WTRS Executive Interview

Interview with Robert Eisses President & CEO of Icron Technologies.

March 26, 2007

George: Can you tell us a little bit about yourself and where you came from?

Robert: I am a finance grad out of the University of Manitoba. I went from a finance education into sales after college at Xerox. So I got that sales training, which was a great experience and taught me the fundamentals of business. I learned how to find the value in a product and how to sell that value. But my passion was doing more entrepreneurial type of business, so after Xerox I went deep into startup mode. I worked with a small company who did the paper transfers that you could put in your Xerox machine to make t-shirts. This was a company out of B.C. who was importing the paper out of Japan and selling it to Xerox so it could be private labeled. That was a cool project and was my first taste of a true entrepreneurial startup. But I always liked technology and have had that bent, so I think I understand it really well. I can take a solution that is misunderstood and put in into perspective in terms of how it could be used. So next I went into the satellite communications world. I worked with a company in B.C. that was doing high-bandwidth satellite communications for mining and oil and gas companies in northern B.C. We went from big backend systems into mobile systems. There is a North American Satellite Service called MSAT service. We were the biggest provider of that in Canada, and eventually turned that into exclusive rights for the Iridium service in all of Canada. When that was launched I was the Iridium program manager in Canada and we were the only Iridium franchisee, if you can call it that, around the globe that was actually making money.

George: so you got the rug pulled out from under you!

Robert: Oh yeah, one day we got the call that they were going to turn off the satellite. And we had a few thousand customers that we had to go tell. These guys were using it in mining camps and other remote places. It was great technology, and we found a good niche for it, and we did really well with it. So we sold the company to Bell Canada and since it became part of a big company, I decided to move on. The opportunity in a big company is limited for the things I want to do.

Then I worked in some mobile data spaces. I worked with a company out of Norway called "Pocket It" doing (LBS) location-based services back in 2000 and 2001, when it was really tough to deliver a mobile service because the infrastructure wasn't there to support it. We had some mapping technology that was allowing us to deliver high-quality maps on a small screen. We had a rendering engine that really did a good job. We actually delivered a service in Norway which was a location-based dating service. It was neat stuff that was actually possible in Norway because they had the infrastructure. I spent about a year doing that and spent a lot of time in London, so I have a flavor for the international stuff as well. Then I went to a company that did mobile enterprise data as well. This product effectively delivered a remote desktop experience over a mobile device. The product was a browser-based solution on your mobile device that connected back to a corporate infrastructure. I was with that company about 2 years and then it actually got sold to Citrix, who used it as the engine for their mobile data platform. Then I went back to the satellite world for a little while with a company called Norsat, doing portable broadcast uplinks, and then I got headhunted to come over to Icron in 2004.

My background has always been working for smaller companies in the Sales/Business Development department trying to look at a good technology and figure out where it fits. There are a lot of companies out there that have great technology, but they don't know where to put it or who to talk to in order to put it in the right place. That has been my focus and skill set I have developed over the years. The big appeal with Icron was it was a classic example of a great technology with a company that was basically selling a couple million dollars worth of product, but it had kind of flatlined. It wasn't really going anywhere, the focus was really on a USB extension for CAT5 cable. The company did not really have a path to go beyond that. So when I came in we decided to speed up things and put ourselves in a better position with our technology to do more. And the first move was wireless, which was a natural one. It just made a lot of sense.

George: Yes, particularly in that time.

Robert: It was 2004, Ultrawideband was just "around the corner". Freescale was there with the XtremeSpectrum chipset. There was lots going on around that and it was a good time for us to focus on wireless. Right from the beginning, though, it wasn't just about Ultrawideband. From the beginning we saw a range of solutions out there for wireless USB. Because its not a 'one size fits all' market. There are different applications that need different things, just like USB extension. Some people need to go 2 km with a USB extension through fiber optics, and they will pay whatever for it. So the same thing is going to happen in wireless. You have got Cypress with their WirelessUSB solution for mouse & keyboard, which is a great application and great solution for that problem. You have got Certified Wireless USB using Ultrawideband which will fit one hole as well, and then you have this whole other aspect of connecting USB devices over a bunch of different areas, whether it be long distance over a "g" radio, which is our first solution or an "n" radio solution for higher data rates, or even a point to point custom Long distance solution with an "a" radio. But the nice thing about our products, and the reason why I liked the company initially is that it's a good core technology that can be made so its extensible to a bunch of different platforms. So our real task is to make it better, make it more transportable or extensible to other platforms, show everybody we can do it on other platforms, and then figure out how to commercialize it .

