Tales of sunken treasure have fascinated the world since perhaps the first sunken ship, but few can claim a story of their own.

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Ken Privitt

 

Ken Privitt is a technical marketing engineer at Intel who happens to have built a small submarine with his father years ago. Now, a lot of Intel employees have interesting hobbies and stories to tell, but Privitt's may be among the more unique. His story involves a nearly 150-year-old shipwreck, the submarine, the Supreme Court, and a fortune in gold. It even has an interesting twist.

 

The short version goes like this: Fifteen years ago this August, 564 gold $20 double eagle coins were recovered from the wreck of a paddle-wheel steamer named the SS Brother Jonathan using a small submarine. Privitt built that sub - a 15 ½-foot, 5,000-pound steel craft named the Delta - with his dad, Doug, a long-time machinist. The younger Privitt designed the pressure vessel and electrical, life support and propulsion systems from scratch using a self-built computer with core memory ("Pretty amazing for 1979," Ken said), and those contributions enabled the Delta to go down to 1,320 feet, making the mini-sub ideal for the job.

 

The before and after give this treasure tale its punch, albeit at the expense of 225 souls who perished in what remains one of the worst maritime disasters in U.S. history.

 

On Sunday, July 30, 1865, the Brother Jonathan was headed to Portland from San Francisco carrying 244 passengers and millions of dollars in newly minted gold bars and $20 Double Eagle gold coins. Under Capt. Samuel J. DeWolfe and clear blue skies, the ship made a brief port call to the near-halfway point of Crescent City. About a half-hour after re-embarking, the paddle steamer ran into a seasonally unusual severe storm. Enduring massive waves, some cresting at 30 feet high, terrified passengers begged the captain to head back to Crescent City, which DeWolfe did. Nearing the harbor, the skies cleared but not the mountainous waves. A strong tailwind made navigating unstable and the ship struck an uncharted rock, the impact sending the nine-story mast through the hull and ensured that the Brother Jonathan would founder. As screaming passengers were being washed off the decks by the waves, efforts were made to launch the six lifeboats capable of carrying all passengers and crew. Alas, due to the huge waves, only one lifeboat made it safely to shore.

 

"Because some of the 19 survivors were the crew, we know the details of what happened," said Privitt, 55. Information included what cargo was aboard – goods that lay somewhere on the ocean floor. "A lot of gold was on that. There were shipments that included a U.S. army payroll and an Indian treaty payment, and all the money was in gold coins or bullion. The ship was loaded, some believe overloaded. Back in 1865 there were no shipping rules for packing."

 

Fast-forward about 125 years and we come to where Privitt enters the story – a part that usually happens only in adventure novels, movies and video games. Aware of the submarine built by Privitt and his father, a representative of Deep Sea Research came knocking at the elder Privitt's machine manufacturing and marine fabrication operation - named MARFAB - in Santa Ana, Calif.

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Ken Privitt poses with the Delta sub he designed with his father. Photo taken in 1982, the year the Delta made its maiden launch.

 

"This guy came in talking about treasure," the son recalled. "He wanted to use our sub to find the SS Brother Jonathan. My dad brushed him off at first, but since the sub was being used for oceanography research in Alaska and was passing Crescent City after dive season anyway, he figured 'What the heck. No skin off my nose.' When the man offered 4 percent of whatever they found, it was a deal."

 

During the initial salvage mission another contractor's mini-sub, the Snooper, actually found the Brother Jonathan, its gravesite unknown until technology could outsmart Mother Nature's challenges of rocky and dark underwater passageways, treacherous weather and mighty currents, plus human miscalculations of where the ship might have eventually settled. About a year later, with salvage rights secured, or so one thought, the Privitts' mini-sub would make history roughly 2 miles south of what is now called "Jonathan Rock." On Aug. 30, 1996, the Delta brought to the surface a cigar box-sized container found near the wheelhouse.

 

"That's where the purser was and my dad figured that's who you'd give valuables too," Privitt said.

