Volume 1, No. 12
February 2006

United Bank and Trust
Familiar Faces, New Positions at UB&T
Mikan Corporation
Putting the Print in Laser Printers
Swisher Realty
Office/Flex Vacancy Report

Ann arbor area BUSINESS MONTHLY brings the reader the latest business news and information important to the business reader in Washtenaw County. Each month articles cover real estate, legal, Internet, employee concerns and the climate of business in the greater Ann Arbor area. There is news about company employees and feature articles on local businesses. We cover business news from Ann Arbor, Chelsea, Dexter, Manchester, Milan, Saline, Whitmore Lake, and Ypsilanti

Merit Network Eric Aupperle
Eric Aupperle, Merit's President Emeritus, helps to explain the complicated history of Merit and the Internet as we know it.

History Of The Merit Network

By Kate Kellogg

Last year, Merit Network Inc. moved its headquarters to the Michigan Information Technology Center where Internet2 had also established a home base. While Internet2 has received a bit more national press lately, that entity was made possible, in part, by technologies Merit developed and refined over the past four decades.

Merit has long been known as the premier network provider in the state of Michigan. The organization provides digital connections among all our public universities and libraries and networking for many other institutions, from public schools to the state government. In fact, Merit is the nation’s longest-running regional network. It has been serving Michigan’s education and research communities for so long that some elementary school students are accessing information through the same, albeit much updated, network their grandparents logged into in the 1970s.

Yet Merit is hardly a relic. Today, it is the state’s Internet2 GigaPop operator, meaning it connects all of Michigan’s public universities to Internet2 and provides dial-in Internet2 access to Michigan K-12 schools. The Merit backbone links communities throughout both peninsulas. The organization is constantly upgrading its backbone, most recently through collaboration among the three original Merit partners: the University of Michigan, Wayne State University, and Michigan State University. Called the Michigan Lambda Rail (MiLR), the collaboration selected Merit to operate and manage the MiLR, a controlled fiber infrastructure capable of carrying Internet traffic at speeds of 10 gigabits per second through southern Michigan. The connections consist of more than 750 miles of fiber-optic cabling including routes between Detroit and Chicago.

Since 1990, Merit’s technologies have resulted in three spin-off companies, while Merit itself remains a thriving nonprofit corporation. Besides high-performance network connectivity for its university members and nonprofit affiliates, Merit provides training, consulting, and other hosting services. In view of the increasing threat from hackers, worms, and viruses, the organization now offers security consulting services and conducts ongoing research in network security.

The organization has achieved many milestones since 1966 when the three original universities founded Merit as the Michigan Educational Research Information Triad. Since it is now governed by nearly all of Michigan’s public universities, the “Triad” part of the name no longer applies. Those universities comprise Merit’s membership and their annual fees support its operations.

Merit’s start-up funding came from state appropriations and a $400,000 matching grant from the National Science Foundation (NSF). U-M was and still is Merit’s host university. Merit’s staff have always been U-M employees and the university provides its business services. MichNet, sometimes confused with Merit, is the physical statewide infrastructure and the part of Merit supporting it.

Merit resided at various locations on or near the U-M campus over the years before moving to its current quarters in the MITC on Oakbrook Drive. The state-of-the-art facility is an appropriate home for the organization, which played a significant role in the development of what we now know as the Internet.

Eric Aupperle, the man who oversaw much of that work, is a walking encyclopedia of Merit history. He also is Merit’s President Emeritus and the recipient of the U-M College of Engineering’s Alumni Medal for 2003 among other awards. A life-long resident of Ann Arbor, Aupperle began working for Merit in 1969 as a project leader. He rose to associate director and director before being named president in 1989. Aupperle holds three engineering degrees and a bachelor’s degree in mathematics, all from U-M. Although Aupperle retired from Merit in 2001, he continues to consult there part-time.

Seated in a glass-walled nook at Merit’s headquarters, he recounts some of the highlights of Merit’s history. There isn’t a computer in sight. The sleek setting seems light years away from the basement of the Rackham Building where, in the 1950s, engineering students wrestled with the clunky IBM 650, an ancestor of today’s computers.

