Valley tech company Vivato closes doors

Vivato, a once fast-rising Spokane Valley technology company, has shut down operations.

About 45 people lost their jobs at the company’s office in Spokane Valley after Vivato officials announced the closure late last week. At its height in mid-2003, that office numbered more than 80 employees. The company’s headquarters in San Francisco had as many as 25 workers back then. It’s not certain how many workers Vivato had in California recently.

A Vivato employee contacted Monday said no managers were able to comment on the closure. On Monday, the Spokane Valley office had just a few workers finishing projects and handling calls from customers.

The employee said reporters are being referred to an announcement posted on Vivato’s Web site, which said, “This difficult decision was deemed by Vivato to be in the best interest of creditors, shareholders and customers, based upon the company’s projection of its future results.”

Vivato also will shut down service and support for its hardware equipment, developed by engineers at its Spokane Valley site, the Web announcement said.

The firm was launched in late 2002 when three former Agilent Technologies engineers decided to develop a device to spread a wireless, or Wi-Fi, signal across a wide area.

They built prototypes of a wireless base station that transmits data to multiple users up to a mile or more away, instead of the much shorter distances found in most wireless networks.

The company began marketing its base stations and other equipment to businesses, colleges, industrial sites and other locations needing secure data networks over a broad area.

In 2003, Vivato landed $44.3 million in venture capital from a number of investors, including Intel’s venture fund. That was the largest single venture capital investment in a Spokane company, area officials said at the time. In total Vivato raised more than $65 million in financing, said Ken Biba, the company’s first CEO, who left in late 2003.

His successor, Don Stalter, was hired with the objective of making Vivato profitable. He didn’t succeed, and Stalter was replaced in early 2005 by Gary Sbona, a Silicon Valley veteran who was regarded as a turnaround specialist.

Efforts to reach Sbona, who is still CEO at Vivato, were unsuccessful.

As investment dollars poured in, expectations soared, but company sales never matched those lofty ambitions.

Former workers, such as one-time software project manager Jim Thompson, reported on Web logs and on other sites that Vivato’s initial technology never delivered the level of service claimed by its inventors.

Another problem involved plans in 2003 by Vivato to broadcast Wi-Fi across New York City’s Central Park. That plan was halted and company officials never offered an explanation for the change in plans.

The company later improved its products, changed management and made sales to major customers, including the Port of Seattle, the city of Kent and several U.S. universities.

Its base stations are the primary hardware components of the Spokane HotZone, the downtown wireless network offering free Web access across a 100-block area.

Joel Hobson, a city technology manager, said the Vivato closure is a major disappointment but will not disrupt the downtown HotZone or a second wireless municipal network for city services, also dependent on Vivato equipment.

“It’s not as serious as a setback, but it is unfortunate,” Hobson said. Hobson predicted several large technology firms will compete to acquire Vivato’s intellectual property and its current customers.

The Web statement, at www.vivato.net, said the company plans to contact its creditors next month to make plans to pay off debt.