 

When the salvors opened up the box on the team boat, found in mint condition were $2 million in one-ounce $20 double eagle gold coins. The one person who was not there for the big moment was the Delta's co-builder, and for ironic reasons.

 

"I get seasick," Ken Privitt shared with a laugh. "Before the Brother Jonathan thing, we'd be out on dives for a week and they didn't care I was over the side chumming a bit. I had to work. I was on the boat! Literally, I was seasick 24/7 because I'd get sick in my sleep, too. I would dream that I was working."

 

As for the sunken treasure, eventually 1,207 gold coins were recovered along with numerous artifacts. Some of the coins were encrusted from a century-plus of sea life, but the reason why many were found in mint condition, and, thus, more valuable, was they were discovered still wrapped in protective oil paper.

 

As for divvying up the booty, the salvors faced another series of challenges, only this time on land and mostly in the courtroom. Descendants of passengers, shippers and even the salvors themselves all battled for a share of the treasure, but the loudest voice came from the state of California, claiming it not only owned the rights to the wreck and everything located close to its shores. A long legal battle between the recovery team and the state over ownership of the coins went all the way to the Supreme Court before being unanimously decided in favor of the finders. The appropriately nicknamed "Golden State" threatened to appeal, but in 1999 dropped the matter when it settled for 200 of the $20 double eagles, estimated at $5,000 per coin or $1 million.

 

The remaining 1,006 coins were sold in a public auction and raised $6.3 million, the low end of what the auctioneers had estimated. After taking their fee, about $4.6 million was left. Deep Sea Research, saddled with all the costs and legal expenses, wound up with a very small return on investment. As for the Privitts, Dad earned $40,000 "and a helluva story," said the son, who received zilch, but a helluva story.

 

"The money my dad made went into MARFAB, so he really didn't get anything either," he said. "As for me, I enjoy telling the story even though the only active part was in building the submarine. If I hadn't built it none of that would have happened."

 

The younger Privitt did wind up with three of the auctioned double eagles. The man who helped get them there didn't even merit a discount. Successfully bidding between $2,000 and $2,500 for the three coins, he gave one of them to his mom before she passed away. Dad, 78, now possesses it. The other two gold pieces are earmarked for his two children, ages 22 and 21. Asked why he hasn't given the coins to them yet, he replied with a playful smirk, "They'll get them some day, eventually."

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A bounty of $20 double eagle gold coins was resurfaced by the Delta. The hand belongs to Doug Privitt, who built the sub with his son, Ken, an Intel engineer.

 

The first in his family to go to college, Privitt earned his bachelor's and master's degrees in engineering from UCLA. His destiny of going in that direction was pretty much set at the age of 4, when his father, a curious and adventure-seeking machinist, heard about a man named Ed Armstrong who was building a submarine just down the street in their Torrance neighborhood.

 

"They immediately hit it off," Privitt said. "I'd say he and my dad built 7 to 11 submarines before they broke off after disagreeing on my dad's new design that put the ballast tanks on the front and back instead of the sides for more stability. My dad's design was correct."

 

With Dad on his own, the son, who started out as a studious observer, became more hands-on over the years. In fact, during and after college he worked for his dad at MARFAB as a project engineer. His experience designing and building receivers and acoustic beacons helped him land a job at Magnavox, but not before finishing and launching the Delta. After 5 years of GPS design, working heavily with Intel microprocessors, Privitt left Magnavox for Intel as a field application engineer. That was in 1985 and he's been with the company ever since, earning a prestigious Intel Achievement Award along the way for his contribution to InfiniBand, an architecture and specification for improved data flow between processors and I/O devices.

 

Though he maintains an office at Intel's Folsom, Calif. campus, not far from where he resided from 1980 to 2006, he now works as a technical marketing engineer out of his home in the San Diego community of Pacific Beach. He lives with Nancy, his wife of 5 years and who he met while studying at UCLA.