By the mid-60s, Aupperle was programming assembly language into the earliest version of mini-computers in the university’s Computer Electronics Lab. When he joined Merit in 1969, time-sharing computers had arrived. They allowed users to access mainframes using Teletype equipment and an early form of modems. By that time, the state legislature had established Merit to electronically link U-M, MSU, and Wayne State and create a statewide learning center. Bertram Herzog, a U-M industrial engineering professor, had been appointed Merit’s first director. He hired Aupperle, then a research assistant and electrical engineering instructor, as Merit’s first employee.

“Our first task was to put together a network that would link the three host systems,” says Aupperle. “This was a challenge since there were no off-the-shelf products at the time. So we decided to build our own.” Merit hired Applied Dynamics of Saline to fabricate the hardware interfaces needed to augment the PDP-11, a mini computer, and Merit staff wrote the network operating software. Merit then installed communications computers at the three host sites.

“Once those were connected to the mainframes, Merit downloaded software from the mainframes to the communication computers over the common interface,” says Aupperle. “This all took time. By 1971, the first communication computer was up and running and the network was formally dedicated in 1973.”

This was a real breakthrough in data networking. Never before could a researcher sitting in a U-M office run a program at Wayne State. While the process lacked the direct dial-in access and high-speed connections of today, the host computers were interacting with each other in ways “similar to today’s client-server” relationships,” explains Aupperle.

Merit achieved another milestone in the mid-1970s by adding direct dial-in capability. Users could dial in directly and access whichever host they chose. Soon after that, Merit connected to Telenet, a commercial spin-off of ARPANET, a national network developed by the U.S. Department of Defense. Telenet was an early precursor of the Internet that offered worldwide access. This step connected researchers throughout the nation and world with Merit through dial-up access.

In the 1980s, the organization began to pick up more public university members throughout the state, as well as non-university affiliates such as hospitals and other institutions. As Merit grew, it hired additional staff to run day-to-day operations, allowing programmers to create protocol and write code for increasingly sophisticated software.

Perhaps the most pivotal moment of Merit’s history came in 1987 when Merit bid on and won a $39 million award from the NSF. Merit won the national competition to implement, manage and operate the NSFNET backbone network. This network was to connect supercomputer centers the NSF had funded at various sites throughout the country. The agency’s goal was to make these sites available to all research universities for scholarly collaboration. With the help of former U-M Vice Provost for Information Technology Douglas Van Houweling, Merit forged a partnership with IBM and MCI for the project. The state of Michigan also pledged $1 million for each of the project’s five-years.

“The period from 1987 to 1995 was very exciting,” says Aupperle. “We brought up the network only six months after winning the NSF award.” While the original NSFNET operated at 56 kbps, Merit installed a T1 (1.5 megabits per second) network, which was 24 times faster. Less than three years later, the backbone was upgraded to T3 speeds, nearly 30 times faster than the T1 network. The network’s protocol became the standard for today’s Internet. “During this period, some major applications evolved, most notably the Worldwide Web, and the usability of the network, and its traffic, dramatically increased,” says Aupperle. “That was really the birth of the Internet.”

An important element of the NSFNET era was involvement of some 50 top-tier universities, he adds. The network primarily connected university sites and regional networks were run by universities or close affiliates. Chief information officers at these institutions had a large personal and institutional stake in the NSFNET. When the NSF exited from its funding role in the mid-1990s, the commercial sector began providing networking services to organizations such as Merit. While Merit still had infrastructure within the state, it needed commercial connections to the national backbone to connect with universities like Stanford or UCLA.

“It turned out that the commercial folks didn’t quite have sufficient understanding and capability to provide the quality of service that the Merit/MCI/IBM team had achieved,” says Aupperle. “That caused the university CIOs to say, 'we need to create more leadership and let NSF provide the glue to encourage progress and let the Internet evolve successfully.’ That led to the formation of Internet2 as an organizational entity.”

Van Houweling, then chairman of Merit’s Board of Directors, was named president in 1998. About a year later, the organization put together Internet2’s nationwide backbone, known as Abilene. Now with about 200 university members and many corporate participants, Internet2 is developing advanced Internet capabilities through the same government/academia/industry partnerships that fostered today’s Internet.

