows caregivers and others secure access to information about detainees, such as fingerprints, medical information and compatibility with other inmates.
Pacel's work on secure data access developed into broader computer security software -- stuff that protects personal information and monitors how computers are used.
Pacel -- an abbreviation for pace of excellence -- was launched in 1994 because "it was time for a change," Calkins said. Calkins was an executive at a McLean company undergoing a string of disruptive acquisitions when he left to start Pacel. He and his wife, Kay Calkins, started the business out of their Manassas home. Kay Calkins runs Pacel's Web development subsidiary, Ebstor Inc.
Calkins says he's the "business, marketing and financial person," and his wife, who ran a nuclear consulting firm, CMC Services, is the "technical expert" in the family."
The couple moved to Prince William County in the early 1990s from Tennessee, and basing their business there was an obvious choice. Calkins said the company benefits from proximity to Northern Virginia's high-tech community, and he enjoys Manassas's semi-rural feel. Calkins attributes the stability of the company, despite its heavy losses, to the low employee turnover.
"One of our offerings to our employees is that you can have a very casual, relaxed, peaceful workplace and still be in the area that is setting the pace for technology for the rest of the world," Calkins said.
Lisa Smith, Pacel's director of business development, agrees with Calkins. "We have very little turnover, and some of that is the quality of life being in Prince William. Certainly you don't want turnover when you're talking about programming staff because each new person wants to redo code and whole projects can be lost that way," Smith said.
By 1998, three years after its founding, the company had only five employees. It now occupies 8,200 square feet of office space on Rixlew Lane in Manassas.
With the county contract and new products in development, executives at Pacel have plans for more growth. Although the company's programmers are excited about launching the security products, Calkins remaines focused on the bigger picture. "We're looking at partnering with various ISP's [Internet service providers] and/or acquiring some," Calkins said.
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