 

Just four years from the sesquicentennial of the Brother Jonathan disaster, there's a murmur among the salvage community about a return to the wreckage that lay a couple of miles off Crescent City. Some say that four-fifths of the treasure remains down there just waiting to be discovered. Should an expedition team be formed with plenty of money and legal rights, don't expect the younger Privitt to be a party to the salvage mission at sea.

 

"I like working, but I'm just a Joe Average engineer," he said. "Plus, it's the constant bobbing up and down of being at sea. If I had sea legs I would be a submarine operator. It's a very profitable business. I'm at Intel because I get seasick."

'Bring Your Own Mac' Program Provides New Insight, Learning for IT

 

Putting Apple MacBooks to work behind the corporate firewall is something many small Silicon Valley startups may have been doing for years, but it may be less likely inside larger, established companies that rely upon heavily protected enterprise networks to manage email, store documents and dispatch software to employees around the world.

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Aaron Tersteeg has used MacBooks inside Intel since 2006 when he was part of an early pilot program. Today, he is an active user and part of a growing network of Intel Mac Users.

 

That is about to change inside Intel.

 

In late May, the company quietly unveiled a new program allowing employees to "Bring Your Own Mac" to work, marking a departure from Intel IT's decades-old focus on company-owned laptops based on Windows. It's also creating new learnings for the company's IT department and ushering in a potential new model of self-support.

 

Intel's estimated 93,000 employees aren't exactly making a mad dash to swap out their existing IT-issued laptops for a MacBook, but Macs are slowing trickling into the work environment. BusinessWeek reported on this trend with "The Mac in the Grey Flannel Suit" cover story a few years ago, but it may finally be coming to fruition as more and more IT shops test the waters.

 

"Today there are more than 600 Macs in the enterprise and we're getting about 10 new ones added each week," said Jim Ferguson, a client engineer in Intel's IT department who led the effort to formalize a program that started several years ago with a few pilots.

 

It hasn't been easy.

 

"When we first started we brought in Powerbook G4 laptops but they didn't support wireless network protocols," Ferguson said. "One of the biggest drawbacks was lack of compatibility between the Apple OS and Windows environment," he said.

 

As a result, a number of such enterprise applications as SharePoint and iMeeting didn't work properly. There were considerable security, privacy, and legal issues to work through as well.

 

Some of the Macs inside Intel today are owned and supported by the IT department, but the new program relies more on a self-support model, with employees handling a lot of the basics using their own machines, including technical support.

 

Intel's IT department, led by Intel CIO Diane Bryant, has been doing a lot of experimenting and testing of the waters with the shift to consumerization, in which employee-owned devices with multiple operating systems are granted access to the company's secure Internet. Bryant says the goal is to enable as many devices as possible in the IT environment to help make employees as productive as they can be.

 

In 2009, Intel told employees if they had a smartphone device they purchased on their own, they could bring it into the enterprise. In the first 3 months, some 9,000 employees took advantage of the program. The company has also allowed iPads behind the firewall, but very few have abandoned their laptops as a result.

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The shift to allowing Apple laptops in particular is something Apple fans working inside Intel have been waiting for ever since Intel chips began powering Apple computers in 2006.

 

Aaron Tersteeg, a software developer in Intel's Software and Services Group, loves the BYOMac program. He joined a smaller-scale Mac pilot program in 2006 on the heels of a handful of Macs being used by Team Apple, the sales team that led the initial engagement a year or so before. Since then, Tersteeg says he's moved on to his third MacBook. He says he prefers the Mac experience with its fluid and consistent interaction between applications, and the elegant interface.

 

"Media creation and management is top notch," Tersteeg said. "I can open almost any file instantly and I'm never hunting for a tool. The OS comes with almost everything I need."

 

Getting IT to Think and Do Different

Ferguson says the program has really forced Intel's IT department to "think different" about how the company manages its fleet of employee-issued laptops, and is driving IT engineers to expand their programming expertise beyond Microsoft to new operating systems and browsers.