Although still primarily a statewide network operator, Merit is also an affiliate member of Internet2. While Internet2 provides leadership at the national and international level, particularly in the education and research areas, it doesn’t provide infrastructure within states, explains Aupperle. “Merit’s role with Internet2 is to run the infrastructure within Michigan, provide connectivity to institutions here, and interconnect to commercial backbones in the United States.” Merit connects to Internet2’s network and carries traffic out from Michigan elsewhere in the world via Abilene. But most of Merit’s staff of 35 is now involved with MichNet activities.

Thus Merit has, in a sense, returned to its roots of being primarily a network provider within the state. The organization has relatively little connectivity to commercial entities. “We try not to be in competition with the commercial Internet Service Providers, but to focus on the nonprofit sector and education and research environment,” says Aupperle. “Still, no other network in Michigan comes close to what Merit provides.”

Many of Internet2’s objectives build on Merit’s legacy. Both organizations are committed to pushing the envelope of technology and innovation. That mindset is what distinguishes such research-oriented nonprofits from commercial entities, believes Aupperle. Companies today are focused on the bottom line and have little incentive to take risks or encourage initiative, he says. “The key role of Internet2 and, hopefully, Merit, is to evolve the latest and greatest technologies, to be visionary and forward-looking. That’s what university folks are good at.”

EMU Business College David Mielke
Dean of EMU Business College David Mielke points out a full page ad in a South Korean newspaper recognizing a special program between EMU and South Korea's Keimyung University.
EMU's Business Dean Stressing Global Ties

By Kate Kellogg

With its strong international programs and hands-on approach to business education, the College of Business at Eastern Michigan University may have been one of the state’s best-kept secrets. But now the word is out, due to Dean David Mielke’s determination to develop a distinctive brand for the College based on its strengths and innovative programs.

Mielke became dean in July, 2004. He came from another deanship at the Seidman School of Business at Grand Valley State University, where he also was professor of accounting.

While there, he secured the state headquarters for the Small Business Administration’s Small Business and Development Center network. He received the “Newsmaker of the Year Award” from the Grand Rapids Business Journal in 2002 for his work to establish the Michigan Alternative and Renewable Energy Center.

Before leading Grand Valley State’s business school, he spent 19 years at Marquette University in Milwaukee, Wisconsin where he served as dean of the College of Business Administration, professor of accounting, and the first director of International Business Studies. While there, he developed 17 international student exchange agreements. Prior to entering academia, Mielke worked as an investment banker and as a corporate treasurer actively involved with acquisitions. The EMU College of Business has been recognized for two consecutive years as a “Best Business School in the U.S.” by the Princeton Review. Accredited by the Association to Advance Collegiate Schools of Business (AACSB International), the college has 2,555 undergraduate majors and 781 graduate students. Thirty percent of undergraduates are minority students. More than 700 students graduate annually from the College. In 1990, the College established the first weekend MBA program in the state. Its student chapters of national organizations consistently win top awards from their parent organizations. Below Mielke describes some of the initiatives and programs that are gaining national and international recognition for the College. Among the most recent is a dual degree program recently established with Keimyung University in Daegu, South Korea.

As a new dean, what was your initial impression of the College and what vision do you have for its future?

When I first arrived here, I took a look at the College and asked what are we known for, what are our strengths? What is our foundation and how can we build on that? What I discovered was a combination of good and bad news. The good news was that we didn’t have bad reputation. The bad news? We weren’t known for anything in particular. I felt it was important for us to develop a brand in terms of who we are, where we want to go, and what we want to be.

What features about the College would you like to see promoted?

In discussions with the faculty, our priorities boiled down to three words: innovative, applied, and global. In fact, the College has been very innovative over the years in the types of curriculum developed and in the faculty’s approach to teaching. Teaching has always been the College’s primary focus of attention.

The applied focus was apparent when I met with alumni and business people. We’re very hands-on and our students are known to hit the ground running when hired. To me that’s an incredible strength. To maintain that strength, we have to be interactive with the business community and the community in general. This differentiates us from other colleges who aren’t really sure what their focus is. Some want great research and yes, we require faculty to do research in order to be tenured and advance. But that’s really not our focus.

