|The management team behind Infogistics' chief executive Andrei Mikheev, left, and chief technology officer Steve Finch.|
Monday, 22nd October 2001
IN THE knowledge economy, easy access to almost unlimited amounts of information can be a hindrance a well as a help.
An unfiltered mass of data becomes a suffocating blanket to businesses trying to exploit information in a bid to gain that crucial competitive edge.
The latest knowledge management company that has sprung up to combat this rising tide is Edinburgh-based Infogistics.
The early-stage firm, which has three staff in Edinburgh and four in Moscow, was founded 18 months ago to commercialise natural language processing technology developed at Edinburgh University.
It is hoping to provide text-analysis, content extraction and document retrieval services across areas of industry including HR, law enforcement, knowledge management and CRM.
To demonstrate the strength of the technology, Infogistics has set up an internet search engine (www.infonetware.com).
"Infonetware.com is a ‘meta-search’ engine - which sits on top of other engines that index the web and pulls information back," says chief technology officer Steve Finch. "What makes it totally different is that it reads documents that come back and generates an index."
So for example, if a user conducts a search on "James Bond", the engine will obviously return a list of sites on James Bond.
But it will also provide an index of related subjects by assessing the returned documents and extracting key terms.
In this instance, it will suggest sites on Sean Connery, James Bond soundtracks, Ian Fleming and secret agents. By clicking on one of these topics, the user "drills down" through the index tree to get a further sub-division of subjects.
"It provides the user with a ‘know it when you see it’ touch," says Finch. "Infogistics enables information and data contained in text documents to be retrieved, categorised, extracted and delivered to the right people at the right time."
The meta-engine software, called RealTerm, is one of a portfolio of products that utilise the company’s text-anaylsis technology.
Infogistics’ business model is partly based on customers building its technology into their own offerings and has several OEM agreements pending.
The company’s software is at the heart of a ASP-based recruitment platform designed by Leith neighbours Integen.
In the US, it is on the verge of being adopted by an undisclosed market research company which wants to determine public opinion by analysing comments on internet bulletin boards.
"Our technology can be used to extract people’s views on political events," says Finch. "The basic idea is analysing messages on bulletin boards and classifying them. The fundamental idea is that chat boards are a good pre-indicator to opinion polls."
The applications for text analysis are countless. Infogistics is currently targeting the human resource industry, but its sales potential is currently constrained by lack of working finance. The legal, medical and media industries are also high up on the list of sectors to be targeted.
This vertical marketing approach is assisted by Infogistics’ ability to customise software for any customer with a matter of a few months - a selling point that has been developed with he help of a £45,000 Smart Award.
Infogistics is fortunate to have access to highly skilled programmers in Russia. The link is provided by chief executive Andrei Mikheev, whose mother is a professor at the Russian Academy of Sciences in Moscow.
"She has access to some very bright students," says Finch. "They take what we do, polish it, test it, and make it run on other platforms."
The Scottish-Russian link, while exceedingly useful (Russian programmers are much cheaper to employ than their Scottish equivalents), throws up a number of challenges. "You can’t micro-manage people in Russia from here," explains Finch. "Its down to the quality of the vision of the product. If a software engineer knows what has to be done, then that is 90 per cent of the task. If there are ambiguities, then that is a problem," he adds.
Infogistics will be appearing today at the Connect Investment Conference, in a bid to secure the £2.5 million it needs to vastly ramp up its sales and marketing.
If it gets the capital, the embryonic company plans to grow to about 20 people. It will also look for a chairman, a director of sales and possibly a new chief executive with experience of the US market.
Failing to grab the attention of the VC community will not mean the end of the company. "We have been entirely self-financing from sales so far," says Finch, who adds that revenue for this year is anticipated to top £200,000. "Obviously organic growth will be slower, and we won’t be able to target the markets we want so quickly, but the company is totally viable as it is.
"We believe the time is right and there is a great opportunity to move in to markets at this stage with an investment and the product range we have," he says.
Infogistics will be pitching to potential investors with the promise of healthy profits by 2004.
"Earnings for year three are expected to be £3-4 million with £2 million profit. By year five we are anticipating turnover to be £20 million, of which £15 million will be profit," Finch claims.
But you don’t have to look far to other knowledge management companies that have floundered in the face of a tech slowdown. Infogistics success in securing funding at the CIC will depend on its ability to sufficiently distance itself from the opposition with the promise of new technology with real earning power.
And despite the difficulties in raising funding for hi-tech start-ups, Infogistics is convinced that, in the long-term, the demand for text analysis technology will only increase.
"The fundamental drivers of this market is the vast amount of information that is now being created and being made available to people," says Finch. "The market for intelligent processing of information is growing massively."
Anyone who has seen the benefits of ditching google.com for infonetware.com will hope the company gets the shot at the big time that its technology deserves.
Monday, 22nd October 2001