Next IT Corp., the Spokane developer of artificial intelligence technologies, says it tripled its work force and revenues last year, and expects to at least double in size this year.


Fred Brown, the privately held companys CEO, declines to disclose Next ITs revenues, but says the company is profitable, which he says is unique for a young software company.


Next IT currently has 140 employees, all at its office in the Paulsen Building, at 421 W. Riverside downtown, Brown says. He expects that the company will continue to grow at a rapid rate for the next few years, based on the expectation it will land some big customers and launch new products.


Next IT derives about 90 percent of its revenue from its ActiveAgent Web-based software, which uses cartoonish virtual guides to interact with Web-site visitors and customers. An example of Next ITs ActiveAgent software is Jenn, a virtual online travel agent that the company developed for Seattle-based Alaska Airlines and its sister carrier, Horizon Air, which launched Jenn last month. Next IT also has used that technology in Sgt. STAR, a virtual online recruiter for the U.S. Army.


Artificial intelligence, or AI, can be defined as computer programs developed to mimic human intelligence, such as reasoning, learning, problem-solving, decision-making, and speech. Next ITs Jenn, for instance, is capable of continually learning new concepts so it can provide better answers and advice to users.


Brown says Next IT plans to announce a new enhancement of its ActiveAgent technology this summer, but declines for now to disclose further details.


Next IT, which launched here in 2002, targets its products primarily at the government, health care, communications, finance, and travel sectors, because they fit best in those industries and thus hold the greatest potential for growth for the company when deployed in those industries, Brown says. He says Next IT is in talks with companies in all of those sectors, but declines for now to disclose further information about contracts the software company has landed or is lining up.


Next IT also is focusing on companies with large customer-service centers, which can use ActiveAgent both to help customers find answers to basic questions and to help employees find answers to more complex questions, says Jeff Brown, the Spokane companys executive vice president of sales and marketing. Jeff Brown and Fred Brown arent related.


Next ITs customers in the financial arena include New York-based Merrill Lynch & Co., which uses ActiveAgent software to enhance employee productivity by helping workers find internal information faster, Fred Brown says. Another customer is Tukwila, Wash.-based Boeing Employee Credit Union, which claims to be the largest credit union in Washington state and one of the top five in the U.S.


Jeff Brown says the financial sector is the companys biggest focus currently, because financial companies have intricate products and large customer bases.


Our technology works best with complex products and in solving complex problems, Brown says.


In the health-care arena, Next IT is involved in a collaboration thats doing research on bioinformatics and medical informatics for the Institute for Systems Medicine here. Bioinformatics uses applied mathematics, statistics, computer science, artificial intelligence, chemistry, and biochemistry to solve biological problems on the molecular level. Medical informatics combines information science and medical and health-care knowledge to improve the acquisition, storage, retrieval, and use of health and biomedical information.


We have a huge research-and-development effort going on here, and we want to use that technology to help the medical and medical-records industries, Fred Brown says.


Jeff Brown adds, We want to get more into health care because we see the inefficiencies and complex problems in that industry that we think our technology can help improve.


Next ITs involvement with Alaska Airlines is an example of its efforts in the travel industry. Since June, Alaska Airlines and Horizon Air have been using a second product, called Super Jenn, internally to help employees working in its frequent-flier desk support area find answers to customers questions and other information quickly, Fred Brown says.


When Alaska and Horizon introduced Jenn on their Web site last month, they claimed to be the first airlines to offer an automated customer-service agent. Customers can talk to Jenn by typing in questions, and she answers them with both verbal and written responses. She gives customers travel advice, finds the best fares, and answers other questions, including some about herself, such as her favorite food. If she doesnt know the answer, she can direct the customer to a customer-support staff member. While her face appears on the screen, her lips dont move, but she has the voice of a young woman.


Its been big for us in terms of an awareness boost and an opportunity to show measurable results, Fred Brown says. Its helping us put the proof in the pudding of our products.


Because Jenn can learn new concepts and improve its performance, Next IT now is focusing on improving the training process so that its easier for Next IT employees to train Jenn further and for Alaska and Horizon employees to grade her performance. The biggest priorities in her training currently are to make her responses more automatic and conversational. Next IT is trying to cut her training time in half every 18 months, and has done that twice thus far, so now it takes a quarter of the time to train her that it used to, Brown says.


The companys big focus with Sgt. STAR right now is increasing the fictional recruiters presence on the Internet and finding ways for it to engage potential recruits, Brown says. For example, it has created a Web page for Sgt. STAR on MySpace, a popular social-networking site, and is creating banner ads that he would appear in on certain other Web sites, he says.


He has the knowledge, and now were figuring out how to distribute that knowledge on the Web, Brown says. Its similar to how a real Army recruiter would hang out at high schools.


Like Jenn, Sgt. STARs lips dont move, but his voice is strong and slightly gravelly, similar to that of a stereotypically gruff Army sergeant.


Challenges


Although Next IT has been growing quickly in recent years, it hasnt had any trouble finding workers, he says. About 90 percent of its employees, about half of whom are trained in some aspect of software technology, are from the Spokane area.


People think that because were a very high-tech company we probably cant find any people here, but thats not the case, he says. We havent had any trouble finding qualified people in Spokane who want to come work for us.


As the company continues to grow, though, it likely will have to work harder to find qualified workers, Jeff Brown says. It also is working to make sure that it maintains a tight focus on its core products and targeted industries and maintains its workplace culture, he says. As a relatively small company in the software industry, it also must continue to place a high priority on customer service, he says.


Were not big enough to not have happy customers, Jeff Brown says.


In addition to developing ActiveAgent software, the company also has a unit called A Perfect Web, which designs Web sites, and a subsidiary called NextSentry Corp., which offers a network security software tool to financial institutions, Fred Brown says.


In late September, NextSentry sued its former CEO, Jim Hereford, alleging he made false and misleading statements about the companys operations and prospects to its board and shareholders. On Feb. 7, Hereford filed a countersuit against Next IT, alleging oppression of minority shareholders. Brown declines to comment about either case.


Before starting Next IT, Fred Brown launched and owned another software company here called LineSoft Corp., which he sold to Spokane-based Itron Inc. for $42 million in 2002.


Contact Emily Proffitt at (509) 344-1265 or via e-mail at


[email protected].