We also have a high percentage of faculty involved in consulting. We encourage that, within reason, on the belief that consulting is the best way to keep them on top of what’s going on in business world. They bring their knowledge into the classroom and allow students to get a hands-on feel for what’s going on out there.

The College also has a strong international component, doesn’t it?

Yes, by the nature of our student body and our faculty, we are very global. Twenty-five out of our 74 faculty members are of international origin and last year we were 13th in the country in number of international students for a masters-granting institution. As a University, we have over 1,000 international students a year. To the extent we can bring in students from other countries, our students gain exposure to other cultures. That can help build an extremely important component of any business education. Another objective is to have our students enter the College with the expectation that they will study abroad while here.

Does the College actively recruit international students and faculty?

Word of mouth is still the best way of recruiting although we’ve been very aggressive in putting together new programs and initiatives to attract even more internationals. Both falls that I’ve been here, I’ve gone out to Washington D.C. and called on embassies to recruit students. In particular that’s important for some of the mid-eastern countries, which supply financial support for their students. About 13 Saudi students entered this winter and we have about 50 in the pipeline.

Our international-origin faculty typically go home and talk about their positive experiences here. That encourages students from their countries to come and study here. Much of our international development came about through individual faculty members.

Is that how the new dual degree program with a university in South Korea came about?

Yes, one of our faculty members from Keimyung University had returned to Korea. The president of Keimyung wanted more international exposure and potential cooperation. So that faculty member came back late last summer and proposed an agreement. The essence is that they do two years there, two years here, we grant a degree and so does Keimyung. My response was yes, because we have a lot of transfer students from community colleges. The transfer procedure would be similar to what we do with our former community college students.

Another of our faculty members from Korea---one who had remained here--- spent a lot of time translating syllabi and we figured out how the Korean students’ first two years would fit with our programs. We also put together some scholarships to help support the best students. To everyone’s surprise, we got that done in three or four months. That faculty member and I went over there and signed the agreement last December.

We couldn’t have a better partner. The university’s president is very proactive in seeking international partners. Keimyung, a private university, has about 27,000 students. They’re an impressive, comprehensive university with a medical school and beautiful campus. And they received a $50 million gift from the Hyundai family last year. With Hyundai locating their new technology center in Ypsilanti Township, it’s a great connect.

When I was there in December, they had already received 28 applications before even starting the program. The first students will come in January of 2007. That year we will limit the program to 40 students and expect to have 80 the following year.

What are the advantages to both sides of this agreement?

The huge advantage to us is that we further internationalize our student body with top students. Students will be selected on the basis of English skills and scholastic ability. The advantage for them is that it will attract more students. They feel that if they send 40, it will bring in 200 to the university because of this opportunity. The program also raises the level of prestige within the country, as Keimyung will be the first university to have a dual degree program with an American university accredited by the AACSB.

You’ve established a graduate degree program with Tianjin University in China. What does that program with consist of?

We offer a Masters of Science in Human Resources and Organizational Development at Tianjin University. It is the first graduate program of its type approved by the Chinese government. We graduated our first 22 Chinese students this summer and currently have 24 more students enrolled. We send our faculty for a week of intensive classes. Tianjin faculty also teach in the program. Ours come back here and teach for about six weeks online and then return for another intensive week of class, which offers opportunities for firsthand feedback. English proficiency is a requirement for enrollment since the program is taught in English.. It’s a wonderful enrichment opportunity for our faculty, which in turn benefits our own students.

What does the College offer EMU students in the way of international business education?

For our own students, we now have an undergraduate international business major, launched this past fall. It requires study abroad, foreign language proficiency, and a second major such as marketing or accounting. The reason for that requirement is that the entry level positions are still in the traditional functional areas. Again, with our focus on applied, we want to make sure that our students are ready for that entry level job. One of our international majors can say they have a major in marketing, for example, have studied abroad and have proficiency in Spanish---and did it in four and one half years. This builds a strong set of credentials for a business student.

Is there a high level of interest in this program?

We had 75 students this fall and we were hoping to start out with 35-40.

