Somewhere in Cambridge is a computer reseller with a past he'd rather forget. He's a man who, 10 years ago, employed a consultant with a big idea - why not sell network software instead of metal boxes? The reseller thought the idea sucked. So the salesman went off and founded his own company instead. Last year it was sold for #3,150 million.
Bit of a choker for Mr Reseller. But for Peter Dawe, the salesman in question, the incident was the start of an adventure which not only made him pots of money but also put him at the heart of the social phenomenon of the late 20th century - the Internet.
Dawe's company, Unipalm, proved extraordinarily effective at selling software. And when the need for local area networks gave way to a desire for wider, public communications, Dawe created a new business and called it Pipex. Today Pipex is, with CompuServe, the largest Internet service provider (ISP) in the UK.
Not bad for a former council accountant. But you suspect, talking to Dawe, that even in his early days as a working man he was destined for more than double-entry book-keeping: "I told councillors the truth and they didn't like it. I was an oik, always in trouble."
After the inevitable departure from accounts, Dawe began a spell in management services and, as a consequence, IT consultancy. Through advising businesses on computer systems, he became his local reseller's best salesman (unpaid).
Obviously, this couldn't go on so he switched to full-time employment with a reseller. While he was there he designed a Sun 3 clone and it was this initiative which made him think about TCP/IP network software and prompted the episode described in the introduction.
Going it alone was tough. Dawe winces as he recalls his first seven months as MD of Unipalm (assets - telephone, Amstrad PCW, Vauxhall Astra). "Anyone who thinks I was in the right place at the right time was not there during those seven months," he says. But then fortunes changed. Unipalm's competitors were giants - 3Com, Netware, Decnet, SNA - but their solutions were designed for one protocol only. Unipalm worked across platforms. Also, Dawe recognised his products were mission-critical so he never compromised on service.
Consequently, Unipalm grew and became market leader in the TCP/IP sector.
Even when rivals undercut him, Dawe held his nerve on price: "It's not about price, it's about technical support - and people are prepared to pay for it. After all, you can't undercut Mercedes."
But it couldn't go on forever - especially with NetWare preparing to launch into his market with Portable NetWare. So Unipalm looked to evolve into WANs. Well aware of the shortcomings of the rudimentary email systems of the time, Dawe focused on the Internet as the possible answer. He set Unipalm up as a phone company and offered businesses Pipex, a 64Kb leased line for #12,000 a year - #88,000 cheaper than its only rival, Kent University's UK Net. The university was a bit miffed. Dawe couldn't see why. He says: "They considered us predatory but predatory pricing is undercutting by 20 per cent. We were clearly after a new market entirely."
The day Pipex opened for business in June 1991 was a disaster. Nobody turned up. Indeed, it was two months before anyone signed but Pipex was soon bleeding money from a handsomely profitable Unipalm. Fortunately, the public flotation which followed came at a time when, according to Dawe, technology shares were "in". It netted #5 million.
Pipex's policy at this time was to leave the home user market to others.
"The money was in corporates and the fees we were charging allowed us to keep up our service standards. We could never have supplied these service levels to home users," he says.
Pipex stuck with corporates despite Dawe's unwavering faith that the Internet would proliferate in homes too. "Right from day one I thought every PC would be connected. It just made sense. A connection costs less than a fax - and faxes are universal."
So Pipex stayed out of the dialup sector and even encouraged others to enter it. This was a mistake. "I still think we were right to wait but we were wrong to help others because eventually they would attack our corporate business," says Dawe. "Then there was cash-flow. Home users at that time paid a year in advance. At #120 each it makes no end of difference."
Sure enough, other ISPs, Demon in particular, snuck up on Pipex and offered real competition. But Dawe never abandoned his primary business tenet - quality is worth paying for. When Pipex Dial launched in 1994 it was, at #15 a month, 50 per cent more expensive than Demon's #10 benchmark.
Dawe says: "I still contend that if you want to build a service with no engaged tones and an immediate link at full speed, you can't do it for less than #15 a month. But I also believe that people are prepared to pay that much. Also, #15 gives you the flexibility to market your service and offer discounts through the channels."