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Jon Carvill is a new Intel employee who jumped at the chance to use his own MacBook Pro when he learned about the "Bring Your Own" MacBook program.

 

"The BYO Mac program has been a catalyst," Ferguson said. "Three years ago, most of the focus was on Windows or Explorer. Now most teams are working on Firefox and Safari instead of just Explorer."

 

Kevin Beaver, an information security consultant with Principle Logic has said bringing consumer technologies into the enterprise "is creating a more complex environment that was already extremely complex, and complexity is the enemy of security."

 

Malcolm Harkins, Intel's chief information security officer responsible for keeping Intel's online information safe, has said in earlier interviews that it's best to manage the risk and complexity up front. This is part of the philosophy inside Intel's IT department that has allowed the experimentation to continue.

 

"Unless you're moving toward the risk, you won't be able to shape it," Harkins said. "It's better to meet the demand rather than have the demand go around you."

 

 

Shifting Support Services

One of the biggest challenges Ferguson's team faced was how to integrate self-support into Intel's support structure.

 

"Self service flies in the face of everything within IT," he said. "But we think long term it is a lower cost option for IT because if we utilize people, we can build tech savvy employees who can manage their stuff over time."

 

The self-support model doesn't bother employees like Tersteeg.

 

"During the first year, things were challenging with limited support for Intel's core business tools," he said.

 

Even knowing there is IT support available today, Tersteeg says he really doesn't use it. Instead, he turns to the Intel Mac User Group site dubbed iMUG, where Mac fans discuss using Apple systems in the Intel environment.

 

"The iMUG forum is a great place to ask questions, share experience and BKMs (Best Known Methods)," said Tersteeg. "It is so much better than talking to someone by phone and hearing them read from a script. In the forum, the answers get debated and the best solution rises to the top, and there are tons of Mac fan boys and girls working to be the first to answer any question that arises."

 

So far, about 85 percent of MacBook users at Intel have technical job descriptions, which may help explain why support calls have been much lower than what Ferguson's team had expected.

 

"Support call volume was so low that our Technical Assistance Center couldn't maintain their skills. So we stopped using the TAC in 2010," said Ferguson. "We now have one contract worker who handles Mac support calls.

 

But Ferguson believes this is ultimately more than just allowing employees to use MacBooks and the Apple OS inside Intel.

 

"This program has laid the groundwork for the compute continuum," he says, referring to a vision where people can get a common, seamless Internet experience securely, no matter what device, operating system or browser they use.

 

With the rumored imminent launch of the newest MacBook Air with Intel's latest Core processors, Thunderbolt I/O technology and Intel graphics, there may be a lot more BYO Mac users inside Intel soon.

What’s in store for in-store? More technology, according to a recent RSR Research report, which found that 70 percent of retailers are empowering their employees with tech-enabled touch points to help their businesses to differentiate and evolve. The survey, co-sponsored by HP, said that by arming their staff with digital signage, self-service kiosks, mobile devices and other info-driven technology, retailers can increase productivity and boost multichannel selling opportunities. More is on the way, according to the report. Intel’s "Retail Interactive Fashion Experience," for example, enables shoppers to use digital signs with multi-touch commands to browse through the store's inventory of blouses, dresses, pants, and accessories. Intel is currently in talks with apparel makers and retailers, including a national department store chain, to deploy the concept in hopes of convincing them that this invention – or a customized version -- could result in increased customer brand loyalty and improved profitability, among other benefits.

With few variations, buying clothes from a store involves a well-worn routine: Browse the racks, select a few garments based on vanity, price, need and other factors, then try them on in the dressing room.

 

But what if you didn't have to drag items into the dressing room and could still see what the outfit will look like on you? Or what if the store didn't have your size? Help is just a touch screen tap away.

 

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The interactive retail shopping concept allows shoppers to use multi-touch commands on connected displays to browse through the store’s inventory.

