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Bandt, who says that six, not nine, months had passed, defends the project's progress in light of the newness of health-care data warehouses. "There are core requirements that you think you have to have, and when you start digging in, it's more difficult than you thought. When I arrived, there were no Internet connections, no Unix network, no machinery. We got it in January and had the first connections to the database in June." The development could have gone a lot worse, he adds. "There are organizations many times larger than Market Insights that made the same platforms decisions we did, and they were six months behind us."

Despite the conflicting expectations and lack of progress, Louie and Milano wanted Bandt to stay on. The modest salary they were paying him was affordable, and they wanted the project done. But the three were unable to agree on the equity stake Bandt would receive. In October he left to join Healtheon Corp., in Santa Clara, Calif. "It was probably a lack of experience all around in understanding how long [it would take] and how complicated some of these things are," Bandt says now. In hindsight, he adds, "I don't know if I would have made the same technology decisions, but I was the only one who could make the decisions. There really wasn't anyone else around for me to talk with about these things."

By the end of 1998, more than a year after the project's launch, nothing had worked out the way it was supposed to. Bandt was gone. The data warehouse was far from finished. Inpatient and outpatient databases for all states had been loaded in, along with the financials for all U.S. hospitals. But outside the four walls of Market Insights, users still had minimal access to the warehouse. The ability to do sophisticated analyses that Louie and Milano had envisioned was still a pipe dream. And stuffed with data, the warehouse performed sluggishly.

Saddled with expensive equipment and no service to sell, Louie and Milano had to regroup. All of 1998's profits had been sunk into the warehouse. After Bandt left, the founders accessed a line of credit for an undisclosed sum. They used the additional funds to hire programmers. By year's end, labor costs for the project tipped the payroll at $250,000. Even worse, deploying programmers to the warehouse project left existing, more salable products lagging and unfinished. A grim Milano found himself explaining the project's delays to customers to whom he had proudly talked it up only months earlier.

Louie and Milano have taken several steps to redirect Market Insights and craft a strategy to stabilize the company and complete the warehouse project. A new chief operating officer, vice-president of sales, and four sales reps came on board early this past summer. The company also dipped into its incoming revenues to hire another two full-time programmers to fine-tune the software and begin speeding up the data warehouse so it has more appeal for users. That move freed up the company's longtime in-house developer to work on new software products.

Bit by bit, Market Insights is beginning to wring sales from the warehouse effort--though not necessarily in the way its founders had hoped. Early proponents of data access waxed on about its egalitarian nature. Throw open the doors to industry data collections, they predicted, and there's no limit to what will be discovered. The reality has been much more pedestrian. "People don't want all the information that's out there," says Louie. "They want a middle person like Market Insights to make sense of it for them." He still feels the company's future lies in one centralized Internet application that allows access and analysis of all Market Insights' data, "but it's further away than we anticipated. I mean, think about it: our clients are CFOs. They're high up in the organization, and they don't have a lot of time on their hands. Not all of them have Internet access, and those that do, don't want to do analysis."

Louie calculates that Market Insights would need 100 users paying an average subscription fee of between $5,000 and $10,000 each in order for the project to begin to break even. "I don't see 100 users logging on at this point," he admits. So Market Insights is using the data warehouse to branch out from its core hospital and provider clients. Last spring the company launched National Hospital Almanac, a $1,200-a-year subscription service that's designed to appeal to anyone related to health care: HMOs, PPOs, medical-device manufacturers, even investment bankers. It offers unlimited Web access to portions of the data warehouse. But the Almanac is a Java application--Market Insights still has no Information Advantage-based products or services up and running--and allows little more than a static look at the data.

Had he to do it over, Milano would have planned in more detail--and put everything in writing. Along with Bandt and Louie, he agrees that the decision to use Unix--a complicated operating system that no one had much experience with--made everything tougher. But he still believes fervently in Market Insights' data warehouse as the future of the business. And maybe that's the lesson here. Technology is immensely powerful--and immensely seductive. Handling a major new technology project in-house can seem sensible, expedient--and perfectly feasible. It's all too easy to ignore the inevitable problems and risks that face even an experienced company.

"Our decision, which we don't regret, was that although we could have stayed a nice mom-and-pop store where we each made a good living, we wanted to become a supermarket," says Louie. "We took the risk, and we can realize the reward. It's just not what we had hoped for."

Deborah Asbrand is a freelance writer based in Boston who covers technology and business.

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