EMBEDDED Wireless Labs Sdn Bhd is an example of everything a Multimedia Super Corridor (MSC) company could be if it kept trying and refused to give up. It started out with the idea of being an innovation lab that designs products for other companies, did some contract work to keep the wolves at bay and finally, it put all its resources into a new direction.
After 17 years of dogged perseverance, the company, which has positioned itself firmly in the connected health sector of the Internet of Things market, has gone international and will likely be one of the brightest stars in the Malaysian Internet of Things firmament.
For starters, it has teamed up with AT&T in the US to provide healthcare and connected health services to wirelessly enable a new remote patient monitoring platform. This means it will be working with, among others, hospital and aged care facilities in the US to help them monitor patients and residents remotely.
Locally, Embedded Wireless has teamed up with Maxis Communications Bhd to provide remote monitoring service to business-to-business, or B2B, partners such as hospitals, hospices and homecare agency Love on Wheels Healthcare Services Sdn Bhd.
Being visionary enough to develop a solution for the connected healthcare market, which is just about to take off internationally, and having already secured a foothold in the US market, the company is poised for bigger things.
Embedded Wireless started because of the appeal of the MSC. Way back when the idea was still new and Malaysia was intent on attracting investors and clever technology people to set up shop in the 15km by 50km “corridor”, it attracted the attention of Canadian Tom Mathai, who had started his first Internet company in 1994 when he was just 19.
Mathai had never been to Malaysia and didn’t know anyone here, but he was introduced to Datuk Dr Salim Cassim, the founding partner of Kumpulan Medic Sdn Bhd, who agreed to show him around and introduce him to the right people. In the end, the two decided to form a company, Web Kingdom Sdn Bhd.
On a visit to the UK, Mathai met Kenneth Margon, who specialised in wireless technology and was running a technology company, which had offices in the UK and the US, with G U Renukanand (Anand). They agreed to merge the two companies, and
Embedded Wireless was born.
“We wanted the lab to be an innovation centre where a lot of ideas get generated, like Ideo in the US,” says Anand, who is its chief operating officer.
It seemed a compelling enough proposition. After all, being located in Malaysia would allow you to slash your costs by some 75%.
Anand admits as much. “The reason we got funding in 1998 was that the cost of building infrastructure and a team here was almost one-fourth of what it would have been in the US. So, if you had a company of this scale in a western environment, you would have probably run out of money in six months. That’s where being in Malaysia made an impact because we were able to stretch the dollar four times more.”
The company always got money from angel and other private investors. Malaysian funders simply did not have the resources to fund it on the scale it was looking at. “If you go to an MSC funder or venture capitalist, it would probably start by giving you seed capital of RM150,000. Our first project alone cost us RM7 million,” says Anand.
But somehow the idea didn’t quite take off. Sure, it developed products well enough, like Streetspace webstations, which Malayan Banking Bhd, CIMB Bank Bhd and even the Ministry of Human Resources use for standalone kiosks today, and Diginara for musical downloads, as well as software that allowed click-based revenue via micropayments. But none of these actually paid the bills, and some didn’t even make back what it had put in.
“Everything we developed was ahead of its time. And that can be a problem. Every product we let out came back to us. You could hire a third-party management to sell the product, but because they only came in at the end of the process, they didn’t have the vision or entrepreneurial drive to take it forward,” says Anand.
Despite this, the company managed to raise US$30 million in capital from foreign funders and used it to keep developing products for third parties. It developed its capabilities in many different areas, such as wireless technology, Internet technology, software, hardware and firmware.
This went on until 2005, when one of its projects with Telekom Malaysia Bhd to provide rural telecommunications exhausted the company’s resources and almost caused it to go belly up.
Times were bad. Its backers ran out of money and pulled out. As chairman and director, Salim was left with the company and its debts. He had to decide whether he would close everything down or put in his own money, raise more capital somehow and keep pushing on.
“There was a different group of investors at the time and they ran out of money. So they asked me to step in. When we started, I was just the local chap for them. But when they pulled out, I decided to carry on. So in a way, I inherited all this,” he says.
