Softbank Services Group is spinning off one of its divisions into a company that may offer the premiere service for commercial transactions over the Internet.
If so, Softbank Net Solutions, the new Buffalo-based business, would be hugely successful, handling millions of purchases and orders over the Internet as consumers use the World Wide Web to obtain services and goods.
Softbank Net Solutions intends to hire about 100 people for the new company, this on top of an estimated 850 more telephone call center employees that the parent company is hiring in Buffalo this year and next.
The new company has a 25-year lease on patented technology that will give it a major advantage in garnering Internet commerce business, said Ronald S. Schreiber, chairman of Softbank. The technology, created by InterTrust Technologies Corp., protects digital information sent or retrieved over the Internet.
This security "wrapper" only allows parties who pay for a service or good access to the data sent over the Internet.
Schreiber said Softbank Net Solutions will meet a tremendous demand for electronic sales, distribution and support services while making sure companies or individuals selling over the Internet get paid.
He projects growth of the new company to start "slow" -- at 40 percent to 60 percent a year -- in the early years. And, as consumers become comfortable with using the World Wide Web for shopping, sales will explode.
"It will be vertical; it will absolutely take off," he said. He likened Internet shopping to the early days of ATM use. "Now it's a way of life," he said.
The president of the new company, which will be based at 325 Delaware Ave., is Paul J. Bandrowski, 32, Softbank chief technology officer the past three years.
Bandrowski said the new company springs from Softbank's Internet division, which already has about 50 people. He's in the process of hiring another 100 workers, including many computer engineers and executives paid salaries of $70,000 or more a year.
"It's not only great news for me and a group of people at Softbank, but also for Buffalo, N.Y.," Bandrowski said.
"We've got this kind of 'to-happen' kind of thing . . . it's right around the corner and it is this community in Buffalo, N.Y., that is going to change the way software business is done," he said. "We're recruiting individuals from around the country, in fact from around the world."
He said the system that Softbank is offering for Internet transactions will allow for many services to be sold and resold, but with the owner of the material assured payment.
One use, he said, is the rental of software, giving consumers an alternative to buying. Or, the service would allow a newsletter publishers to sell publications over the Internet.
"I think it will be enormously profitable," Bandrowski said. "It has the potential of doing hundreds of millions of transactions."
He said he expects tens of millions of people to be using the system within 18 months. Softbank would be the clearinghouse for the orders.
"I think they're going to be the Microsoft of the Internet commerce market," said Thomas D. Strade, 31, a computer company executive in Omaha who is returning to Buffalo to take a job with Softbank Net Solutions. "These guys are going to be the Visa or MasterCards of the Internet world."
Strade, a graduate of Buffalo State College, said he and his wife are natives of Western New York. He said he was delighted to join a high-tech company in his hometown area.
Analysts were more skeptical than Strade.
"It's a big technology, it's an interesting approach; it could be a big deal," said Christopher W. Stevens, an analyst with Aberdeen Group, a Boston market research and computer consulting firm.
"Who their partners end up being and who their competitors end up being will determine if they're a big player in this market," said Stevens, who was briefed a week ago by Softbank about the new company.
He said the company will need some major software companies to help distribute its technology so that it gets installed in personal computers.
Arthur Hutchinson, of Northeast Consulting Resources in Boston, said the new Softbank venture is "a powerful combination" of customer service and Internet ordering businesses. He agreed that Softbank needs to find ways to get the security technology loaded into personal computers but added that Softbank can succeed because of its relationships with computer firms.