Aware started out as a technology in search of a product. How about a modem that runs at 1.5 million bits a second?
Pushing phone lines to the limit
By Scott Woolley
HOWARD RESNIKOFF may be the only person ever to wear bifocals with lenses that are divided vertically rather than horizontally. The founder of Aware Inc., a data communications firm, veered off into optics to meet his own needs-and swears his peculiar invention helps him to see better. But no one else wants these weird glasses. Aware's chief executive, James Bender, calls Resnikoff a creative genius: "He invented the useful, he invented the useless. It didn't matter."
A technology company can survive only on useful inventions, and for a long while it looked as if Bedford, Mass.-based Aware wouldn't make it. Resnikoff, a 60-year-old former manager in Harvard's Information Services department, founded the firm in 1987 and proceeded to land some military contracts involving submarine communications. But he couldn't land a profit. Four years ago the venture capitalists bankrolling the firm threw him out. They brought in Bender, a 45-year-old veteran of two other technology startups, to rescue the firm.
And now it seems that one of Resnikoff's crazy inventions could turn into something very big-a means to deliver fast Internet access over ordinary copper phone lines. There are many firms competing to open this particular bottleneck, but Aware just scored a big point. In January Compaq Computer, Intel and Microsoft endorsed the Aware data transmission format. By December Aware says it can get a modem to market that will handle up to 1.5 million bits per second, 26 times as much as the top speed of the fastest modems now commonly sold with computers.
What's the trick? It goes back to that submarine problem. It is extremely difficult to send acoustic signals to a submerged submarine. Signals sent through ocean water never travel the same way twice. Temperature, the waves on the surface, salinity and other aquatic variables are constantly changing. The signals quickly get attenuated, or weakened, as they pass through the seawater. Similarly, in copper wiring the signal also attenuates rapidly, and can suffer interference from broadcast radio signals or heat.
Aware's solution: send 100 or so signals at once, each taking a sliver of bandwidth in the range of 4,000 Hertz to 400,000 Hertz. If one signal is corrupted, the others can pick up the slack. Data can be reassembled at the end. All this shuffling of signals and bits gets very messy, but today's high-speed signal processing chips are quite up to the task. It's not unlike what goes inside a cellular phone.
Charles Stewart, a wealthy former options trader in Chicago, and now Aware's chairman, is the company's principal angel. He suffered through a string of 35 moneylosing quarters that ended in 1996. He introduces himself as "the idiot who kept putting money into this company."
He doesn't look like such an idiot now. Aware went public in 1996 and Stewart's $16.6 million stake is worth about four times what he put in.
Aware is not home free yet. To sell its modems, which it intends to manufacture using chips from Analog Devices, it has to win over buyers at both ends. You'd have one of these modems inside your PC only if your local phone company had similar modems that you could dial into to access the Internet.
All the Baby Bells have joined a coalition supporting the technology Aware uses, but so far none have committed to buying Aware-compatible modems. And Aware is competing with a legion of modem suppliers, in some cases using compatible formats and in other cases entirely different ones.
There are lots of ways to get data bits into a home at better than the 56,600-bit-per-second rate of garden-variety modems. One is through ISDN lines, which haven't caught on big because they are difficult to install and aren't terribly capacious (only 128,000 bits per second). Another is through cable television lines, at rates potentially in the millions of bits per second. Finally, there is the nascent industry of using existing copper phone lines to transmit data over short distances (up to several miles) at very high rates. This is the business that Aware is in, and within this business there is no shortage of competitors. Among the outfits working on modems for this market are Alcatel Alsthom, Texas Instruments and, in a joint effort with Rockwell International, Northern Telecom.
Facing up to such giants, little Aware (1997 sales: $6 million) badly needed the boost from the three giants of the PCindustry. Why do Compaq, Intel and Microsoft care about high-speed phone lines? The more data being pumped into PCs, the more likely users are to upgrade their machines. The trio of giants is happy that cable companies are rolling out their own high-speed data services but want the telephone companies out there providing competition.
Aware's new modem is the first to combine two important features. First, its use of multiple subsignals (see diagram) will allow for future speed increases, since future increases in chip speed will allow for more of these subsignals. Second, the Aware modem recognizes when a phone is picked up, and compensates to maintain both connections over one wire. It doesn't demand installation of a "splitter," an electronic box mounted where the phone line comes into the house to separate modem signals from talk signals. Problems with splitters-and a shortage of technicians who know how to install them-have slowed sales of ISDN lines.
Say Dad is in the den cruising the Internet using one of today's regular modems, and then Mom picks up the phone in the kitchen. With today's modems, Mom gets an earful of computer screeching and Dad often gets disconnected. With Aware's technology, a phone user in another room would never know he is sharing the line with a modem. The data communication takes place at frequencies too high for the human ear to hear.
The danger for Aware is that powerful companies like Rockwell, which is a leader in making the chips for today's modems, might just ignore the wishes of the PC companies. To be conciliatory, Bender says he would be happy to license Aware's technology for as little as 50 cents a modem, which could translate into perhaps $20 million a year in royalties.
There's just one good reason a company like Rockwell might adopt the Aware format: the hope of avoiding a format war of the sort that has slowed the 56-kilobit modem market. "As an industry I think we've all learned that standards are incredibly important for growth," says Nortel's Stephen Edwards, who oversees the joint venture with Rockwell.
Resnikoff, still an Aware shareholder, worries competitors might push through a lesser technology standard. "Once you put in place a solution that is not bad, it's hard to build enough momentum to make a change," he says. That's the reason Resnikoff thinks everyone is using Microsoft Windows. And, he says, why they still wear horizontal bifocals.
forbes.com
Thanks Tim, thought I'd cut and paste so as to save some the trouble. |
