ObjectSoft Giveaways Tempt Kiosk Market

ObjectSoft Giveaways Tempt Kiosk Market

By Andrea Novotny
Staff Writer

ObjectSoft Corp. executives have devised a pitch for their interactive kiosks that some local governments are finding hard to resist.

The Hackensack, N.J.-based company has installed 25 of its machines in ferry terminals, libraries and other public locations in three cities since July 1996. The kiosks provide people information about city services and tourist spots as well as transportation maps. They also allow citizens to search for job opportunities, renew driver licenses and obtain birth certificates.

The company, which has installed most of the kiosks at no cost to counties and municipal governments, is counting on advertising-related dollars to make its multimillion-dollar investment pay off, said George Febish, co-CEO and president of the company.

ObjectSoft's Internet-based kiosks are in use in San Francisco, Seattle and New York City, but Boston and Chicago may soon join this group, Febish said.

In King County, Wash., which includes Seattle, travelers can find out bus and ferry schedules, as well as real-time traffic information with ObjectSoft's kiosks. Unlike the other projects, the county paid ObjectSoft about $53,000 for eight kiosks, company officials said.

By year's end, ObjectSoft expects to have 100 kiosks installed throughout the United States, bringing annual revenues from $1 million in 1997 to $6 million, Febish said. The company is aiming for 200 to 300 kiosk installations in 1999 and annual revenues of $10 million, he said.

ObjectSoft, which previously provided consulting and off-the-shelf, reusable software components to government and commercial clients, now is solely focused on the kiosk business. The company started trading publicly in November 1996 on the Nasdaq small-cap market, shortly after switching its focus. Its stock, which was valued at $6 per share in November 1996, was trading at $2.19 per share May 27.

"We are soon going to see kiosks in all major cities," said Febish. Governments are faced with the problem of how to provide information to citizens and kiosks offer an easy solution, said Febish.

The worldwide market for kiosks is expected to grow from an estimated 65,000 units last year to nearly 500,000 units in 2003, said Francie Mendelsohn, president of Summit Research Associates in Rockville, Md., which specializes in kiosks, smart cards, biometrics and the Internet. Most of the worldwide growth will be retail-oriented, she said.

ObjectSoft currently supplies kiosks in the United States, which will remain the company's main market. Future plans call for installations in Europe, Febish said.

Also in the worldwide kiosk business are AT&T, Basking Ridge, N.J.; IBM Corp., Armonk, N.Y.; NCR Corp., Dayton, Ohio; North Communications, Marina Del Rey, Calif., and smaller domestic players, such as Golden Screens America, New York.

IBM, which does not break out revenues for its kiosk business, is considered the global leader, according to Robert Chomentowski, research analyst in the information technologies group of Frost & Sullivan, an independent research firm in Mountain View, Calif.

But Mendelsohn said ObjectSoft's goals may be within its reach. Government services are more likely to be available on kiosks if ObjectSoft provides the upfront funding to make that possible, Mendelsohn said.

Instead of contracting with the government for the purchase of kiosks, as most other companies do, ObjectSoft scouts out a location and initiates agreements with municipalities so their information may be placed on the devices, she said.

In nearly all cases, ObjectSoft does all the work without using taxpayer dollars, she said. That strategy is not widespread, although Golden Screens America and Lexitech of New Haven, Conn., use similar business models.

The demand for kiosks is stronger in the commercial sector, Mendelsohn said. Only about 10 percent of kiosks had federal, state or local government content on them in 1997, she said. But that figure should grow to 17 percent by 2003, she said.

The growth of kiosks with government content will depend on whether there are public-private partnerships similar to relationships developed by ObjectSoft, Mendelsohn said.

But state and local governments across the country are experimenting with kiosks to streamline their bureaucracies. In Texas, the state contracted with North Communications on a project so that job seekers now can find out about openings for state positions. In Maryland, NCR worked on a project that allows residents to renew their car registrations via kiosks.

ObjectSoft began providing its thinner SmartSign kiosks in San Francisco earlier this year. These kiosks can be mounted directly onto building walls and are only 7.5-inches thick, thus taking up less space than older models.

For its part, NCR plans to parlay accounts with Indiana and Maryland into kiosk business opportunities with other state and local governments, said Robert Ferrari, self-service industry specialist for the company's Government Systems Corp. Those states are using NCR kiosks in shopping malls and other locations for motor vehicle registration renewals, Ferrari said.

NCR, which provides IT solutions for transaction processing and decision-support, has 200,000 self-service terminals deployed worldwide. Most of those are being used by the banking industry, he said.

ObjectSoft Corp.

Headquarters:Hackensack, N.J.
Current number of installed kiosks:25
Projected number of installed kiosks by year's end: 100
Started publicly trading:November 1996
Per share stock value as of May 27:$2.19

Annual Revenues
1997 $1 million
1998 projected $6 million
1999 projected $10 million

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