Salt Lake City – The Next Silicon Valley?

Tester's Choice: Utah is a breeding ground for high-tech companies that have thrived despite some uncertain economic times.

Utahns sometimes say that the state is the birthplace of word processing (not quite true) via the WordPerfect empire (now a small department of a Canadian concern) and the birthplace of networking (also not quite true) with Novell (now merged with Cambridge Technology Partners).

In truth, Utah was the birthplace of the sophistication of the reseller channel, but the state, particularly in the 40 miles or so surrounding Salt Lake City, is also a breeding ground for high-tech companies that have thrived despite some uncertain economic times. Salt Lake City also, of course, hosted the 2002 Winter Olympics.

I had the opportunity to tour the Olympic IT infrastructure, although I saw it the day after the Olympics closing ceremonies. Since at least some of the infrastructure will be used for the Paralympics that begin March 7, the IT facilities were not completely evacuated.

The main integrator for the Olympics was SchlumbergerSema, which took over IBMs four-decade-old for-profit sponsorship. Additionally, there were key local companies that assisted with the massive $300 million IT project.

SchlumbergerSema officials say the project took over 100,000 man-hours to complete and that 1,350 people were involved; 3.2 million lines of code were written; and almost 6,000 systems--including 5,000 Gateway PCs--were involved. Its difficult to assess how many lines of code that Utah companies actually wrote, but suffice it say the locals had a hand in building the infrastructure.

Heres a profile of some of those Utah tech companies, starting with three that provided services for the Olympics.

KeyLabs Lab Acquisition: This is one of those amazing stories that can only adequately be described by the bullet-riddled Exodus sign, located inside KeyLabs lobby, that remains a loving testimonial to the company that was once its owner.

KeyLabs main founders got their start setting up Novells Superlab--the giant interoperability and compatibility lab that helped fuel Novells successful certification program, which generated a tremendous amount of copycats.

KeyLabs was doing great, having just spun off its Altiris software division (see below), and having convinced Sun that Java needed a certification program similar to what Novell had.

Then Exodus struck.

Exodus bought KeyLabs for many good reasons, but mainly because it needed KeyLabs performance and capacity planning capabilities to offer its customers as a value-added service. Unfortunately, KeyLabs also had a competitive assessment lab that came into conflict with some of Exodus biggest customers. KeyLabs decided to buy back its assets, but Exodus refused.

Then, as Exodus tumbled down the road to bankruptcy, KeyLabs was able to buy back the assets, although Exodus somehow remains an investor and a reseller of KeyLabs services.

For the Olympics, KeyLabs performed the capacity planning analysis for MSNBC. I must say it worked flawlessly, since I never even experienced a slow connection to the Olympic sites.

Satel: This is one of those companies that few people have heard of, and that fact is likely to remain unchanged. After an hour-long briefing with the company, it was still tough for me to figure out what it does, since the response to almost all of my questions was, "we cant comment on that."

Suffice it to say that I believe Satel is a security integrator, that the people at the company know exactly what theyre talking about and are highly skilled, and that theyve never put on a public face before.

Despite the obfuscation that included some obscure references to how Satel got started by securing oil pipelines in the Caspian Sea, I enjoyed the meeting.

In any case, Satel impressed enough people to secure a spot at the Winter Olympics, where it implemented firewalls and antivirus protection for the Olympic network. How it did these things, what it used and how long it took will remain corporate Satel knowledge.

PowerInnovations International One of the wackiest meetings Ive ever had—it was thoroughly enjoyable. This company makes a few boxes that take raw power in any form and spit out a perfect sine wave. The company calls these devices Universal Power Quality (UPQ) systems, and they were in use during the Olympics.

Behind the scenes, the company is researching and developing methods to put power production into homes, turning each family into its own power-generating substation capable of actually generating power back into the grid. No, its not using windmills or solar cells—that would be too obvious. This company is counting on chip-based technology that converts wasted power back into real electricity. Its fascinating stuff.

Altiris: Citius, Altiris, er—Altius, Fortius. Altiris is the software spin-off of KeyLabs, and despite the downs and ups that KeyLabs has experienced, Altiris has been going strong enough to stage an IPO, probably within a month. Altiris makes something it calls full lifecycle management software, a description thats only apt for a company thats about to go public.

In ordinary terms, Altiris makes software for rapid PC configuration as well as a series of other software useful for managing enterprise configurations. In addition, Altiris scooped up Carbon Copy (a program I used to use in the late 1980s) and has branched out to offer help-desk solutions. Integrating help-desk software with PC configuration and management is a great story. Why didnt anyone think of it before?

There were other Utah companies that were interesting as well as entertaining. Among these were NxLight, an amazing company that ensures end-to-end trust across transactions across open networks. Digital Signature Trust has the gargantuan task of trying to get customers to adopt digital certificates, especially as they pertain to electronic signatures. Zions First National Bank funds Digital Signature Trust, so it has a head start, but its got a long, tough road to travel.

Finally, Corda makes the simplest tool of the bunch—interactive charts. Its not the first to do it, but theres no question Corda does it well. At least, E*Trade thought so, since Cordas technology is firmly in place in E*Trades portfolio manager.

These companies only represent a fraction of what Salt Lake City has to offer. The area is also an incubator for biotech and genomic research. Can it be the next Silicon Valley? Who knows? But it sure doesnt look like Silicon Valley.