The world is getting smaller. That’s the opinion of a group of U.P. residents—people who, ten years ago, would be living in California or New York City or Silicon Valley in order to work in their fields.
Telecom advances and the increasing number of Internet services have brought high-tech to just about every corner of the world, and the U.P. hasn’t been left out. High-tech is moving in thanks to a willing and trained workforce, broadband Internet connections and the economic advantages offered by various state and federal programs.
Take B3 Computers. Formed in 1996, B3 was rated the eighth leading computer systems builder by CRN magazine. Originally located in San Diego, B3 made the move to Marquette County after realizing that it made good financial sense.
“Venture capitalists don’t want to invest in the commodity industry,” said Bill Carr, CEO. “We wanted to raise funds for development, and that was impossible do while located in a high-cost area like California.”
B3 started to look at enterprise zones—areas that have been targeted for revitalization through tax and other incentives—and eventually found themselves discussing the economic and physical advantages offered by the former K.I. Sawyer Air Force Base.
B3 moved to K.I. Sawyer in April 2004, and was back to work building computer systems by June 2004. Unlike Dell and other direct-to-consumer computer manufacturers, B3 targets computer resellers as their primary clients. They offer a unique build-to-order manufacturing process, as well as a configurable Internet-based point-of-sale system. Even a small organization can use B3’s tools to create a Web site where customers can build their own customized computer system, compare prices and features, check on stock status and order the system. B3 prides itself in speed—most systems are built and shipped the same day they’re ordered.
B3 doesn’t limit itself to assembling third-party computer parts.
“We’re doing development on the form factor of the desktop computer itself,” Carr said. “We want to clean up the desktop by offering smaller, stylish components and going wireless wherever possible.”
B3 is partnering with local firms to manufacture computer cases and aluminum housings.
“They look good, and we can get different shapes and sizes with an unusual sheet metal look,” Carr said. “It looks more like a high-quality home entertainment system.”
Also on the horizon are innovations in flat-panel technology, researched and developed by B3 engineers. On the software side, B3 offers the Windows operating system, and recently signed a deal with Sun to offer Sun Java Desktop on Intel-based computers.
“We want to give people the stability of a Linux system with the ease of use of a Windows system,” Carr said.
B3 currently employs thirty-five people and plans to expand to fifty within the next few months.
“We’re really pleased with the talent level we’ve found locally,” Carr said. “One of the reasons we wanted to move is that we wanted to pay our employees a living wage. We couldn’t do that in San Diego. It doesn’t feel good to have employees who will never have security.”
B3 manufactures approximately 3,200 computers every month, both desktop and notebooks, and reports annual revenues of $9 million.
Security also is one of the words tossed around at KliniTek, Inc. Hospitals, clinics and physicians’ offices struggle to keep up with the technology demands that come with modernized health care. Sharing patient information accurately, securely and affordably is a challenge that every healthcare provider has to face.
That’s where KliniTek comes in. Formed in 2003 by a partnership that includes Marquette General Hospital, KliniTek’s goal is to create a new suite of clinical software applications.
“We’ve seen what’s out there,” said KliniTek CEO Jim Sundberg. “We think we can do better.”
The idea for KliniTek grew out of Marquette General Hospital’s struggle to find a feature-rich, enterprise-level software solution that was customizable and affordable.
“We tried some of the commercial products on the market, and decided it would be better to build our own,” Sundberg said. “And, if we’re going to build our own, it makes sense to market it to other hospitals as well. We have the clinical, administrative and technological expertise to create an application that can compete on a national scale.”
MGH thought so as well, and signed on as a development partner. KliniTek’s first goal is to develop a suite of software applications specifically designed for MGH. The healthcare system in the U.P. is indicative of the growing diversity of healthcare providers and facilities. In the past, patients wanting the highest quality health care often had to travel to large hospitals located in metropolitan areas.
Today, that same patient can get the same quality health care at local clinics, even in rural areas. More and more physicians are offering clinics on a rotating basis far from their home office, bringing specialized treatments to areas that may not support a full-time specialty clinic.
One of the challenges with providing this level of service is information management. Patient records must be available on a wide scale. Healthcare providers need reference libraries and administrative information, even when they’re far from their home office. All of this information must be secure and accurate.
KliniTek’s vision is to provide an enterprise software solution that encompasses both existing software packages data and new custom-developed applications. This new suite of applications will use Internet and Web technology to simplify all the administrative and clinical requirements of a modern healthcare system.
