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Eli Barkat: Making Push More Polite -- and Ready for Prime Time He fine-tuned a technology that once clogged corporate networks, and now his BackWeb helps companies speed critical data to employees Eli Barkat was well along in his career as a venture capitalist in 1995. He and the other software engineers in their firm, BRM Partners, had already cashed out of antivirus and backup software operations with sales to Symantec Corp. They had rung up a success with Check Point Software Technologies, a provider of firewalls that control unauthorized access to computer systems. But Barkat had become enamored of a software concept that delivered data over networks to specific computers without any action by the recipients. Barkat decided to lay aside his active role in BRM and become CEO of BackWeb Technologies to develop this new software, which came to be called push. Bad timing. HIT BY THE BACKLASH. Push technology soon became something of a sensation, then a scourge, in the Web commerce world. PointCast became the poster child for a concept that would automatically deliver such stuff as news and advertising to people who signed up for the feature. PointCast and its concept flamed out before it could even launch an initial public offering. Corporate network managers reacted badly as they saw their networks become clogged: Push was making it maddeningly difficult to get any work done. And people weren't all that crazy about getting stuff pushed in their faces at home, either. It didn't matter that BackWeb was aiming at a far different market -- delivering critical information for corporate uses. BackWeb got stung in the backlash against push. Rather than give up, Barkat, a former Israeli paratrooper, went into development mode. At one point he took $15 million earmarked for marketing and instead devoted it to fine-tuning his own concept, which he now calls polite push. Now it's payoff time for the 36-year-old Barkat. BackWeb is picking up customers regularly. And revenues, which should surpass $20 million this year, are doubling annually. The company launched its IPO in June, and analysts expect BackWeb to start showing a profit as early as the end of next year.
Barkat considers two elements to be the key to his concept of push. One is that it transfers the control over distributing information to the provider. Push lets companies deliver new pricing lists to the sales force, for example, without waiting for them to download e-mail. And headquarters can verify that everyone got the information. The second element is the polite part. While BackWeb was in its development mode, engineers figured out how to slip packets of information through unused space in networks, avoiding the clogging that had helped damage push in its early days. Looked at that way, networks are "idle" 80% of the time, Barkat estimates. "We work while you think, and we think when you work," he says. BATTLE-HARDENED. Barkat traces his interest in software to a high school computer course in Israel. "It intrigued me, and I was good at it," he says. He was soon conversant in the BASIC computer language and building algorithms and chess games. After high school, Barkat set aside his interest in computers when he performed his mandatory military service as a paratrooper. He spent four years in the army, mostly in Lebanon, and rose to the rank of lieutenant. Only now does he realize what good training it was. "People think the Internet moves fast and you have to be decisive -- you should see a battlefield," he says. After the army, Barkat, the son of a physics professor, earned a bachelor's degree in computer science and mathematics from Hebrew University. By 1989, after a stint as a developer for a couple of Israeli firms producing design software, he was ready to begin his career as a venture capitalist.
By 1995, Netscape had driven home to software engineers the possibilities of the Internet. "I asked myself, 'Where is this going to go,'" says Barkat. "As a constant user of the Net, I thought I saw a weakness in the need for users to keep themselves updated on critical functions." The way he looked at it, he wanted to supplement the existing newsstand information-gathering model with one that used home delivery. LONG WINTER. While remaining a partner in BRM, Barkat laid aside his operational duties with the firm to devote himself full-time to what became BackWeb. As push picked up adherents, Barkat figured he was on to something big. "It caught the imagination of people faster than any topic I can remember," he says. But what Barkat now calls Push 1.0 wasn't ready for prime time. In hindsight, he says the technology was too intrusive, cluttering up networks, and the advertising-based approach popularized by PointCast made matters worse. So when the long winter for push set in, Barkat went back to first principles. "Push was always about the less the better," he says. With the backing of his own venture fund, he was able to keep working on a less intrusive approach for push while dozens of other companies funded by VCs in the heady days of 1997 fell by the wayside. This year was the vindication of his concept, as both BackWeb and Marimba, which uses push as a system management tool, launched IPOs. The future of push is far from assured. After going public at 12 in June, BackWeb's stock price soared to 51 7/16 in mid-November, only to slip back to the mid-30s recently. But with 200 or so customers already using BackWeb, the once-hyped technology has some solid results to fall back on this time around. Assistant Managing Editor Wallace oversees Business Week's technology coverage. _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ |
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Eli Barkat: CEO of BackWeb WEB POINTERS Click here to visit some of the sites mentioned in the story: BackWeb BRM Check Point PointCast Jefferies Marimba | ||||||||||||
