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Verity Inc.'s Ron Weissman

Recent good financial results provided a pleasant backdrop to a recent visit to ADT's offices by Verity's Ron Weissman, vice president of strategy and corporate development. Weissman came to Verity after a significant stint at object-pioneer NeXT Computing. Along with others, he is managing a turnaround at a company that stands at the center of some of today's important trends, notably knowledge management and portals.

Q. What do you think of all this portal talk?

A. Well, the definition of portals is all over the map. I think in the future, portals on the corporate side will give you one-stop shopping for corporate information and one-stop shopping for corporate applications. Verity is focused on the former, not on the latter. Although we enable lots of corporate applications, we're not the gateway into your ERP system, HR system or manufacturing system.

One more distinction I'd like to make is that the portal is different from broad-based information access because what a portal does is it assumes a company is already making choices, that certain classes of information are more important than others. But here's the most important stuff in terms of our business growth: We put special effort into prioritizing and helping you find the most important things to run your business. So, as opposed to being a broadbase information facility that finds anything anywhere, which we also do, our approach is to help companies prioritize structure, access and navigate the most important bits so they can organize their Web site or intranet the way they organize their company - around things like products, business initiatives, goals, salespeople, customers or services.

Q. Describe the history of Verity.

A. I joined one month before the rest of the new management team, and I'm part of a turnaround effort. Verity had four phases of development. Back in 1988, the company was spun off from a CIA research project. The project had its roots in all the things we call 'push' today. An intelligence organization has tens of thousands of analysts and runs not only on satellite imagery data, but on textual tool information - cable traffic and so forth. And back in '88, the goal was getting the right document into the hands of the one or two people who needed it. What Verity had to do was invent matching of people in documents, which we call profiling today; it invented smart push; it invented categorization technology. It would have called itself a text-retrieval company.

Verity launched a search engine on some of its core technology, which it chose to OEM for the first several years of its commercial life in the early '90s. It did deals with companies like Lotus and Netscape. And today it has about 200 to 250 OEMs.

The third phase was that Verity said, 'Ah ha, the Web,' and at that point placed two bets. In '95 the company said 'We're going to Web-enable all of our products,' and on the strength of that announcement, it did an IPO that was the most successful IPO prior to Netscape. And what the IPO did was raise $50 million. Verity went out and bought companies because it believed that the Web was going to be the next commodity big thing. Verity switched gears from its high-end focus - solving large-scale problems and OEMs - to wanting to be on everybody's desktop. It had a whole suite of products focusing on the personal side. At the same time, it maintained its strength on the corporate side.

But for a company with 300 people in 1996 early 1997, the company had over 400 shipping SKUs. That's about one-and-a-half SKUs per person in the company. There's a technical word for that: unsustainable. The CEO's appetite was bigger than his stomach. He [Philippe Courtot ] did a brilliant job of creating Verity's image, brand recognition - but the company began to struggle in the third phase of its existence between being a commodity player - wanting to be the next Microsoft - and being a solutions provider, more like an Oracle.

Q. When we first saw the Web, we thought the only problem was it was hard to find stuff. We thought Verity was perfectly positioned. But Yahoo has been the great success there.

A. Well, this brings us to our next phase. In August 1997, the board brought in a new management team to restructure and refocus the company. We spent two or three months figuring out what business we were in. We shot the commodity half of the business, focusing back on the high end. We looked at how customers actually used information-retrieval technology.

And from our own research, from the research the ACM did, we learned that the typical user puts in a one- or two-word query, will not scroll down beyond the first page of results, and will not type, among other things. The typical user is pretty lazy. In fact, what the Web has done is move search and retrieval from the 20 or 30 librarians in the company that used to be specialists to every professional, creating a broad user base of unsophisticated, inexperienced novice professionals who nevertheless need to find stuff.

It's very clear that, with the Altavista model, the good news is that you've got 10 million hits; the bad news is 'here they are.' It just doesn't work, and it is being supplanted by the Yahoo model of 'Let's show you what you can look for. Let's show you what resources you can navigate. And let's do it visually and intuitively.' So, the company, since late 1997, has refocused itself on the corporate market, and on providing a complete suite of knowledge-retrieval solutions that help us build the next-generation thinking about how corporations use unstructured information.

Q. Is there such a thing as a search-engine market?

A. There are three or four market segments that we see. The first market segment is the public Internet recreational search. You know, 'Show me all the sites that carry Goodyear tires,' that kind of shopping and casual browsing. That kind of market space is now dominated by Yahoo, Excite and AOL. We call it recreational search. It's funded by advertising revenue. That's the primary business model. We don't play in that space at all.

Then there is the second stage, which is putting a search button on a Web site. That used to be a big piece of Verity's business: Doing simple searches on simple Web sites. We saw Microsoft offering technology in that space. And we saw it becoming commoditized. We still have a large installed base, but our primary [goal] right now is trying to solve mission-critical application problems, focusing on companies that are building line-of-business applications - business intelligence, customer care, routing and messaging systems, briefing systems and equity research systems.

Q. So you don't call it knowledge management.

A. All those things can be included in the domain of knowledge management. But that term confuses more than it illuminates. We are classified in that space, but we'd rather be seen as delivering pragmatic values to business managers that solve problems, rather than the kind of fuzzy 'We're going to make you smarter,' whatever that means. But we have a lot of customers using us to build knowledge solutions.

[In financial trading, for example], we are providing the context behind the statistics. What's combined is the real-time pricing data, plus news and internal research. That kind of portfolio management/research dissemination is a very big business for Verity. A similar example is the Los Alamos National Lab, which has 5,000 scientists. Each of these scientists has a research specialty, and we give them a daily or a weekly briefing about their research field based on a scouring of the .edu portion of the 'Net - looking at journals, the business intelligence side and the science, be it spidering, be it Web crawling - and then give them a custom presentation on what's new in their research discipline. That's a similar kind of application, but a different domain.

Q. It seems like the Apple-NeXT merger was one of the most successful in history. How do you judge the NeXT experience?

A. It was sort of a reverse takeover wasn't it? With NeXT, essentially, the object analogy won. But when you win a battle, sometimes you become invisible. Nobody argues anymore about telephony. You know, you don't go to your wiring cabinet and say, 'Wow, I have this really cool wiring cabinet.' Most of us use the telephone. The way virtually all modern software develops is using the principles develop by object technology. The battle's been won in almost all of the major application environments, whether you're talking about Java, a Delphi or Visual Basic, it incorporates some degree of object principles, and it's the way software engineers are being trained. The object revolution is now going to Phase two and three. And that is, the Web allows a high degree of discreet modular interacting objects.

NeXT was way too early to market, and it was way too 'unstandard.' But this has implications for [Verity] today, because we are very much believers in XML and XSL as being the future of one of the ways data will be changed and indexed. And we will be there as a standard.

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