All this, included the laboratory and all the engineers. “It was either we close shop or we keep going. It was very tough, but I said, ‘Okay, let’s give it a try’,” he adds.
Turning things around
Salim had to put in his own assets and raise capital to ensure that the company could sustain and be able to deliver. Things were not easy, but the doctor was an entrepreneur. Other than helping found Kumpulan Medic, he was also on the board of The New Straits Times Press (M) Bhd, Southern Bank Bhd and Killinghall (M) Bhd.
But continuing on required some sacrifices. The biggest of which was slashing the staff of 120 to just 40 people. The other was downsizing the business and projects it took on.
The company also decided to narrow its focus and take on less capital-intensive projects. “Where before we would spend a few million [dollars], we brought it down to a few hundred thousand [dollars]. Also, we were not doing a lot of projects. We kept our costs to under a million [dollars] a year,” Anand says.
The changes were implemented in 2005 and 2006. “We became more of an engineering company providing services to other companies,” he adds.
One of the companies it provided services for was hospital equipment company Draeger Medical, then a subsidiary of Siemens AG. Draeger, whose equipment is used to monitor patients’ vital signs, commissioned the company to add wireless connectivity to its product line.
“We did some work for Draeger, and that took us to the US and got us involved in healthcare. It also sparked some thought about how this could potentially be a very good market,” says Faris Cassim, the company’s chief financial officer.
So the big change happened. Embedded Wireless went from being a telecommunications company to one that provided connectivity for the healthcare industry.
Chief technology officer Margon saw that connected healthcare would be the way to go. Many of the world’s most developed economies had ageing populations and not enough hospitals and nursing homes to take care of them. Remote monitoring from their homes would eventually go from being a luxury to a necessity.
This was when Salim got interested and more personally involved with the company. He agreed with the direction and conclusions drawn.
“I read this book by a doctor in the US, Dr Chip Teel, called Alone and Invisible No More, and it said if the governments of this world do not wake up in the next 10 to 15 years, they will be stuck with a huge greying population. How many hospitals and nursing homes can you build even if you can afford it? The only way would be to keep [the patients] at home and monitor them remotely,” he says.
The company started developing the system in 2010, and by 2011, it had something to show. The Malaysian market was not ready for what it had to offer, so it set its sights on the US.
It made sense. Healthcare is a very big drag on the US economy and there are just enough doctors, nurses and hospital beds there for all who require to be monitored.
“They already have a lot of programmes in the US where they are trying to monitor people remotely and keep them out of the hospital system,” says Faris.
“Telehealth is where they send a patient home with a device that also comes with a camera so that they can talk to their doctor. This has been going on since 2000, but it’s very expensive as these are all tethered devices. So if you had one device that measured, say, your blood pressure, that’s all you could do with it. You couldn’t attach anything to it. Also, it’s very expensive.”
The team at Embedded Wireless looked at what was already available on the market. They found it clunky, tethered (having lots of wires) and expensive. The incumbents in this space had been doing pretty much the same thing for a long time and making a lot of money out of it. But they didn’t have the agility or incentive to develop products for the future.
So the team decided to come up with a wireless device that would help people better monitor themselves at home. And the ideas kept coming.
The Zilant, which was what the device was eventually called, would be affordable and convenient. It would have open application protocol interfaces (APIs), meaning that anyone could integrate their devices with it. It would be compatible with all the major wireless protocols — 3G, Zigbee, Bluetooth, WiFi.
Business development manager Faizal Sanusi explains how it works. “Once the reading is taken [with the measurement device, say, your Bluetooth-enabled blood pressure monitor], it is transmitted wirelessly to the Zilant unit sitting unobtrusively in the background. You don’t have to do anything. The process is automatic.
“The information is then transmitted to the cloud (via your telecoms provider, AT&T in the US or Maxis in Malaysia) where it can be accessed with any web-enabled device. The way you access it is by going to our portal, and you can have different types of alerts come to you via mobile phone or email.”
