Web shops optimistic despite tech turmoil

by Glenn Drexhage, Business In Vancouver Technology News

E-business might be a dirty word in some parts of the post-bubble world. But that hasn't stopped a handful of B.C. survivors from preaching the virtues of the brave new business Web. Despite the brutal market downturn for all things Internet, Blast Radius Inc. and Constructive Media Inc. of Vancouver and Victoria's Falcon-Software Company. Inc. have endured.

"We see a resurgence in demand," said Michael Dingle, executive vice-president of client development at Blast Radius. If so, the firm's bucking a trend. "I don't expect [an IT spending turnaround] this year at all," said Brian Pow, a technology analyst at Acumen Capital Finance Partners Ltd. in Calgary.

That said, Pow added that companies are still interested in using the Web to enhance business. "It comes down to: 'What return on investment can you demonstrate?'" Dingle noted that the dot-com disasters and silliness of yesteryear mean his firm has to stress that it's about real business. It seems to be working. He said Blast Radius, which has about 214 employees, recently enjoyed its best quarter in terms of revenues and added that it aims to reap between $24 million and $26 million in gross revenues this year.

The company started out as a Web design shop but has expanded its services. They include the ability to use the Internet to automate sales, marketing and customer service tasks for its more than 50 clients, including Nike, Nintendo of Canada and Lego. "It's not so much a change in direction inasmuch as an increase in the Internet's utility over time," said Dingle.

Nine-year-old Falcon-Software bills itself as a straightforward Web design company. It began as a software firm but switched its focus three years later.

"We had dreams of grandeur...but we also had to eat," recalled executive director Gary Eisenstein. Eisenstein estimates Falcon has built Web sites for more than 200 clients and has between 70 and 80 regular "active" clients.

Falcon mainly targets niche markets in the U.S., including manufacturers and distributors of products from electrical fixtures to cardiac equipment. Some local customers include Sooke's Rush Adventures Inc. and Delta's Texcan.

"I'm not going to buy a pair of jeans on the Internet, but if ...I just need more [product] to resell to my client base, the Internet's a great vehicle for that," Eisenstein explained.

The company's also touting its "Webmercials," which allow users to watch online commercials for specific products. Last year it opened FalconEFX, its new media division. The 20-person firm has always been profitable, Eisenstein said. It's moving into a new, bigger facility in September and may have six to eight more employees on board by the end of 2002.

Meanwhile, Constructive Media bills itself as an "Internet development agency" or, as co-founder Geoff Mair put it, a firm that enables business processes on the Web. That could mean, for example, building a site or a specific piece of software to streamline a sales task. Revenue growth has slowed this year (the company began at the end of 1996), although Mair aims to remain profitable. "I think a lot of customers are considering Web projects today that they might not have considered six months ago," he said. However, fresh accounts aren't as forthcoming. New projects and new customers are tougher to come by and they spend more time making a buying decision, Mair said. He added that Constructive Media has about 20 clients, and "five or six" of those are mainstays, including Microsoft Canada. Mair's company has a staff of 15.

by Glenn Drexhage, Business In Vancouver Technology News

Falcon-Software is a leading Web development firm specializing in website solutions for companies across North America. Falcon-Software delivers powerful and effective website solutions, offering a complete range of strategic and creative Internet-based technology services including: e-Commerce, e-Catalogs, databases, Intranet workgroups, multimedia animation and audio/video applications.
 

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