Another aspect of the growing technology base in the U.P. is Web design companies like K2 Media Labs and International Software Engineering.
Created in 2001, K2 grew out of the Web site consulting businesses that owners Kevin Maki and Kevin Swanson operated on a freelance basis.
“I always wanted to have my own business, and with the success of a few small projects we just decided to go for it,” Swanson said. “The Marquette area has a lot to offer a small, growing business. We were able to get started on a shoestring budget. We flew by the seat of our pants for the first few months, but we worked hard and it’s been a success.”
One of the reasons K2 has been successful is the range of services they provide. Unlike traditional Web designers who may only offer Web and technology solutions, K2 offers photography, video production, logo design, brochure design and product packaging design in addition to Web site design and programming. They’ve created Web sites for companies throughout the Midwest and as far away as North Dakota, and hope to increase their presence as a regional design service. They offer services beyond the simple “brochure” Web site, including e-commerce and data collection solutions.
International Software Engineering also provides Web design and e-commerce services, as well as more traditional software design. In business for ten years, the company employs five people, including both programmers and graphic designers.
“We’ve done projects in China and Germany,” said John Mixter, senior engineer. “The Internet and the Web make a small company like ours able to accept projects from anywhere in the world.”
Internet and Web technology also is key to the high-tech industry in the Keweenaw Peninsula. Visitors driving through Houghton may notice the historic sandstone powerhouse building located on the Portage Canal. The powerhouse is one of three locations designated as a SmartZone by the state of Michigan and overseen by the Michigan Tech Enterprise Corporation (MTEC). Michigan SmartZones are collaborations between government, educational institutions and industry intended to promote technology-based businesses and jobs. The Houghton SmartZone is the only SmartZone in the U.P.
“The U.P. needs a cultural shift,” said Alan West, MTEC CEO. “Residents need to realize that anyone can be an entrepreneur.”
The Internet has made it so that the U.P. is no longer a remote area, and high-tech businesses have just as much a chance of success here as they do anywhere else.
“The culture here is one where people are reluctant to publicize what they’re doing,” he said. “I’d like to change that.”
In the two years MTEC has been in operation, West estimates that the organization has helped more than 100 entrepreneurs develop business plans, find sources of capital and effectively market their products.
“One story I hear over and over is someone with a great idea, but no clue how to actually create a business and market that idea,” West said. “That’s where MTEC and the SmartZone come in.”
MTEC’s goal is to create 550 high-tech jobs in the U.P. in the next fifteen years.
The Houghton SmartZone physically consists of about 25,000 square feet of office space, located in the powerhouse, the old hospital in Hancock and the Advanced Technology Development Complex at Michigan Technological University. West believes that the level of education of Upper Peninsula residents combined with the skill sets of recent U.P. university graduates provides an excellent job force capable of competing with people in any region of the country.
One such success story is GS Engineering (GSE). Incorporated in 2001 with SmartZone help, the company provides engineering solutions to government and commercial vehicle manufacturers. The company’s engineers test vehicles in a variety of settings, including ballistics tests and general mobility and “shake-down” tests at their outdoor proving grounds.
“We’re a below-the-radar, low-visibility, quiet place where people can bring their vehicles to shake them down and beat them up,” said Adam Johnson, head of strategic development at GSE. “Risk mitigation is what we do.”
The company adds value to their services by offering more than diagnostics.
“We’re unusual within our industry,” Johnson said. “We’re a small company and very adaptable. Instead of providing straight, sterile results, we provide engineering feedback. We can help these companies develop better solutions instead of just providing test results.”
GSE primarily works with military vehicles, ensuring that vehicles manufactured by third party companies will pass military tests.
GSE is working on some of the largest programs in military history. Future Combat Systems is a family of high-tech combat vehicles designed to replace current Army weapon systems. “We’re designing the military trucks that you’re going to see around for the next twenty years,” Johnson said.
“We’re doing the same thing for armor kits,” he said. “A dozen of our kits have been hit in real combat situations and there have been no casualties and very minor injuries.”
GSE cites the technological advances of the past decade as critical to the success of the business. Information is essential, and secure communication between GSE and clients is possible through Internet and Web technology.