 

Designed as a new kind of shopping experience that combines the best of online and in-store shopping behaviors, the concept is part of Intel's "Connected Store" that showcases the company's latest technology for the retail and digital signage markets. Intel's "Retail Interactive Fashion Experience" enables shoppers to use digital signs with multi-touch commands to browse through the store's inventory of blouses, dresses, pants, and accessories. The user interacts with on-screen controls to filter contents by price, style, material, size and other categories.

 

Potential candidates are sent to a "favorites" area on the screen, and from there the consumer can combine pieces creating outfits over a digital mannequin. Solo shoppers can even get a second opinion by sending a snapshot of their picks to friends and family for real-time feedback.

 

Shopping the technology around

 

Intel is currently in talks with apparel makers and retailers, including a national department store chain, to deploy the concept in hopes of convincing them that this invention – or a customized version -- could result in increased customer brand loyalty and improved profitability, among other benefits. At the National Retail Federation Conference earlier this year, Intel teamed up with adidas, Best Buy, Kraft Foods, and Proctor and Gamble, in addition to the MIT Media lab, to create a futuristic showcase and demonstrate what's possible.

 

"It's not our intention for this solution to be sold as-is. It's a conceptual thing." said Shailesh Chaudhry, a strategic marketing manager in Intel's Retail Innovation division. "We're using this proof of concept to drive engagements,"

 

So if a retailer is turned off by the prospect of a large 85-inch plasma screen, that's fine with Intel, which will build to suit.

 

"Our goal is to drive retail innovation and deploy a brand new category based on our technology." Chaudhry said.

 

One industry analyst who thinks Intel might be onto something, albeit somewhat ill-timed, is Gartner's Van Baker.

 

"What Intel has is going toward where the future of retail is going," said Baker, who covers consumer behavior as it relates to emerging technologies in the retail industry. "I don't think we're going to be there soon, but it puts an interesting concept in the market and gives retailers a version of where things might be heading."

 

Intel's concept is being marketed at a time when retailers have other things on their mind besides newfangled technologies, according to Baker.

 

"Retailers are worried about revenue right now and consumers opening their wallets again," he said. "They're focusing on the basics right now: having the right products, having them in stock, having them priced right and merchandising them well. They're going to stay focused there until there's evidence the economy is turning around.

 

"It's not the environment for retailers to be marching forward and investing in leading-edge solutions. Their thinking is if nobody's walking in the door then it doesn't matter."

 

Hand gloves to baseball gloves

 

Intel's concept is "very scalable," according to Chaudhry. A sporting goods store, for instance, could have a large selection of baseball mitts, but good luck to the lefty looking for an adult-sized pitcher's glove. The digital sign could let the southpaw know availability and cost, and if the search comes up empty and the player is patient, swipes of the customer's loyalty and credit cards would have the item shipped prepaid from a central warehouse.

 

"A lot of the technology Intel is demonstrating lets retailers better leverage inventory assets with their store and warehouse operations," Baker said.

 

Baker repeatedly cited a recent study that found that 67 percent of people who go into a store and have a lousy experience with a sales associate will simply leave.

 

"If you can, through a self-service kind of approach, get customers the information they need to make a purchase decision, even if the sales associate is hard to come by or not knowledgeable, that bodes well for the retailer," Baker said.

 

"Our data also shows that people like to go online and do a lot of research first, then go in a store and buy the product. If a retailer is able to give the consumer an online type of experience in the store to help them find, say, a type of garment in an assortment of colors, this extension creates an environment where this type of technology can help create revenue."

 

Chaudhry said because competition is light, acceptance of these new proof of concepts is slow, which is why you may not have seen one.

 

"When working with the retail industry, there's a long lead time for anything like this," he said. "There's the prototype, then pilots of multiple kinds that can take years. Then after even more stages, and if everything is successful, there's overall technology integration. You have to connect them back to their existing infrastructure."

 

If discussions continue to go as well as Chaudhry said they are with one particular department store, shoppers could be trying on clothes with the help of Intel technology within a few years.

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