So Ultrawideband was the first wireless technology we chose because it was the 'low hanging fruit'. We had a good time with the whole Freescale project. And its very unfortunate what happened with Freescale. It was a painful lesson, but it was great for us because it really showed us that, first of all, we can do it. And with the right partner it will be really good for Icron long term. But we also know that you have to walk before you run and it may be that you've got great technology, but in this day and age nobody wants vaporware, they want to see you make it work, they want to see product before they pick up on it.

George: Apropos what happened with Freescale, and what it did to Icron, you have done an excellent job at redirecting the company towards a new focus and from the outside we did not see any kind of a hiccup. We saw the management change, but that was all.

Robert: The management change came out, really, because the past president was really an operational guy who actually saved Icron from going under in 2000/2001. The company went up during the bubble-time pre-2000 and then crashed and burned. This guy came in and basically bootstrapped it for a couple of years in an operational mode, did it on the cheap, and then had the foresight to bring me in to kick it to the next level. Then he sort of worked himself out of a job, in a way. On the Freescale side, that was the thing that he thought was going to make the company. Once they fell apart, he was stuck. Sometimes people don't have the vision to see beyond something like that. I said to them, "Hey guys, its not that bad. Its just a customer. It's just one implementation. It's not the end of the world for us." In fact losing Freescale may have been one of the best things that ever happened to Icron from the perspective that we proved that we can do something. Now we have a little bit more control over what direction we put the company in. And we can probably get a bigger piece of the pie along the way as well.

George: It seems like going with the Wireless Ethernet, the 802.11 solution, you have chosen well. Since Ultrawideband was maybe a step too far, 802.11 is maybe a step just right in terms of what the market's looking for.

Robert: Just before we started the Ultrawideband program with Freescale, we actually had started development on an .11b radio. We actually had a little development program that we diverted from once we heard about Ultrawideband because we thought if they have that data rate, why don't we just go that route. So 802.11 was always in the plan. I think Ultrawideband holds a great promise for certain applications. Its like any technology: there is not any one technology in the world that fits all applications, no matter what it is. Everybody tries to capture everything under the broad umbrella of Ultrawideband. They were talking about it being the thing for all video, all USB, all Firewire, whatever. No its not. It doesn't work for that kind of application. So let's pick apart what is good for us from what isn't good for us and decide where we can fit. That's why I want to make our solution as extensible to other platforms as possible. So we start by doing product with our own technology, but also evolving our own technology to make it better. With our current product we are in FPGA, and we have an active ASIC program going on. So the goal is that by the fourth quarter of this year we will have our own ASIC that will drive our solution cost down considerably for both wired and wireless implementations. Then we will really start to hit the price points people are looking for.

George: That's a key point. This is not just a wireless solution. And maybe I should just circle back around and take it one level higher: Is there something that you want to say specifically about Extreme USB?

Robert: ExtremeUSB is a technology that doesn't just do USB extension, but it really extends or enhances USB across a broad number of platforms. It really extends the useful range at which you can use USB 1.0 or 2.0 over a variety of solutions in a variety of environments. It also isn't just about wireless. It's about taking a device and giving you a tool to put it wherever you want. Whether its long distance, wirelessly, or through a Powerline, CAT5 connection, or a fiber connection. Whatever the case may be, ExtremeUSB is a bridge that, if you take a simplistic look at it, enables you to connect natively while still supporting the standards. On that topic, we strive to support the USB standard in all our implementations, so for example our USB 1.1 product is a compliant product. Our 2.0 products are designed to be compliant over CAT5 or fiber or wireless, it doesn't matter. So we preserve the integrity of the USB 1.1 and 2.0 specification by delivering this port to your device. It delivers 500mA, it supports 'Isoc', bulk, control and interrupt and works with all operating systems as a standard product. That seamless functionality is our goal and our real path for Extreme USB.