He was right. Pipex Dial stayed ahead of the game by offering new services such as free Web space and email, which is readable via Web pages. In October this year the company announced plans to operate at 56kbps in a linkup with US Robotics. Such initiatives helped Pipex Dial attract 30,000 subscribers and made it the largest homegrown ISP. Last year the company ensured its long-term stability in a u150 million merger with US-owned telco UUNet.
Shortly after the sale, Dawe sold all his shares and set up an office in Cambridge from which to pursue ... well, anything that interests him.
Inevitably, he is still regarded as a guru of the Internet. Fortunately, he's more than happy to express his opinions on the subject.
The current focus of Dawe's attention is the monitoring initiative known as Internet Watch - formerly SafetyNet. He regards his controversial anti-illegality gambit as "repayment for the good times the Internet has given me". However, his new role as figurehead of the organisation is a hot potato that few people would want to carry.
"During my time at the Internet Service Providers Association it was clear that the police and government would rather not get involved in policing the Net and the ISPs didn't want to acknowledge a problem," he says.
Finding himself "unemployed" for the first time in many years, Dawe conceived Internet Watch as an initiative which would put the responsibility back in users' hands: "The Catholic Church may be big enough to do the job but it's not going to. This is the only way."
Internet Watch is designed to hinder rather than stop illegal content and it relies on the public to monitor information. Anything questionable is reported to Internet Watch, which then clarifies the legal status of the content. The next stage is to notify the supplier of the material and request its withdrawal. As a last resort, the police are invited to bring a prosecution.
It's far from perfect, of course. If Internet Watch succeeds in closing down a site or newsgroup which turns out to be within legal limitations, the spectre of litigation looms - "Believe me, I'm worth suing," says Dawe. Then there's the worry of retaliation from vindictive sources. Dawe declines to describe how they might do so in case seeing it in print gives people ideas.
Despite its many shortfalls, there is substantial support for Internet Watch. Something needs to be done - not least for publicity's sake - and you can sense the relief of the Internet "community" that someone is making an effort. Indeed, Dawe reports that all the ISPs are behind him and says that within three weeks of drafting his proposal, two ministers had already studied its content.
"It's such an exaggerated problem. So really, our success will be measured by how much we can keep it out of the press," he says.
Internet Watch is not yet operational. However, Dawe does not expect to be involved for long. His attention is already turning to other projects such as bidding for a community radio licence in Cambridge. Looking further to the future, he expects to be closely involved with the development of electronic cash, or e-cash, whose arrival he regards as inevitable. Indeed, he has an patent application pending for a tool which would allow the taxation of digital transactions.
"I like using the Net but I like having roads, hospitals, nurses and police as well," he explains. All very laudable, of course. But Dawe realises the consequences of his actions. "It could make me the most unpopular man on the planet," he admits. It must be nice to know, though, that after all this time he may be able to give something back to accountancy. Even electronic accounts have to be audited.
DAWE ON INTERNET ADVERTISING
"I think people who put ads on Web pages are idiots. It's not a broadcast medium. It doesn't work. However, the Internet is perfect for interactive stuff.
I read somewhere that 50 per cent of ads in the Economist now contain a Web address. The idea of reading an ad, wanting to know more and visiting a site to get the information you need is great - and very smart."
DAWE ON THE WEB
"The Web hasn't made any difference to the expansion of the Internet. If you look at the overall growth curve there's no kink when the Web was introduced. Obviously, it helped by generating hype and bringing in new companies. But I still maintain we were winning with email."
DAWE ON TELECOMS
"Ask any economist and they'll tell you that large industries can only support five major players. This is the way the Internet is going.
"In a few years' time the telcos will run the show. But at the moment they're being incredibly inefficient. They could use ADSL to deliver 2Mbps to the home at the same price as analogue voice circuits. That they don't is a crime.
I see ADSL as transforming things but only the telecoms companies can do it. At present, neither BT nor the cable companies are prepared to break rank."
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