What is the College doing to increase awareness of the need for better ethics in the business world?

That’s another area of focus for us. The International major requires students to take a global ethics course. And you already know of the interdisciplinary Merlanti Business Ethics course we offer. We have a couple of research grants set up for faculty within and outside the College to promote research in that area.

More important, by next fall we will be ready to implement a College of Business ethos statement on ethics values and accountability. It will address questions such as how do we interact with each other as colleagues and with students, and what should a professional environment look like in terms of ethics? We expect to be one of the first, if not first, to have such a professional statement. The idea is to make it become a part of the environment and culture. Some believe all faculty and students should be asked to sign it. We want the statement to guide how we conduct business and interact and not just be a neat plaque on the wall.

This was not my initiative. What really made me feel good coming in here early on, was to find faculty working on this even though participation has been voluntary---not required.

The College also has a Center for Entrepreneurship. What approach does the center take to entrepreneurship?

We’re focusing on that as a way of thinking. It doesn’t mean you have to start your own company. Some other business schools push students in an entrepreneurship program to come up with a brilliant business plan---as if the only way you can be successful is to start a business. They may push a competition and tout the two students out of 2,000 who actually start a company.

Our philosophy is that no matter where you are in a workforce, you can look for opportunities, new markets and new products. You can apply entrepreneurship to your thinking. We’re working on developing a skill set that helps students develop entrepreneurial characteristics besides just the ability to come up with a great idea. Of course, our students will learn how to do business plans and pursue ideas but that’s not the sole purpose of the program. Last year, the university was named one of the top 10 schools in the nation for entrepreneurship emphasis by Entrepreneur Magazine.

In what ways is the College interacting with the business community to build distinctive programs?

Supply-chain management is another area we have under development right now. We’ve built a very strong advisory board to help us in the development of the courses and program. We have strong representation from Daimler-Chrysler, from Tecumseh Products, Ford, and others. To continue our real-world, applied focus, we bring in the companies to help us put together the programs. We’re expecting to launch that undergraduate major next fall.

A national survey of 500 companies found that only ten percent have a supply-chain management they’ve developed. Companies need to examine questions like where do you source the parts, where do you locate the distribution center, where do you do the assembly, how do you deal with suppliers, and how do you move materials? There’s a huge market for people who have this expertise. The more companies outsource-in the U.S. or elsewhere---the more they have to be concerned with supply-chain issues associated with the global economy. It’s a huge area for potential development. We’ve got some really good partners to help us work on that.

The College is host for the Michigan Small Business Development Center, Region 9. Do students in any way participate in this partnership?

Yes, we have eight offices in the Metro Detroit area and our students are actively involved with the center’s projects. We have a big initiative in service learning where faculty bring real-world projects into the classroom. Many of those projects will be for small business clients. It’s great for our small business people because we provide all those services for free. A lot of accounting projects will come in from the small business network, such as a company that needs help with accounting. Under faculty supervision, the students will meet with the company and put together a simplified accounting system for them. We’ve been doing an incredible amount of work with Yankee Air Museum, for example, such as building membership databases.

I feel very strongly that, as a public institution, we have an obligation to share our resources with the business community. We get dollars from the state and ought to be investing in the state as well. The MI-SBDC is a great feeder of specific projects. It fits in very well with the applied part of our mission.

The university’s website announces the creation of an integrated marketing communication program here. What does that entail?

Traditionally, and still today, a lot of companies have an advertising department, as well as separate departments in marketing, PR, and corporate communications. These all operate more or less independently. Companies are finally realizing that you have to have a single message and you’ve got to be branded. To do so, you have to integrate all those functions. It must be a unified effort.

We’re bringing in two new faculty members with over 20 years of ad agency and brand management experience to help create an interdisciplinary program in IMC. We hope to get the accelerated graduate degree program underway by next fall. It will be 100 percent online and targeted at working professionals. There is currently no such program in the state and only a handful of IMC programs in the country.

Those are some of the strategic areas we’re focusing on with the idea that they must fit our rule of three---innovative, applied, and global---and must be in an area in which we have strength and can build on to be distinctive. These initiatives also must be very reflective of the business world.