George: So really all you have done is to cut the cable in between. You can connect with any other kind of cable you want. I know I make it sound a little bit too trivial. From the standpoint of thinking about the devices its just a very simple concept.

Robert: Yes. Basically you give us a data stream and we can manage it. Our technology effectively preserves the USB host and device communication over latency-intolerant scenarios. There is a limit to how much latency we can do, if we go over satellite, for instance, we may have a problem, and although we have been asked to do that. I can't tell you the application.

George: They haven't asked you to drive a rover on Mars or anything.

Robert: No, not yet. We do have one application that is kind of interesting. Its for an offshore oil rig that is effectively a web cam that goes on the end of a 2 km spool of fiber optics and is used for monitoring the actual drilling by the oil rig on the way down through the sea floor. It's a USB device and they just extend the connection with our stuff. Its one of those far out, neat applications that people don't often think about.

George: I keep hearing the oil theme coming around.

Robert: With USB being used in more industrial applications, that's why our growth in our wired business has been pretty strong. We do some stuff with some mining companies, for example, with applications whereby they are managing and monitoring conditions in a big production facility. They have web cams that are set up to monitor some tailing ponds or tanks, going back to the control center, using our fiber optic products. Another one is on conveyer belt system coming out of a mine, some really neat applications. In that heavy industry market we actually do quite a bit of business.

George: For Icron's business, is it tilted heavily towards heavy industry, resources, area?

Robert: Not really, again, the nice thing about USB is that, even though it started out as a desktop activity, all PCs and servers are becoming outfitted exclusively with USB interfaces. So in the industrial environments where the old connectivity was RS232, they now realize they have to convert to USB. So there is just more and more interest in that application. This shift has only happened in the last couple of years as industry and the commercial environment started to move that way.

Another example is the KVM space: In the past there was other ways to extend a PS2-based keyboard and mouse for remote desktops, and all the KVM companies had a solution for keyboard and mouse extension. But they really don't have a solution for true remote desktop extension, which is more than just that keyboard and mouse. Now you have to have a USB port there so you can plug in your flash drive, or your camera, or a web cam, or whatever else and deliver that true desktop experience, while still having the processor in the back room. That market is really starting to heat up, so we are already talking with all the different KVM companies in that environment.

We also have a couple of big customers in the medical imaging area. Companies like Siemens and Honeywell and other guys use our stuff in their medical imaging systems, where some of the devices are actually USB-based that are used in the treatment room. They want the processor and everything else to be in the back room because of the noise and interference and that sort of stuff. So they are using our extenders to extend that device in treatment environments.

So our customers are really varied from heavy industrial, to industrial automation with customers in Germany in the remote terminal business for the factory floors, we have got medical imaging, we have got KVM, and then we have a lower end product that does 50 meters, USB 1.1 for home office applications. So it really gets the whole gamut of applications areas. And again, all of them seem to be on the rise in terms of where the opportunities are.

George: So do you think that the adoption of your product being driven primarily by RS232 replacement?

Robert: Some of it in the industrial world, for sure. That plug and play aspect of USB is really quite nice. That along with the servers and everything else going strictly USB, and its accepted now as a robust technology. The industrial guys don't like to change unless its proven. It better work, and it better work well.

George: They are even more conservative than IT guys.

Robert: Yeah, especially when you are talking about manufacturing facilities. We have some customers there that are doing some pretty high end products, in automotive factories and other stuff, and they have to make sure that the stuff is bullet proof before they will use it. The USB device has to be bullet proof, the server and the whole driver stack in USB has to be good, and the media to transfer it, which is where we come in, has to be bullet proof as well. We are used in a lot of mission-critical type applications.

This is just one of the things that is adding to the whole growth of USB. There are billions of devices out there right now, which is a pretty hard thing to count. What we are finding is that people just want more options all the time. One customer can have four different ways that they want to implement our product. Maybe a little bit of CAT5, maybe a little bit of fiber, maybe a little bit of wireless, and maybe Powerline, because each of the applications may be slightly different. The nice thing about USB 2.0 is that, yes it's a 480 Mbit throughput, but the reality is that most devices don't need that kind of throughput. If you are given 50 or 30 Mbit per second, its probably just fine most of the time. Off a flash drive you can stream a movie at 10 Mbit per second. Off a DVD player its probably 10-15, or so. Unless you are doing large file transfers on a big hard drive, you are not likely to need all 480 Mbits. That's the nice thing about USB flexibility: it's a nice big pipe; each application will use whatever they need out of it.