“Our digital infrastructure encompasses not only our office, but into hotel rooms and even into our homes, as some of us work from home. An employee out of the office can access the same information as he could if he were sitting at his desk.”
Another technological advance is the powerful computers required to run 3D models for design and analysis.
“The machines used to run $30,000 to $50,000,” Johnson said. “Today, the same software runs faster on a $5,000 machine.”
Another success story involving the Houghton SmartZone is Consistacom, Inc. Founder Steve Fitzgerald formed the company in 1993 as a consulting business. At the time, the company was located in Berrien County. As MTU graduates, Fitzgerald and his wife both dreamed of returning to the U.P., but it wasn’t until they dropped their son off for his fall semester at MTU that they realized that it was not only possible to move the business to Houghton, but advantageous.
“We were fortunate to get very involved in the community while I attended Michigan Tech,” Fitzgerald said. “We knew it was the kind of place we’d like to live.”
Over time, the company has moved from being a general IT consulting business to being subject matter experts in telecommunications.
“We work exclusively in management products and services for very large call centers,” Fitzgerald said. “Our customers include one of the largest online services companies, a major U.S. airline, several large banking and finance companies and the Italian National Telecommunications Company.”
Call centers consist of hardware, software and people working together to manage calls for large businesses. One of Consistacom’s primary services is to help these companies manage their incoming call loads.
“We try to improve the experience for both the caller and the call center agent who answers that call,” Fitzgerald said.
Consistacom also designs and implements disaster recovery plans. Twenty-four/seven service—that is, services that are available twenty-four hours a day, seven days a week—is a goal of many large organizations. Outages are estimated to cost these large call centers $10,000 per minute. Consistacom helps companies develop disaster recovery plans to deal with anything from power outages to terrorist attacks.
“Since [September 11], business continuity has been heavily regulated,” Fitzgerald said. “We help companies comply with the laws.”
Consistacom got a chance to prove one of their disaster recovery plans last October. Three weeks after the plan was put in place, a concrete truck hit a utility pole.
“The company had done everything right,” Fitzgerald said. “They had worked with all their vendors and had redundant systems.”
Despite all the planning, one system did not work as planned and half of the company’s call centers became inoperable.
“In the past, an event like this took an average of six hours to repair,” Fitzgerald said. “We had it back up and running in fifteen minutes.”
ThermoAnalytics also is in the business of preventing disasters—both mechanical and biological. Founded in 1996, the company specializes in thermal analysis and modeling software. One of their first contracts was with the U.S. Army. Army officials were interested in how visible their tanks were in snowy conditions; ThermoAnalytics had the technology to measure heat signatures and, being in the Keweenaw, a healthy supply of snow.
Originally, the company used heat-sensitive devices to measure thermal levels; today, the same work is done using computer simulation.
“Computer technology and software advanced so much that we were able to do the same thing completely on computer,” said Keith Johnson, president of ThermoAnalytics. “We created a computer program that could predict all the heat patterns and losses of a vehicle operating in any climate.”
They soon realized that the military was not the only organization interested in this kind of technology. Today, software designed and created by ThermoAnalytics is used by multiple auto manufacturers, prompting the company to open a support office in Detroit.
“Auto manufacturers need to know all kind of information about the thermal properties of their vehicles—how much air conditioning is needed to cool the passenger compartment, how much air movement is needed under the hood, whether or not the catalytic converter will overheat the spare tire,” Johnson said.
The software is not limited to modeling tanks and automobiles; the company is working in conjunction with medical doctors at MTU to model the thermal properties of the human body.
“We need to understand thermal regulation—how the body maintains its temperature,” Johnson said. “Electromagnetic radiation, from weapons or from every day items such as cell phones, can cause body tissue to heat up. We’re interested in finding out how much radiation the human body can absorb without tissue damage.”
ThermoAnalytics not only prides itself on its advanced technology products, but also on their low-stress environment and modern business practices.
“Our company finances are open, and all employees are eligible for company stock options,” Johnson said. “Every employee is actually a part owner in the company.”
Their benefit plan includes standard benefits such as health insurance and sick leave, but also benefits designed to maintain a low-stress work environment. Four weeks vacation per year is standard, and the company kitchen is stocked with healthy snacks. Employees are encouraged to bike or walk to work.
“We are pleased to be developing a workplace where staff can thrive and deliver groundbreaking innovations,” said Al Curran, ThermoAnalytics vice president.
--Barbra Letts

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