Few people await the deregulation of electricity with as much eager anticipation as Dean Mortteon, but it’s not because he expects to save a bundle by shopping for kilowatts among a gaggle of different suppliers.
Mortteon, founder and president of Arc TI in Hammond, Ind., hopes to make money supplying software to the people who traffic in electrical power. His firm, founded in 1996, already writes programs that keep track of power deals made by traders and brokers in the wholesale end of the business that opened in 1992.
But once firms get into reselling power at retail, Mortteon hopes, business will start to really boom.
“Right now the retail market amounts to only a few pilot projects,” said Mortteon, “but 1998 promises to be an active year, with things really taking off in 1999.”
Just how you convince a homeowner to abandon his current electricity provider and sign up with a new company is still being learned, Mortteon said.
“The early indications are that it will work something like the experience in selling telephone service,” he said.
As a commodity, electricity presents some interesting problems because it isn’t easily stored in the same way as gasoline or oil.
“Traders sometimes find they have to deliver something they’ve optioned with five minutes notice,” Mortteon said. “They need systems that can keep track of all their positions so they can respond on very short notice.”
As resellers take electricity to the retail level, the complexity can only grow, increasing the need for computer systems to keep everything straight, Mortteon believes.
Picture this: Even though the giant AT&T Corp. has failed in several attempts to peddle picture phones, Video Con Inc. in Schaumburg believes it has the formula to succeed in promoting a new British-made videophone.
“A mistake made in the past was failure to look at applications,” said Don Hunter, Video Con president. “Just because you have technology that can do something doesn’t mean people will want to do it.”
The new phones have much better images than anything seen before, in part because they require special digital lines.
Hunter’s ploy in promoting a new version of the videophone is to target businesses and video conferencing. Specifically, he will target physicians, because his firm already arranges for teleconferencing with physicians to promote products for the pharmaceutical industry.
In some cases, he said, his firm may even pay to install ISDN lines to the offices of large medical practices to enable doctors to participate in video conferences sponsored by pharmaceutical firms.
ISDN, which stands for integrated services digital network, can more than double the amount of data that may be carried over regular copper telephone lines. Hunter is also pitching hospitals with the idea of upgrading to ISDN and buying several videophones, which cost about $2,000 each.
“When you have a business application that a technology delivers, the costs are really very reasonable,” Hunter said. “We’ve got many executives interested in using this to have video conferences with the top people in their companies. One chief executive wants to install video phones in his vacation homes to keep in touch when he’s away from the office.”
Research rebound: After years of stagnant spending, research and development investments are poised for a major resurgence, according to an annual forecast by Battelle and R&D Magazine.
“Industry realizes that changes in operations and structure are not the only roads to profitability,” said Dr. Jules J. Duga, a senior analyst at Battelle, a Columbus, Ohio-based firm that develops new technologies and products for industry and government. “Investment in research and technology is required for long-term survival.”
R&D spending in 1998 is expected to increase to $215 billion, up more than 4 percent from the $206 billion that the National Science Foundation estimates was spent last year. Industry investments will lead the way, totaling an estimated $143 billion, or more than 66 percent of all R&D spending.
The federal government is expected to pour in $62.9 billion, or 29 percent of the total, slightly ahead of contributions made last year. But the government’s share of R&D spending has been slipping in the past two decades and is expected to continue falling over the next five years. Universities and not-for-profit agencies will invest nearly $10.2 billion.
