- The Washington Times - Monday, January 14, 2002

Israeli companies that put down roots in the Washington area in recent years in order to tap the region's telecommunications boom are now trying to score business in the federal procurement market.
Herndon-based Oblicore, which has its research and development facilities in Israel, peddles software that monitors how well service providers do their jobs, something it expected to sell to other companies.
Since November, Oblicore has been seeking a partner that is already approved by the General Services Administration for federal procurement, hoping it can bypass the time-consuming task of getting the go-ahead on its own, says Larry Wolter, Oblicore's director of marketing.
"There are a lot of buyers who are no longer available," Mr. Wolter says.
Oblicore, which was founded in January 2000, had hoped to sell its product to new telecommunications firms who, for example, needed to evaluate their own customer-service software.
Those upstarts like Net2000 of Herndon and Reston's XO Communications are buying less now or not at all as they try to stave off financial ruin. Others are bankrupt and liquidating.
Two years ago, Israeli firms were streaming into the region hoping to cash in on the tech boom.
Trying to refocus, many firms are looking to the federal government, which is readying a major spending binge as part of the new war on terrorism.
"Israeli companies have no choice but to enter the United States since the Israeli market is so small," says Dan Epstein, executive director of the U.S.-Israel Business Exchange.
Most Israeli technology companies in the Washington area have their research and development facilities in Israel. But they incorporate and market their products in the United States because the Israeli market is not large enough to provide a basis for long-term growth.
Israel's technology industry has faced a shakeout over the last year that has outstripped the United States by far, says Harry Glazer, a lawyer with Greenberg Traurig in Fairfax.
"If you think the technology market in Tysons Corner got hit, it's not one-tenth of Silicon Valley, and not one-hundredth of the destruction in Israel," Mr. Glazer said.
Israeli firms raked in $3.4 billion in venture capital in 2000. Last year, that number dropped to $2.3 billion, a figure that masks a steep drop-off late in the year as the recession in the United States deepened.
Also last year, 500 start-up companies failed, as many as are created in a good year in Israel, Mr. Epstein says.
Apart from the U.S. slowdown, political turmoil in Israel and the September 11 terrorist attacks put a damper on area companies' zeal to build links with Israel's technology industry.
Mr. Epstein took 13 persons to Israel on an October trade mission, far fewer than he had hoped for.
"Without September 11, we would have had double that number," he says.
The lawyers and consultants are angling to get in on the act as well.
Mr. Glazer's law firm handled litigation over the 2000 presidential election for the Bush campaign, a potential boon to its lobbying activities. Greenberg Traurig also has technology and procurement practices.
"The government is a complicated maze to navigate through," Mr. Glazer says.

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