Profits Meet Research

"Halfway between a university and an engineering firm" is how Senior Vice President Raymond S. Nickerson describes Cambridge think tank Bolt Beranek and Newman (BBN), co-ordinates of the Project Intelligence program between Harvard and the Venezuelan government (see above story).

In their headquarters near Fresh Pond, BBN scientists work in a broad range of research fields: electronics, computer science, information systems, cognitive psychology, and engineering. But the company's roots are much narrower--founded in 1948 by a trio of MIT professors, BBN began as an acoustics consultant and still derives its reputation from that specialty. The firm is famous in musical circles for its work on the New York Philharmonic Orchestra's concert hall about a decade ago.

BBN has ranked as one of Harvard's leading outside consultants since 1980, with over $2.5 million passing from the University to the firm during the last three school years. Most of this money has come from the Venezuelan government and merely passed through Harvard's hands to the subcontracted firm. Nonetheless, BBN maintains rather close ties with its closest academic neighbors, Harvard and MIT, as many scientists split time between laboratories at Fresh Pond and their home universities.

BBN spokesmen refuse to discuss specific facets of these relationships, but Harvard officials recall that the firm has done acoustical consulting on two University renovations as "favors" during the last year, the Paine Hall concert hall and Leverett House's dining room.

Music Department Chairman Christoph Wolff describes the firm's work appreciatively, saying "they replaced the soft [sound] panels with hot surface panels and brought [Paine] Hall back to its original state." He says Harvard probably did not receive a bill for the small project, and officials confirm that the Leverett dining room work was a similar goodwill gesture.

Harvard has contributed financially to BBN's computer science division, however, paying approximately $100,000 for a system servicing the Division of Applied Sciences and Biochemistry Department two years ago, according to Associate Dean of the Division Peter S. McKinney. The C-70 system works principally on administrative matters and accounting for expenses charged to Harvard's numerous outside research grants.

BBN's entry into the computer field symbolizes the company's gradual break since the late 1950s with its research-oriented beginnings. BBN now divides its financial statements into two halves: research and consulting, and computer and communications products. The future profits clearly lie within the latter sales-oriented sector, which has grown much quicker than its research counterpart in the last several years.

According to Richard G. Barakat, an associate of the Division of Applied Sciences who left BBN because of the dissatisfaction with the new emphasis, the change has brought growing pains to the firm. He blames Chairman Stephen R. Levy for making sweeping changes in the company which alienated many employees.

"It was an old-line research company," Barakat explains, "and when this new guy came in the pretty much made it clear to everyone that they were going to go into the computer business," an uncharted territory for BBN. While the computer division did not turn a profit until 1982, its early contracts have been encouraging, yielding a major deal to develop the MCI Mail communications system along with a boom in computer contracts with the Defense Department. Last year, approximately 80 percent of the firm's $85 million sales came through government agreements.

Today BBN bears little resemblance to the original venture of three MIT professors, two of whom remain on the seven-man board of directors (the third is deceased). The firm's unusual breadth of research activity and symbiotic relationship with Cambridge's academic world make it a sanctuary for researchers in fields from the arts to pure physical sciences and perhaps a prototype for the "silver collar" companies of the future.