Fred Brown believes he has lassoed a big one.


The calf roper-turned-software entrepreneur formed Next IT Corp. here last year and soon after acquired Spectre AI Inc., a then-2-year-old artificial-intelligence software developer here founded in a garage. Brown launched his new venture on the heels of selling the last company he started, power-line design software maker LineSoft Corp., to Spokane-based Itron Inc. for $42 million.


Next ITs artificial-intelligence software interacts with a human user by evaluating inquiries and responses provided by the userincluding the users language and word choicesand creating customized responses to the users queries. The technology can be used on a Web site as an interactive customer-service or marketing tool and also can be used in an internal computer system to interpret and evaluate large volumes of data.


Just 16 months old, Next IT has established inroads in the federal-government market and in the travel industry and expects to expand into additional markets soon. The company currently employs 30up from eight at its inceptionand projects that it will add about 70 more workers, mostly software engineers, in 2004.


The company recently moved to the 11th floor of the Paulsen Center, at 421 W. Riverside, from smaller quarters in the Holley Mason Building, to accommodate its hiring plans.


Brown declines to disclose the companys sales and only will say that it is growing rapidly.


The potential here is 1,000 times bigger than the potential at LineSoft, Brown said recently while speaking at a Gonzaga University Deans Business Forum lecture.


Next IT operates two subsidiaries: its Spectre AI LLC acquisition, which mostly does work for the federal government, and Next Travel LLC, which it formed to serve the travel industry.


Phillip Galland, president of Spectre AI who founded that company with Next IT Chief Technology Officer Rob Hust, says the unit is working with the U.S. Department of Defense, federal law enforcement, and the federal intelligence community. He declines to name the agencies with which the company has contracts because of the sensitive nature of the work the company is performing for those agencies.


About 95 percent of Next ITs work is for the federal government. The other 5 percent of Next ITs work is in the travel industry to help with marketing and bookings.


Those percentages likely will change drastically in 2004, Galland says, to where commercial contracts and federal work will account for equal amounts of Next ITs overall activity.


Galland says Next IT expects to have some major contracts to announce in the first quarter in both the travel industry and other commercial markets.


Were coming soon to a Fortune 200 companys Web site near you, Galland quips.


Next IT also has helped to form the Gonzaga Artificial Intelligence Lab. The company donated use of its technology to the Jesuit university to create learning tools for children, as well as to develop tools for keeping in touch with alumni and to help recruit new students.


Next ITs AI


Next ITs artificial-intelligence software can serve a variety of tasks, but Brown generally describes it as a virtual work-force multiplier, which means that it can quickly perform complex or otherwise time-consuming tasks at the instruction of a user.


At his recent presentation at Gonzaga, Brown demonstrated a couple of prototypes of the software.


One involves a mock-up of the U.S. Army Web site with a feature called Ask Sgt. Rock, which acts as a recruiting tool for the Army. Sgt. Rock is Next ITs artificial-intelligence software in action.


If a potential recruit clicks on Sgt. Rock, the Next IT technology starts a conversation in which Sgt. Rock responds audibly to the viewers typed responses.


In the demonstration, Sgt. Rock asked the viewer his name, then referred to him by name throughout the conversation. When Sgt. Rock asked Pedro, a fictitious Web-site user played by a Next IT employee, what he was interested in, Pedro responded with, helicopters are kinda cool.


Sgt. Rock then talked about the variety of Army jobs that involve helicopters, and as he gave his spiel, a list of 20 helicopter jobs popped up on the screen.


When Pedro was asked what he liked to do, he typed in, fixing cars and rebuilding engines.


Sgt. Rock said, So you are mechanical, and identified particular jobs that the Army needs filled in that area.


The virtual sergeant then went on to ask Pedro questions about his education and skills, trying to determine if he was a desirable recruit for the Army. Within 10 minutes of the start of the demonstration, Pedro had given Sgt. Rock his address and phone number and had been told that a recruiter based near him would contact him.


In another demonstration, a AAA travel club Web site prototype features a feminine voice that helps a customer with a service problem, then tries to sell the customer additional services.


Brown says the software understands different types of conversational language and separates the parts of speech by their most probable meaning.


In the Sgt. Rock demonstration, Pedro said the words helicopters are and cool, so there was a high probability he was interested in helicopters. If he would have said, helicopters are and dumb, the software would have determined that theres a good chance Pedro isnt interested in those aircraft and looked further for another interest to explore.


If Pedro had typed, My wife thinks helicopters are dumb, Brown says the software would have picked up that theres a smaller probability helicopters carry a negative connotation with Pedro and still would have explored that subject before moving on to something else.


Brown says one of the best aspects of the software is that it can identify when its unfamiliar with a particular subject or line of questioning and alert a live person, who then can take over by providing Sgt. Rock with the words to say. In such a case, the software can monitor that conversation and ask the staff member whether it should learn the new words.


The artificial-intelligence software also has a variety of internal uses for a company or agency, although Brown is hesitant to give examples of how the companys customers are using the technology internally.


He says Next IT itself, however, has used the software to rank resumes submitted electronically. The software also could be set up to order background checks and cull job candidates who have past activity determined to be undesirable, then send e-mails to applicants either inviting them to interview or telling them they arent being considered for a position.


Future spinoffs


Brown says the software would have applications in multiple markets.


There is huge opportunity, and one of our challenges is trying to manage the opportunity, Brown says.


Next IT has established a system in which it will start work in a given market, then once its established in that sector, will spin off work in that sector into a subsidiary. The two subsidiaries established thus far are wholly owned by Next IT, but future endeavors could include partners from outside the company. Next IT will retain rights to the technology and will receive licensing fees from the subsidiaries.


Brown says he plans to base those companies in the Spokane area.


Im a big believer in keeping most of the operations in Spokane, he says. Were interested in creating high-paying jobs here.


A 13-year veteran of the software industry who still participates in rodeos on weekends, Brown has become known regionally for his cowboy logic approach to business. He still competes in rodeos on the weekends and speaks to groups about parallels between business and Western culture.