The NexGen-eration: Howlette's anti-theft device helps draw in $1.2 million.

Ten years ago at Hofstra University in Hempstead, N.Y., Ed Howlette Jr. and his techie pals loved to play computer games. After long hours of studying history and physics, the scholars raced to each other's apartments, turned on the nearest computer, loaded their software and began zapping demons in cyberspace.

Of course, cash-starved college students were only "borrowing" disks for their personal use. But Howlette, now president and CEO of NexGen Solutions Inc. in Washington, believed that thousands of people must be sharing and selling copies of computer games and software applications. Such "theft" helped the computer whiz figure out that software companies, a deep-pocket market, must be losing lots of money.

Howlette, then a freshman majoring in criminal justice, invented a software device to prevent the illegal acquisition and distribution of software. To his dismay, sales did not come rushing in. In 1988, the Long Island, N.Y., native incorporated his firm as Personal Computer Consultants. However, he was not issued a patent until 1990. By that time, ironically, many major software companies had already manufactured their own anti-theft devices. "It was problematic and expensive to chase them for patent infringement," he says.

Every year software piracy steals more than $10 billion from the developers and marketers of computer software applications, reports the Business Software Alliance, an association that represents large software publishers.

Since 1992, Howlette has provided software development services to the computer industry and hobnobbed with fellow members of the National Coalition of Minority Businesses in Washington.

Still hell-bent on selling his product to software giants, Howlette became a subcontractor to Lotus Development Corp. (which includes IBM) and Novell Corp. Both firms would like to halt the theft of their applications, and forming an alliance with Howlette enables them to utilize his invention.

The software giants also tap into Howlette's services, such as software design, development and integration. Other clients in these areas include General Electric Information Systems, Chrysler Corp., AT&T Networks Notes and the American Stock Exchange.

Not bad for a chap who scraped together just $4,000 from 1985-89 to spring for computer equipment. After a rocky beginning (1992 sales barely hit $38,000), NexGen reported sales of $1.2 million in 1994. Howlette predicts that sales will reach $7 million this year.

NexGen employs 20 full-time employees in administrative and software development, and 10 consultants for short-term assignments. Right now, these staffers are working with Howlette to get on the ground floor of a lucrative new opportunity.

Within the last six months, government offices, especially procurement divisions, have exchanged information and contracts electronically. Answering the cry for less paperwork from small businesses, procurement has been streamlined with contracts going online.

Because of this change, Nexgen and Perwill EDI Inc. have created CommerceNotes, which enables entrepreneurs who use Lotus Notes to collect and distribute the federal commerce information to their staff and clients in seven different standard application formats.

"Our mission is to help our customers become more competitive in their marketplace by reengineering processes and leveraging technology," says Howlette. "As our slogan says, we are your pathway to emerging technologies." This time around, NexGen has the partnerships and the paperwork to be on the front lines.