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Published: Sunday, January 27, 2002

Taking the Internet by storm

BY MIKE HUGHLETT Pioneer Press

The forecast for the meteorology industry is sunny. Businesses from utilities to insurers are demanding more weather information, and technical advances have made meteorological data more accurate.

With that backdrop, St. Paul-based software company SSESCO officially launched a new product this month that it hopes will please corporate weather watchers like a warm front on a cold March day. "WxPortal" is a business-to-business Web site that transforms a huge jumble of meteorological data into easy-to-comprehend weather maps.

The site, named after a shorthand term for weather, is an attempt to reengineer the 13-year-old SSESCO, all the while capitalizing on its core strength -- turning environmental data into sophisticated but snappy computer graphics.

SSESCO has long done that sort of work on a project or consulting basis, selling its software to corporate clients and helping them customize it. With WxPortal, SSESCO's customers will pay a monthly subscription fee -- starting at $199 -- for a weather data package.

If it works out, SSESCO (which stands for Software Solutions and Environmental Services Co.) will eventually get the bulk of its revenues from recurring sales. And customers will get what SSESCO says is a unique product that will be less expensive than other methods of getting advanced weather information.

"We really are reinventing the company,'' said Mark Ahlstrom, SSESCO's chief executive officer.

SSESCO employs 15 at its Bandana Square office, while its chief science officer works out of an operations center in Grand Rapids. The firm was founded in 1989 by Neil Lincoln, lead supercomputer architect for Control Data Corp. Lincoln remains SSESCO's chief technical officer and one of its largest shareholders.

But Lincoln and other SSESCO associates decided they needed to strengthen their marketing and money-raising efforts as they launched a new product. So, 13 months ago, Ahlstrom was hired. "I came in as the business guy,'' Ahlstrom said.

Ahlstrom, 44, is steeped in technology, too. Schooled in biomedical engineering, Ahlstrom worked at Honeywell for several years, including in artificial intelligence. In the 1980s, he started a company that developed airline reservations software, eventually selling to Continental Airlines. During the 1990s, he headed a firm that developed software for phones and faxes.

This time around, he's selling a service that daily delivers a half-million Internet weather images.

SSESCO continuously reels in free data via satellite from the National Weather Service. "It's industrial strength stuff they send you,'' said Lee Alnes, a geographer and tech industry veteran who joined SSESCO as marketing vice president last April.

The weather service makes six different types of forecasts every day, some of which are revised every few hours. Each forecast has dozens of variables -- wind speed, temperature, barometric pressure and so on. The WxPortal user, with a few mouse clicks, can choose from 300 layers of weather maps and overlay them on a corporate map -- like a diagram of a utility's power grid.

Minnesota Power's trading arm, MPEX, served as a test site for WxPortal, and the electric utility now subscribes to the service. Ron Bole, a pricing and financial analyst at MPEX in Minneapolis, said the system has clearly and quickly delivered loads of weather information.

"There is so much weather data out there, and it's quite a task recovering it and sorting it,'' Bole said. "(SSESCO) has created a system to visualize that data so we can pinpoint what we want to see. ... Our traders don't have the time to dig into tons of statistics every day."

Utilities like Duluth-based Minnesota Power wade in and out of wholesale electricity markets on the hour. Such trading activity has grown in recent years because of the deregulation of the wholesale power business. And since the price of power is tied to temperatures, demand has grown for sound weather information.

SSESCO is betting it will capture enough customers in the utility business -- and other weather-sensitive industries like transportation and agriculture -- that its revenues will double or triple this year. The company's sales have been in the high six figures in the past few years.

Growth will depend partly on venture financing, which has been in short supply lately.

SSESCO set out to raise $2 million in private equity last year, but netted only $400,000, primarily from StarTec Investments in Bloomington and Northeast Ventures of Duluth. Still, "we managed to get some,'' Ahlstrom said, "which I think was a huge accomplishment given the venture environment.''

What a difference a couple of years make. In 1999, venture capitalists were heaping cash on all sorts of Internet projects that have since bombed.

"We would have gotten $15 million (back then) just because the CEO had a pony tail,'' joked Alnes, referring to his own CEO's hairstyle.

Mike Hughlett can be reached at mhughlett@pioneerpress.com or (651) 228-5428.


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