Like most other paging companies, PNI Technologies Inc. is working to pull itself out from under the shadow of the flagging paging industry. But while most carriers are tying to distance themselves from everything paging, PNI is redesigning technology it created for its paging network in an effort to expand into a variety of other wireless areas, including the hot unified-messaging market.
“We do some remarkable things in a very small box,” said Mark Dunaway, the company’s chairman and chief executive officer.
The small box is the company’s Platform1 product, an intelligent, high-speed modular switch that was initially designed to improve the efficiency of PNI’s paging network.
“We capitalized on a lot of the work we had done,” Dunaway said. “Our customers began to ask if we would make those products commercially available.”
PNI, formerly Preferred Networks Inc., got its start providing unbranded, wholesale one-way messaging network services on the East Coast. The business was good until the demand for paging began to dwindle, leaving PNI scrounging for profits, along with the rest of the nation’s paging carriers. When PNI’s customers began to ask about some of the technology it had developed to enhance its network, company executives sat up and took notice.
In an effort to save itself from the dark well of today’s paging market, PNI executives decided to begin developing the company’s proprietary technology to make some money and expand out from the paging market.
The change allows the company to move from a carrier to a carrier/equipment provider, Dunaway said.
PNI’s Platform1 is a modular switch that uses the company’s call algorithm to route T-1 circuits or individual telephone numbers to multiple servers and terminals. The switch works at high speeds and on an as-needed basis.
“We just think it’s a quantum leap,” Dunaway said. “That piece of business has me very excited.”
Dunaway said the switch is perfect for companies looking to offer unified messaging services. It uses PNI’s patented call-routing algorithm to send calls to the appropriate terminal equipment, such as voicemail, fax server or paging equipment. The switch also has Internet service provider, paging and personal communications services capabilities.
“There’s a very broad market, and it just fits in the heart of unified messaging,” Dunaway said.
Unified messaging will be a major part of the wireless future, and PNI is “well, well” positioned to take advantage of it, Dunaway said.
But PNI isn’t quite there yet. It’s still making the transition from paging carrier to equipment provider, and the transition isn’t going very well. PNI’s revenues for the nine months, ended Sept. 30, 2000, were $11.1 million, way down from 1999’s $13.2 million. The flagging revenues are due in part to a slowing of PNI’s network services business, on which the company still heavily relies.
As part of its transition strategy-and in an attempt to bolster its dwindling coffers-PNI sold off some of its subsidiaries in 1999, including its product repair company, EPS Wireless Inc., to Celestica Inc. for $14.9 million and its Preferred Technical Services Inc. to an affiliate of Saratoga Partners for $4.5 million. The move allowed the company to pay off 70 percent of its debt. However, in the third quarter of 1999, the company also had to resort to layoffs to continue operations.
PNI’s main problem lately has been its equipment rollouts. In addition to Platform1, PNI offers an Internet router and a messaging and voicemail platform, but both are recent introductions have seen delivery delays.
In a statement, the company warned that it had not yet “achieved significant sales” of its equipment products, and so far its business had exceeded its revenues because of the rollouts.
However, Dunaway said all of the company’s equipment products are out of beta testing and are ready for delivery.
“We’re taking orders now,” he said.
Even though PNI is currently focused on pushing its new products, that doesn’t mean it has forgotten about its network services business.
“Over time we’ll focus energies in both areas,” Dunaway said. “We can’t just walk away from our (messaging) business.”
