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Movers & Shakers By Steve Hamm July 7, 1999


How Frank Moss Is Creating a Mini-Keiretsu of Software Startups
In his quest to simplify the programs companies use, this veteran computer scientist now serves as launchmeister and adviser to three Web-oriented ventures

Frank Moss is a perpetual motion machine. The veteran computer scientist and executive has jumped quickly from one project to the next at IBM, Apollo, Lotus, and Tivoli Systems -- and his work has spanned every generation of computing from mainframes to the Internet. Now he's creating his own mini-keiretsu of startup companies from his home base in Weston, Mass. His approach: to help launch companies and serve as their on-call adviser. "I'm not a venture capitalist, and I'm not going to run just one company," he says. "I help companies get off the ground and into the marketplace."

And sometimes all at once. Moss, now 50, doesn't mind juggling a handful of investments at the same time. Bow Street Software Inc. in Portsmouth, N.H., which Moss helped organize a year ago, is about to launch Web-based services for managing product distribution channels. Meanwhile, Agillion Inc., in Austin, Tex., may beat Bow Street out the door with a suite of Internet services designed to help small businesses handle customer relationships. At the same time, VoiceMate.com, which plans on offering audio information via cell phones, is just getting off the ground in New York City.

"THE SYSTEM IS BROKEN." What ties these companies together? Moss has been pursuing a personal quest since he got into the computer business more than 20 years ago. His goal is to simplify the handling of complex computing systems. He believes that huge software programs that companies now use to manage everything from finances to customer service are already dinosaurs: They're too expensive, too hard to install, and too difficult to manage. "The system is broken," says Moss.

In its place, he envisions a world where much software is delivered to corporations and individuals as services that run on the Web. But he's not talking about the current trend of outsourcing companies running large SAP and PeopleSoft applications for corporations. That just moves the complexity from one company's computers to another's. Instead, Moss foresees an entirely new way of using software that he calls the "Web services architecture."

 

Bow Street's software tools for Web services should be easy enough for business managers to use on their own
 

Here's how it works: Small pieces of software, each with its own, discrete function, can be created and assembled into application-style packages and used either within companies or between them. The software is stored on servers and accessed via Web browsers -- but it can be tightly controlled by network administrators. Best yet, perhaps, is that basic software building blocks can be created and reused many times over. "This is going to happen quickly," predicts Moss. "When Y2K is behind us, you'll see the whole structure of the computer industry changing drastically."

Bow Street shows how the architecture works. The company will be selling packages of tools that customers can use to create Web services and will also sell services itself. The software allows companies to create dynamic, customized relationships with each of their distributors or dealers -- giving them up-to-date catalogs, order forms, pricing, marketing materials, and information about special promotional offers. Moss says the tools are easy enough to use so that business managers -- rather than programmers -- can set up the new relationships.

 A BIG-COMPANY GUY NO MORE. It's an ambitious plan, but Moss has a proven track record. After earning a BS at Princeton University, he got his master's and doctorate in aeronautics from Massachussets Institute of Technology. He worked on advanced mainframe technology and networking at IBM's Yorktown Heights (N.Y.) research lab. Then he ran the engineering department at Apollo Computer before heading up Lotus Development Corp.'s first consulting services group. But it was as CEO of Tivoli Systems that he made his mark.

Tivoli was started in 1991 in Austin, Tex., by a handful of former IBM engineers. Their plan was to create a new type of computer systems management software that would let companies coordinate all of their computers from a central console -- instead of managing Unix computers, mainframes, and PC networks separately. They recruited Moss, who successfully marketed the company's products and lifted revenues from zero to $50 million in just three years. After the company was acquired by IBM, he stayed on as general manager and ultimately built a business combining Tivoli and IBM products that topped $1 billion in revenues in 1998.

But Moss decided he wasn't a big-company guy anymore. So he quit and cast about looking for something entrepreneurial to do. His wife made him promise not to be the CEO of his own company. Instead, he came up with the idea of becoming an investor and launchmeister.

He's well suited to the role. Steve Marcie, co-founder of Tivoli, recalls that Moss cheered up the engineers when they were depressed and put the fear of God into them when they needed to notch up their performance. For instance, when it looked as if they wouldn't meet the 1993 launch date for their first products, he gave an impassioned speech to the staff. "He was blunt. He said the fate of the company rests with you," says Marcie. They made the deadline.

 

Moss is turned off by the current investment climate that often overvalues startups and makes VCs fabulously rich
 

Now, with his handful of pet companies, Moss is attempting to refine the art of nurturing startups. He advised Bow Street to conduct a thorough survey of corporate information technology executives before it began designing its products -- rather than creating technology and hoping customers would find it useful. He also suggested that the company charge a low price initially for its software and then raise it as customers use the products and services more extensively. "His idea was to break the traditional enterprise sales model that puts customers in a multimillion-dollar headlock," says Bow Street CEO Jack Serfass.

Moss also urges the executives at the three companies to share ideas and plans. Serfass says he meets often with Agillion CEO Steve Papermaster. And the two companies have decided to use each other's products. Bow Street is using Agillion's services to manage its relationships with customers, and Agillion plans on building Bow Street's distribution technology into the second version of its services.

Leaving the running of companies to others has allowed Moss to mix with a lot of people in the industry -- from entrepreneurs to fellow investors. One side effect: He's turned off by the current investment climate, which sometimes overvalues startups and is making venture capitalists fabulously wealthy. "What's happening is a little bit sickening. The rich are getting richer," says Moss, who was left-of-center politically when he was at Princeton. Add up Moss's revulsion at over-the-top capitalism and his cutting-edge ideas about software, and he's still a bit of a rebel.

Hamm is Business Week's Software editor


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Frank Moss: Launchmeister for Bow Street, Agillion, and VoiceMate.com


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