A Demo invite equals a ticket to success

INDIAN WELLS, Calif. -- More than 800 computer executives, analysts and reporters have repaired to this desert retreat for the three-day splurge of industry gossip, shameless preening and new product introductions called Demo 98.

It's unclear which matters more to the paying attendees (unlike larger industry gatherings like Comdex and PC Expo, Demo is closed to the general public).

"For me, I'd much prefer to be here surrounded by real products, rather than some other place where you just listen to a lot of elevator speeches," said Michael Kolowich, the president and chief executive officer of Individual Inc., who said he was here simply to look and think.

"It has very little to do with reaching customers," said Tom Hagan, the chairman of Actioneer Inc., who was here to do business. "Our partners -- and potential partners -- are here."

Hagan cocked a finger in the direction of a neighboring booth, where officials from Dragon Systems Inc. were demonstrating the company's latest voice technology. He noted that executives from the two companies first got acquainted at Demo a year ago. Actioneer, which Monday announced a series of intelligent messaging products, also took the occasion to trumpet news of a joint development agreement with Dragon.

While the shmooze is good and the weather more welcoming than the rest of El Nino-battered California, Demo also looms large in the marketing plans of computer companies. Even though many of the offerings on display at the conference will not be commercially available for several months -- some longer than that -- an invitation to demonstrate a product's capabilities is highly coveted.

"We've definitely found it's worth the time and sweat that goes into making the cut and putting on a good demo at the conference," said Lois Paul, who runs Lois Paul & Partners, a public relations company based in Boston. "We've had a number of clients invited to Demo over the years -- some on stage and others in demo stations. You can't underestimate the importance of that invitation or the potential impact," Paul said. "Just being part of that select group can help a company create a marketplace buzz which helps establish or set the stage for its new product or service."

The venture capital crowd -- including representatives from the 21st Century Internet Venture Partners, Advanced Technology Ventures, and Kleiner Perkins Caufield & Byers, among others -- was also out in force, looking for the next Netscape Communications Corp. That wasn't lost on any of the presenters, some of whom dropped less-than-subtle hints that they'd be eager to meet investors willing to pony up money in their fledgling ventures.

To be sure, several duets are going to get played out at Demo 98 but it's unclear how the different novellas will end.

"This industry has generated more capital than any industry in the history of the world and we've got more money in VC funds than we've got good places to put them," said Bruce Frederickson, the chief executive of Channel Tactics who has provided financing and management advice to several startup operations.

"A lot of products won't see the light of day -- not because they're not good products or they don't have good marketing. But the other thing that VCs are looking for is mature, experienced management," he added.

But an invitation to showcase a product at Demo is no iron-clad guarantee of success. Just like the jinx that supposedly accompanies athletes who make the cover of Sports Illustrated, companies coming out of Demo have had a mixed record. A lot of gee-whiz, ultra-cool demonstrations often never make it to market. Still, an auspicious beginning can help create that vital ingredient necessary to the success of any product: buzz.

Officials from Palm Computing -- now part of 3Com Corp. -- recall how their appearance at Demo two years ago helped create early excitement about the Palm Pilot, the company's then new hand-held device.

"We remember that it was here where we debuted," said Ed Colligan. "Now we have over 4,000 developers, more than 1,000 applications for the Pilot and we're doing over $300 million a year," he added.

Officials from Sun Microsystems Inc. can only hope that the Persona, their "proof-of-concept" entry this year, enjoys the same kiss from Lady Luck. The Persona is a network services appliance that can access the Internet and also serve as a phone and fax. But when Sun's chief technology officer, Geoffrey Baehr, attempted to log on to the system, the gremlins who accompany live demos were in a playful mood.

"Your password is incorrect," the Persona's automated answering voice warned Baehr.

Baehr stuck with it for several seconds but was similarly unsuccessful. After several tries, the machine upstaged him.

"Goodbye," the Persona broke in with a bit of timing that Jack Benny would have been hard-pressed to match.

"Well, this wouldn't be Demo without this," Baehr said to unrestrained laughter from the audience.