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Technology Stocks : Ioptics: Microsoft-backed Start-Up

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To: ftth who wrote (4)3/21/1998 1:09:00 PM
From: Troy L. Hilsenroth   of 39
 
Here is an article on the founder

Smaller, Faster and Cheaper
CD-ROM
Inventor
Strikes Again

The market for OROM
storage promises to be
huge.

Web Links
James Russell bio
iopitcs home page

Revenge is sweet: James Russell's OROM data
storage technology may someday eliminate the need
for CD-ROM storage, which he also invented but
didn't make any money from. (Michael Dougan
Special to ABCNEWS.com)

Special to ABCNEWS.com
Let's say you're noodling around on
the MIT Web site and come across
the surprising discovery that the CD
and CD-ROM technology were
invented in the mid-1960s by an
American scientist named James
Russell. And let's say the first
question that pops into your mind is,
"What has Russell done for me
lately?" The answer is not, on
reflection, surprising-but it is
intriguing.
In 1990, Russell set up shop in the
Seattle suburbs and began working on a new
kind of data storage, now called OROM, for
Optical Read-Only Memory.
OROM stores data holographically-in
miniature plastic optical systems about half
the size of a business card-and reads the
data by shining tiny LEDs through the
OROM lenses. Each card stores 128 mb of
data, and since they slip into a card reader
with no moving parts, as there are in disk
drives, reading the data uses virtually no
power.

The Brains and Bucks Roll In
It has proven rather easy for Russell to sign
up a management and technical team and
round up money. (For some reason, having
invented the CD-ROM gives him credibility
with investors.) Microsoft, Polaris Venture
Partners, Britannia Ltd. and other investors
recently ponied up $9.5 million to productize
Russell's invention and get it to the market
by mid-1999. Russell also talked former
Hewlett-Packard general manager (and
former Tektronix VP) Fred L. Hanson into
becoming president and CEO of his
company, ioptics-or Information Optics.
The market for OROM storage promises
to be huge: everything, in Hanson's words,
"from embedded computing devices-things
like toasters with chips in them, which sell
around 100 million units per year-to
point-of-sale devices, industrial controls,
instruments, GPS navigators, handheld
games, portable entertainment devices,
handheld PC's." He envisions the day
when a company with a large sales force can
update presentations or inventory on
OROM chips, send them out in the field, and
have salespeople plug the cards into the
palmtop computers they use for filling orders
or doing updated PowerPoint presentations.
Portable CD and tape players can be
replaced by OROM-reading devices,
making them immune (since OROM has no
moving parts) to the jostling that comes with
walking, running or jumping around.

Doin' it Right the Second Time
'Round
But where OROM is likely to make the
biggest difference to you and me is in the
handheld and laptop computer markets,
where growth has been slowed in part by the
high cost and high power consumption of
memory-storage devices. Handheld
computers like the PalmPilot use MROM or
flash memory, which run in the
dollars-per-megabyte price range, while
OROM will cost approximately two cents
per megabyte. And the weight and power
consumption of laptops can be reduced by
anywhere from 20 percent to 80 percent by
transferring operating-system and interface
data from the hard drive, where it comprises
nearly 40 percent of the data stored on the
drive, to OROM cards. Eliminating the need
for hard drives to store read-only memory
allows manufacturers to install far smaller
and lighter and less power-hungry drives in
laptops, driving down their cost and driving
up their efficiency.
OROM is likely to make an even bigger
difference to the Sonys of the world, who
have made billions off of CD players.
I visited ioptics twice, hoping to meet
Russell, but was turned away the first time
and told he was out of town the second.
One of his engineers, though, noted that
Russell never earned any money off of his
CD-ROM patents. (It is axiomatic in the
software and computing hardware worlds
that businesspeople always figure out a way
to shoot the inventor.) "He's doing things
right this time around," the engineer said
admiringly. Then he pointed out that OROM
would someday eliminate the need for
CD-ROM storage. Revenge, I thought, is
sweet-especially when it takes 30 years or
so to exact it.

Fred Moody is author of I Sing the Body
Electronic: A Year With Microsoft on the
Multimedia Frontier. His book on virtual
reality will be published this spring by
Random House.
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