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Updating the appliances

Give Len Kawell 20 points for chutzpah. His company, Pepper Computer, is developing a low-cost, lightweight, easy-to-use Internet appliance.

Remember Internet appliances?

Like personal jetpacks and decent cellphone reception, they're one of those visions of the future that never seem to arrive. Tiny little outfits like Oracle, 3Com, America Online, and Gateway have all tried to launch Internet appliances aimed at making it easy for non-nerds to surf the Web and send e-mail. Each failed miserably, and the devices were withdrawn from the market within a matter of months.

Enter Kawell and Lexington-based Pepper, with a device called the Pepper Pad, which debuted at the Consumer Electronics Show in January. The current prototype is about half the thickness and weight of a typical notebook computer, and noticeably more rugged.

"We wanted people to be able to throw it on a coffee table or into a backpack without worrying," says Kawell. It has a color display, two batteries that can power up to five hours of continual use, and a Blackberry-style keyboard split into two halves -- one on either side of the screen.

Kawell thinks that two things have changed the game for makers of Internet appliances.

One is WiFi -- the ability to easily set up a home wireless network that will allow the Pepper Pad to be used in the living room, kitchen, or out by the pool. (Prior devices were tethered to a pokey dial-up line.)

The other is the explosion of digital media. The Pepper Pad is designed to play MP3s through its built-in stereo speakers, and to display photo slide shows when you pop in a memory card from your digital camera.

Kawell, one of the three founders of the company that originally developed Lotus Notes, believes that the Pepper Pad will appeal to two very different kinds of customers. One is tech-savvy users with a WiFi network already installed in their homes, who want to add a simple, portable device. "The other end is the person who's intimidated by technology, and maybe doesn't even have a PC," he says.

Pepper plans to sell its device later this year for between $600 and $700; Kawell hopes to bring the cost under $500 with high-volume production. The company also expects to launch trials of the device this fall with two Internet service providers outside the United States, who he declines to name. They're intrigued by the idea of using Pepper Pads to attract new customers, sell them add-on services like photo printing and extra disk space, and hold onto them longer.

The company will likely try to raise venture capital this year. But that'll be difficult, since Boston area VCs tend to avoid investing in consumer technology like commuters are avoiding I-93 this week. (Kawell hints that funding could also come from a big corporate partner, just as his last company, Glassbook Technologies, was bankrolled by Hewlett-Packard.)Feeding the DuckYou've no doubt heard plenty about a certain convention that opens today in Boston, but on the other side of the country, at the O'Reilly Open Source Convention in Portland, Ore., attendees will be debating the future of Linux, not the legacy of Bush's first term.

One of the local companies that will be taking part is Black Duck Software of Waltham, which also plans to announce today that it has raised a $5 million round of venture capital, its first. The money came from Flagship Ventures and General Catalyst Partners, both based in Cambridge.

At the convention, Black Duck executive VP Karen Copenhaver will be talking about the thorny issue of developing proprietary software that incorporates bits and pieces of open source code.

Open source code, which is developed by programmers around the world who opt to make it freely available, sometimes comes with licensing agreements that require that a company credit the developers of that code, or even require that a company release the software it has created into the public domain.

Black Duck's product, called protexIP, is used by software developers and managers to track how much open source code goes into a new program. "There are something like 900,000 different open source projects out there," says Doug Levin, chief executive of Black Duck. "When you're developing an application, it makes sense for deadline reasons and cost reasons to grab some free code and use it." But, Levin adds, it's important to understand the implications of incorporating that open source code.

It's surprising to see Levin, an ex-Microsoft licensing exec, running a venture-backed start-up. He has long been a voluble critic of venture capitalists, whom he sees as focused on short-term milestones rather than building a quality company over the long haul. But Levin says that he has found two investors who don't think that way: Roger Heinen of Flagship and Larry Bohn of General Catalyst. Let's check back with him in a year, shall we?

Levin says he'll use the cash to add employees in sales, marketing, engineering, and customer service.

Wave on StageLast month, I wrote about the travails of Wave Systems, a software company in Lee. The company has been around since 1988, has never figured out how to turn a profit, but still has a number of perennially bullish shareholders who call themselves Wavoids.

Now there's a one-man show about Wave Systems and the Wavoids, called "Riding the Wave.com," and it'll be in Boston next week. "The show is about a young man's investment in Wave Systems during the tech boom," writes the director, Emerson College alum Jason Grossman, via e-mail. The show is performed by Jonathan Mirin, who also wrote it --and did actually lose a fair amount of money investing in Wave Systems' stock. For information about performances in Boston visit www.riding-the-wave.com.

Scott Kirsner is a contributing editor at Fast Company. He can be reached at skirsner@verizon.net. 

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