Tomorrow, Gray will be saluted as Massachusetts Small Business Person of the Year by the US Small Business Administration. He will be feted during an awards luncheon at the Seaport Hotel at the World Trade Center in Boston. Senator John F. Kerry, who nominated Gray for the award along with US Representative John F. Tierney, will be the featured speaker.

Last week, Gray was in Washington to take part in National Small Business Week activities, which included a meeting at the White House with Clinton. Gray, who remains at the helm of Shore.Net despite its recent sale for $43 million to Primus Telecommunications Group Inc. of Virginia, is humbled by the recognition.

"It's really an honor I couldn't have ever imagined when I first started," Gray said last week at the company's Oxford Street headquarters. "I think of this not only as an affirmation of what we've done here at Shore.Net, but also what's been happening here in Lynn."

Gray lives in Swampscott with his wife, Elizabeth, and their three daughters, Rebecca, 8, Samantha, 6, and Josephine, 5. A self-taught computer programmer at the age of 13, Gray earned a degree in biochemistry from Harvard University in 1982. He later worked as a computer specialist at Bell Laboratories and at Price Waterhouse in Silicon Valley before striking out on his own.

While Lynn officials once cast a wary eye on Gray, the city is now looking to him to help fulfill a promising 21st century. Shore.Net, which now has about 32,000 Internet customers in Greater Boston, is projected to have $13 million in revenues this year. The company has 85 employees. It is the anchor of the city's fledgling Cyber District, which now has about a dozen new media companies operating in old downtown buildings.

City officials are working to establish Lynn as a regional telecommunications hub. A $15 million trans-Atlantic fiber optic cable is now being connected around the city by Worldwide Telecom (USA) Inc. The cable is expected to be hooked up by July and fully operational by next March. It will allow for the rapid transmission of secure data by area companies. A second major investment by a fiber optic cable company will be announced soon, officials said.

"This cable is really a shot in the arm for Lynn. It's attracted a lot of attention from other businesses. It has jump-started our Cyber District," said Stephen Harausz, Lynn's development director.

The Cyber District, home to companies with such trendy names as Looktrade.com and Infoboard, has sprung up around Shore.Net, which offers high-speed Internet access to high-tech start-ups. The presence of Shore.Net, a full-service Internet service provider, has given the Lynn Cyber District a competitive edge at a time when other aging cities and towns, such as Haverhill and Amesbury, also are launching cyber districts.

"The success of Shore.Net has helped separate us from other cities trying this," said Kevin Donahue, executive director of the Lynn Area Chamber of Commerce. "What we've been able to do is use Shore.Net as a marketing tool because they provide the infrastructure for these companies."

Harausz credited Gray with launching Lynn into cyberspace. "He's a cutting-edge entrepreneur. He's helped encourage others to do business in Lynn," Harausz said, adding he's met with representatives of four banks interested in establishing a presence in Lynn as a result of Gray's success. "People are starting to take notice."

Gray saw promise in Lynn as early as 1992. That's when he moved a software consulting business out of his Swampscott home and into cheap office space in neighboring Lynn. A year later, he took the leap into cyberspace, betting that the Internet, then largely unknown outside of government and academia, would be a commercial success.

He formed Shore.Net to provide low-cost Internet access to consumers and businesses over telephone lines. He risked all his personal savings to buy computers, servers, and modems to hook into the Internet. "I was early to market. I believed that the Internet was going to bring about real change. I wanted to be part of that," Gray said. Certainly it was no easy task. Like most budding entrepreneurs, Gray's early years were spent working 70-hour weeks and scratching around for capital. In 1996, with his savings depleted, his assets at risk, and his credit line maxed out, Gray turned to the city for help.

He applied for a government-backed $25,000 loan to invest in new technology for the business. It was ultimately approved by the Lynn Economic Development Industrial Corp. The loan got him over a cash crunch. Banks again started to lend to him. In 1997, with residential customers logging onto Shore.Net, Gray took a step toward expansion and innovation.

Backed by a $500,000 loan from the US Department of Housing and Urban Development, Gray purchased an abandoned building in downtown Lynn, built in 1896 as the city's original telephone building. Since it was already wired for telephone service, Internet connections were already in place.

The building, which cost Gray $1.5 million to renovate, gave Shore.Net the muscle to expand into new products, such as high-speed Internet service and network Web-hosting. "This really gave us the infrastructure we needed to grow," Gray said.

Of course, growth is always a double-edged sword. Last year, realizing Shore.Net had grown as much as it could on its own, Gray reluctantly decided to sell his company. He hired a private acquisitions firm to market it, and in March, Shore.Net fetched $43 million in cash and stock from Primus, a global telecommunications company. "I held out longer than most [start-up Internet service providers], but I had to [sell to] sustain the kind of growth rate we had," he said.

As part of Primus, Shore.Net will remain in Lynn, a condition that was key in Gray's decision to sell the company. It's Oxford Street headquarters will be converted to a data center. The company's 85 employees will relocate to the top floor of the Clock Tower building on the Lynnway.

As for Gray, he, too, wears a new hat. In addition to running Shore.Net, he's the new general manager of Primus's domestic Internet business, responsible for developing a national Internet strategy. "It's an amazing challenge," said Gray.