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ARCHIVED  October 22, 1999

RockySoft moves beyond HP walls

Hatched at HP, incubated in Fort Collins, RockySoft takes flight

FORT COLLINS — Kathy Kregel, director of the Visual Business Incubator in Fort Collins, went to work one day and discovered on her doorstep a business plan. Her first thought was, “Hmm, this is an unusual approach.”

What she held in her hands was the concept for RockySoft Corp., a business conceived by Larry Watson, then an employee of Hewlett-Packard Co. Placing the business plan, which took a year to write and rewrite, on Kregel’s doorstep seemed like a good idea at the time, Watson said. “I didn’t know the official mailing address. Plus, I live in town, so it was easier to run it over than mail it to her. I didn’t have her phone number. I got her name from an article.”

That was in January. Today, Kregel says of RockySoft: “They’ve really been our shining star.”

RockySoft sells a product called Real Time MRP, a faster, more reliable version of MRP, which stands for materials requirement planning — an application widely used in the manufacturing industry. “Everyone depends on it,” Watson said. “It’s the lifeblood of manufacturing.”

MRP is most handy for dealing with “What if?” questions. For example, if a salesman calls and asks if 18 more widgets can be built by a certain date, MRP tracks all components, subassemblies, lead time and everything else involved in the manufacture of the product to determine if the manufacturer can meet the salesman’s request. However, with a typical MRP application, an answer is usually not available until the next day, because of the complexity of the software program.

Real Time MRP, on the other hand, provides an answer almost immediately. “What if?” questions can be answered while a sales representative is still on the phone.

Watson developed the software program five years ago while still employed at HP, where he worked as a supply-chain analyst and programmer. Since that time, the product has been installed in 11 HP divisions. It has been broadly applied to numerous business environments from build-to-stock products to highly customized build-to-order systems.

Jim Heckel, business systems process engineering manager at Hewlett-Packard in Greeley, has been using the product since December and is especially pleased with the “what if” capabilities.

“That’s something we use quite a bit to determine scrap exposure, if things are going on in respect to obsolescence of products, and so forth,” Heckel said. “We use it for customer requests, if they ask for certain delivery of a product. We do a “what if” simulation to see what materials would need to be issued to expedite the product.”

Bob Crandall can’t imagine doing his job without it. Crandall is market demand planner at HP in Loveland, which will become part of HP’s new offshoot, Agilent Technologies Inc., in November. He has been using Real Time MRP for two years now.

“Real Time works every time,” he said. “If I feel I need to make certain changes on production lines that I manage, I can simulate (those changes) by placing them in planning buckets. Click one button, and right away it tells me if there’s a problem, and if there are potential materials shortages, and which ones are the problem.”

To do the same thing without Real Time MRP would not be much fun, Crandall said. “It would entail calling a whole bunch of planners, making rough calculations and calling buyers for their knowledge of ongoing plans,” he said.

Although the product has won favor at HP, the company wasn’t interested in taking it to the next step and marketing Real Time MRP outside the company. The argument against it, Watson said, was that it would reach only a $20 million marketplace, and HP is typically interested only in projects that have a potential market of $200 million or more.

“The other problem they had is they’re turning into a hardware company, and they don’t focus much on software,” he said.

That’s when Watson decided it was time to fly the HP coop, where he’d been for 20 years, and start his own company to sell the product he designed. First, however, he had to spend a year dealing with lawyers to get the rights to Real Time MRP. He is one of a handful of entrepreneurs who have started their own companies based on products designed at HP.

“It is rare, but it does happen,” he said.

With the business plan in place, the next step was procuring capital to the tune of $1.5 million. Kregel of the Virtual Incubator said that RockySoft was able to obtain capital quickly because of Watson and his expertly written business plan. Though most of the capital available through the Rockies Venture Club was sewn up by the time he addressed an RVC meeting in Windsor, Watson had everyone there enthused about the company and its prospects, Kregel said.

Now that the company is going forward with its marketing plan, it finds the timing is both a blessing and a curse. Due to Y2K and potential computer problems, many companies are postponing new software purchases until after the first of the year. However, now that most companies have completed tests and updates for Y2K, “there are a lot of software people sitting around to evaluate new things for next year,´ said Bob Vinton, RockySoft chief executive officer. “That’s important why we get launched in September — to get information in front of them,” he said.

That’s right, Vinton is the company CEO, not Watson.

Watson explained. “I had the opportunity at HP for management training, but I chose not to. I chose to take the technical career path. If I made choices back then, then why would I choose to do it differently now?”

Watson’s search for the right CEO was fateful. A salesman hired by Watson told him about Vinton, while at the same time Kregel was telling Vinton about Watson. Vinton, who worked with both a semiconductor company in Fort Collins and a software company in Phoenix, started with the company just after July 4 — in time to help settle RockySoft into its quarters at the Center for Advanced Technology.

RockySoft has five employees: two sales representatives and three “techies,” including Watson. A few contract people also work with the company, and growth is anticipated.

A year from now, RockySoft is projected to have 12 to 13 employees and in three to four years, be a $30 million to $40 million company.

“Larry thought the market to be $20 million. That’s the size in the most narrowly defined condition,” Vinton said. “After we go beyond that and bring in other manufacturing markets, it will be quite large.”

The company plans to produce additional products as it goes forward.

Hatched at HP, incubated in Fort Collins, RockySoft takes flight

FORT COLLINS — Kathy Kregel, director of the Visual Business Incubator in Fort Collins, went to work one day and discovered on her doorstep a business plan. Her first thought was, “Hmm, this is an unusual approach.”

What she held in her hands was the concept for RockySoft Corp., a business conceived by Larry Watson, then an employee of Hewlett-Packard Co. Placing the business plan, which took a year to write and rewrite, on Kregel’s doorstep seemed like a good idea at the time, Watson said. “I didn’t know the official mailing…

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