George: How did your relationship with Freescale begin?

Robert: So in the Freescale world, what happened was that I contacted Martin Rofheart one day. I sent him an email that said I would like to talk to you because I have a technology that I think could help you to get to a wireless USB solution quicker. And the feedback was, yeah, sure, we don't believe you, so I said, tell you what, you just give us a couple of radios, and we will build it for you. So we got radios from them in a February timeframe, and we had a working solution 6 weeks after that with no support from them. We showed it at the WinHEC event in 2005. We were showing webcams, everything right out of the box. Then six weeks later we had a first prototype done and a small board. In 12 weeks we literally had the prototype for what Belkin was originally going to build.

George: What you have done at Icron is developed some intellectual property that, to the PC, looks like USB. And on the other end, you customize it with whatever physical channel you are going to run across. Where is the uniqueness in Icron's technology?

Robert: Our intellectual property, if you look at our patents, is really about enhancing the USB protocol. We deal in USB traffic levels, so we are not changing it. We are taking pure USB traffic as it comes out of the PC from the host, and to the host, our 'LEX' looks like the device, and to the device our 'REX' looks like the host. In between that all we are doing is really buffering or bridging that USB connection over a latency-intensive media. So from a USB perspective, we are just talking USB.

George: so there are no new drivers.

Robert: That's right, no new drivers to run our solution, so from the user's perspective we really just look like a cable. Most of our solutions have hub chip in the remote end, so when we plug into the PC, we just show up as a generic hub. But if we took the hub chip out, and we do have one product that doesn't have a hub chip, you actually wouldn't see anything until you plugged your device in, so it actually looks like a naked cable. So we are not converting anything into our own protocol, we are really extending the USB protocol in its natural format. A lot of people have a hard time getting their head around how we do it. We just "NAK" the host to say yeah, that device is still here, and don't worry, the information is coming, and then we pass it through. There are very tight timing instructions in the USB protocol and we just preserve that communication link between the host and the device. That is how simple it is really. Our original design was for USB 1.1, and in our original patent filings talked about over a variety of media including CAT5, fiber, and wireless. And then we just enhanced those patents with new filings around USB 2.0, and mass storage and other enhancements. It also works across all platforms, Windows, Apple, Linux, whatever. In fact, SGI builds our stuff into one of their ONYX workstations. So its that robust that they are putting it into million-dollar workstations, without any tweaking.

Another interesting feature and one thing about this solution that nobody thinks we can do is support for isochronous communication, but in our USB 2.0 extender we do full 480 Mbit throughput for 'iso' cameras. These are high end, commercial cameras that are using our extenders because they delivery full 'iso' over the media. This is not an easy task to do; and now we are doing it over wireless as well. People say, 'wow, that's pretty impressive.' We think it is, but it really just shows the robustness of our technology.

Robert Eisses, President and Chief Executive Officer of Icron Technologies ( Mr. Eisses has more than twenty years of experience as an entrepreneur and a key member of senior management teams at a number of technology product and service companies. He transitioned to CEO in September 2006 from the role of Vice President Sales and Marketing for Icron, which he held since June of 2004 during which time revenues grew over 45% annually.

Robert's background includes a B.Comm in Finance from University of Manitoba, a number of years at Xerox Canada and Senior Sales and/or Business Development roles at Infosat Telecommunications, Pocket IT, Motivus and Norsat International.

Icron® is a leading designer, manufacturer and marketer of innovative USB and DVI extension solutions. Icron's extended range solutions solve the distance limitation of USB by increasing the maximum range of USB from 5 m/16 ft to over 2 km/1.24 mi.

Founded in 1998 and based in Vancouver, Canada, Icron is listed on the TSX Venture Exchange.

More information about Icron Technologies Corporation here...

This interview ran in our March 26, 2007 newsletter issue.