Doctors can key in the thresholds for their patients, so that if their readings breach them, an immediate alert is sent out to their physicians and loved ones. “That is the intelligence we have built into the system in terms of the software that comes with it. We also have video conferencing capabilities via devices like your tablet. The doctors can ring the patient and have a quick consultation session,” he adds.
It is simplicity in itself. As Faizal points out, “The patient is not using any extraordinary devices. They don’t need to open their laptop or switch on their phone or download an app for this. And you are cutting out the pen-to-paper measurements which can be inaccurate, not done in a timely fashion, or manipulated.”
Once it had developed the product, Embedded Wireless realised it would need a partner in the US. It decided on AT&T, which was moving into the Internet of Things space and was looking at the healthcare and ageing segment of the market.
Margon started talks with AT&T in 2011 and the two companies signed on the dotted line in October 2012. But before the talks with AT&T could begin, the product had to be certified. It was tested at one of the leading laboratories in the US, Cetecom.
Faris says, “Certification is actually quite a lot of work — you have the FCC (Federal Communications Commission) regulations and a whole lot of telecoms regulations. So our product had to meet world standards, and probably more, because we have something called a Virtual Private Network with AT&T and that doesn’t come easily. We had to satisfy them in terms of the strength of our architecture and we had to put very complicated measures in place to ensure that our security is very tight.”
The next step
Once the AT&T deal happened, it was time to go to the ground and sign up customers. Embedded Wireless was not looking to sign up its own customers, but use a B2B model where it provided services to hospitals, aged care facilities, independent care facilities, home healthcare agencies, and homes health and hospice facilities, which in turn would provide the services to their patients or customers.
The company recently signed up Wallingford, Connecticut-based Masonicare, the state’s leading provider of healthcare and retirement living communities for seniors, which brings in about US$200 million in revenue a year.
“We have ‘live’ patients with them and we actually have a contract to service their residents,” says Anand.
This is a huge deal. There are Masonicare centres all over the US, and while they are not legally bound to each other, there is a brotherly sort of understanding between them. The Connecticut group indicated that if it was happy with the service Embedded Wireless provides, it would introduce the company to the other Masonicare groups in the US. This could mean up to 3,000 installations with just that group alone, according to Anand.
What else is Embedded Wireless looking at? “We’re looking into a market for helping control re-admissions. In the US, if a patient comes back within 45 days of being discharged, the hospital cannot charge them for it. Every re-admission can cost the hospital between US$18,000 and US$20,000. There are actually groups helping hospitals decrease their re-admissions. And part of how they do that is making sure the patients are properly monitored at home before they have a significant event,” says Faris.
The potential is huge. Anand says the company expects to break even in 1½ years.
What about Malaysia? “We are working with Maxis to provide the infrastructure for enterprise players, such as hospitals, home health facilities and hospitals. We have actually built an easy B2B model, so that they can put their equipment in the patients’ homes for a monthly package. Everybody has an issue about offering the service at affordable levels. It took some time, but we have actually cracked it,” he says.
Embedded Wireless is working with homecare company Love on Wheels Healthcare and hospitals in Malaysia. “Two years ago, we didn’t have homecare divisions at local hospitals. Now some of the big hospitals, like Pantai Medical Centre and Sunway Medical Centre, have started homecare divisions, and our equipment can give doctors and clinicians data on how the patient is faring.”
Embedded Wireless is clearly on the road to bigger things, and has already attracted international attention. Cisco, for instance, which aims to be a major player in the Internet of Things space, has already expressed a desire to collaborate.
The real change happened when it got out of the lab and started to interact with the real world, says Anand. “I guess it’s part of growing up. When you’re in a captive R&D environment, you’re so busy doing the day-to-day stuff that you have no time for the outside.”
But it’s the outside that matters, bridging the gap between technological vision and market reality. “We knew connected health and connected devices were going to be the next big thing. But having a vision is one thing. Converting your vision into deliverables is another. I wouldn’t say we got off on the wrong foot, but that we spent the first 10 years preparing for this,” Anand concludes.
This article first appeared in Unlisted & Unlimited, The Edge Malaysia Weekly, on October 13 - 19, 2014.