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Wednesday, April 21, 2004 - Page updated at 12:00 AM

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Armed and dexterous: Bothell firm ready to prosper from tech's 'perfect storm'

Seattle Times Eastside business reporter

Dexterra


Headquarters: Bothell

Employees: 60

Management: Rob Loughan, chairman and chief executive.

Product: Develops software that gives customers access while in the field to critical information stored in back-end office systems.

Financing: Second round $16 million for a total of $23 million.

Investors: Canaan Partners, Motorola Ventures, Intel Capital, Sigma Partners and Sagus Capital.

Converging directly upon Dexterra is the perfect storm.

The Bothell-based startup develops software that gives its customers access to information stored in computer databases while they're in the field, and it thinks the timing is right for its business.

Similar to the book and movie, "The Perfect Storm," where three weather systems intersect to create one giant storm, wireless networks have improved and handhelds have become better and cheaper, creating favorable conditions for Dexterra, said Robert Loughan, co-founder and chief executive.

He calls it "the perfect storm" — of opportunity, not tragedy.

As if to make the point, Dexterra plans to announce next week it has raised $16 million in a second round of funding.

The round was led by Canaan Partners of Menlo Park, Calif., along with two new investors, Motorola Ventures and Intel Capital. Sigma Partners and SagusCapital, which invested in the company's first $7 million round, also participated.

Dexterra's software allows employees in the field to access information from systems built by Siebel Systems, Oracle, SAP, PeopleSoft and other customer-relationship management (CRM) software developers. Dexterra accomplishes this by using a common computer language and Microsoft .NET technology.

The result is that a repair worker, for example, can arrive at an office where a printer is broken and use a Pocket PC handheld computer to see if the right parts are available, check the warranty and complete the billing.

Until recently, Loughan said, wireless networks and devices weren't capable of handling that much data to make such a system practical.

John Balen, a general partner at Canaan Partners who is joining Dexterra's board, said the company is well-positioned.

"Now with standardized platforms that are cheaper to implement, the timing is right," he said. "All the pieces of the puzzle are falling into place."

Loughan said the $16 million will be used to expand on what the company has accomplished.

Dexterra has lined up some big customers, including NFS, or National Filter Service, which uses field workers to change air filters; the U.S. Department of Homeland Security; Ikon, the office-equipment company; T-Mobile; and Motorola.

To overcome any customer hesitancy in dealing with an early-stage company, Loughan has assembled a team of partners to do the selling. They include Microsoft, Cap Gemini Ernst & Young, Peak, AT&T Wireless, Intel and Vodafone.

A common scenario is one in which Dexterra provides the software, Microsoft provides the .NET platform, Cap Gemini integrates the system and one of the wireless carriers provides access.

With such large players, Dexterra, in many respects, sits in the background during a sale, Loughan said.

"We aren't the center of it; we are a piece of the pie," he said.

But Dexterra isn't the only company to recognize opportunity in mobile work forces. Competition is rising.

Loughan guesses that there were five players in the arena when he started Dexterra more than a year ago. Three have since vanished, he said, but they've been replaced by 50 others.

The largest competitors are enterprise-software companies like Siebel Systems or Oracle. Other competitors are those that develop a product internally for their own work force. The third consists of other players in the market.

Bellevue-based Onyx Software, which offers a mobile component to its customer-relationship management software, has two offerings.

But Bryan Smoltz, Onyx's director of product management, said wireless capability is compelling only for certain clientele. Many Onyx customers don't see a compelling return on investment, he said.

Seattle's Entellium, which recently received $2 million from Ignition Partners in venture capital, says it is in the mobile customer-relationship management business. But its focus is less on enterprise software on handheld devices and more on its hosted-CRM system in which users connect through the Internet.

Jonathan Roberts, a partner at Ignition, said they are complementary businesses. As a former Microsoft general manager who focused on the Windows CE platform, he said Dexterra is a model for Microsoft's Pocket PC and platforms.

"They are a poster child because they did a nice job connecting Windows CE devices to back-end office systems," he said.

Loughan started Dexterra in late 2002 after moving to Bothell from California with his wife and 2-week-old twins to be close to Microsoft.

Dexterra has since outgrown its headquarters and today has 60 employees. It expects to double that number by year's end and do four times as much business this year as last.

Loughan declined to give specific revenue figures.

But he knows what it takes to grow a large successful company. He co-founded Octane Software, which was acquired by San Mateo, Calif.-based E.piphany for $3.2 billion in stock in May 2000.

Before selling Octane, Loughan worked at Scopus Technology, a CRM software company. Started in the Bay Area, Scopus merged with Siebel Systems in 1998.

When it comes to Dexterra, Loughan said, "I'm going to take it all the way."

Tricia Duryee: 206-464-3283 or tduryee@seattletimes.com

Copyright © 2004 The Seattle Times Company

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