09.28.05

Web services

Posted in Technology Ventures at 5:16 am by Ray Wu

Since I first started my venture journey in 1999, XML/web services technology has been a topic of interest and continues to be very hot topic today. It is less about web services per sa, one of the real benefits is on the ease of integration. It is actually funny to see how technology world keeps on reinvent itself. Integration moves from point-to-point CORBA/DCOM of the world, to application server/middleware, to a loosely coupled WS/SOA model or ESB (Enterprise Service Bus). I think the trend is right. WS is a much easier for integration, especially B2B space. But have all these upgrades really necessary to save customer money? maybe, but I am cautious when the technology innovation is done for the sake of technology. I guess that’s why it takes so long for the XML/Web service startups make real money. But I am glad web services finally come into the main stream of the CIO world. Infrastructure technology is not a fun space these days, even though it is a very cozy and familiar space for me. The startups are too many to list, so here are some from top of my head:

  • Management: Actional/Westbridge, Amberpoint, Blue Titan, Infravio
  • Integration: Cast Iron, IntaMission, Cordys, Polarlake, CapeClear
  • XML Processing: Data Power, Conformative, Sarvega (now Intel), Xambala, Tarari

09.26.05

Software as a service

Posted in Technology Ventures at 5:17 am by Ray Wu

After covering a few open source startups, I am going to expand more to other areas such as software as a service. Software as a service is nothing new. This reminds me of all the ASPs out there in the old dotcom days when I actually spoke in several conferences on the exact topic. Today’s model is somewhat different compare to a few years ago:

  1. Better connectivity
  2. Cheaper development resources through open source and globalization
  3. More customer understanding
  4. Better architecture such as multi-tenant support
  5. Better integration through web services

Here are some of the interesting ones I see out there:

  • RightNow Technologies: On Demand CRM
  • Collabnet: On demand distributed software development solutions
  • Interact: On demand ERP
  • Arena Solutions: Product LifeCycle Management on demand
  • Ketera Technologies: On demand spend management
  • Adexs: Document exchange

There are also a few in the open source space, see previous posts

09.23.05

Long term differentiation

Posted in Technology Ventures at 5:17 am by Ray Wu

What is a long term differentiation for a business? Traditionally, there are 3 dimensions:

  1. Operational efficiency
  2. Product innovation and leadership
  3. Customer intimacy

In high tech, Dell is (1) and (3), Apple is (2) and (3) probably trying for (1) with low end Mac. Cisco, SUN etc are all trying to occupy all 3 dimensions. I have my doubts on whether it is possible for a company to excel at all three dimensions. One dimension layer that can be thought to be in parallel is a “global” dimension. The first 3 dimensions pretty well covers a specific market, but one needs to think carefully in a global economy. On a global dimension, a product innovation in one market does not guarantee its place in another market, neither is customer intimacy. For example, a 3G wireless leadership in Asia does not mean it would work well in US. NTT Docomo model would not work in the US because of the population density. And vice versa, bringing US’s model to Asia without modification would almost certain fail or take a long time to become successful.

09.21.05

Open source software

Posted in Technology Ventures at 5:19 am by Ray Wu

In general, Open Source vendors have multiple types of revenue model:

  1. Hosted model: Software delivered as service that charged on a periodic basis (ie. monthly)
  2. Support model: Support, maintenance and upgrade type of service model
  3. Hardware model: hardware solution that encapsulates open source function and deliver as a complete out-of-the-box solution
  4. Consulting model: Free opensource, but charge for consulting
  5. Duel license model: free license for developer, but charge for advanced / commercial deployment
  6. Layering model: Use open source to commoditize the layer that is not critical or traditional best provided by competitor, and make money from associated solutions. ie Open Solaris

Of course, the real interesting one is the combination of all models :)

  • SugarCRM: open source CRM — VCs: Draper Fisher Jurvetson, Walden International
  • Scalix: Linux E-mail and Calendaring for the enterprise — VCs: Mayfield, NEA, MDV
  • Levanta (Linuxcare): provides software for Linux configuration management, provisioning, and software deployment across commodity hardware, blades, virtual machines, and even mainframes. — VCs: Morgenthaler Ventures, VSpring Capital, Walden International, Kleiner Perkins
  • XenSource: Open Source Xen hypervisor to support and develop the world’s best virtualization technology — VCs: Kleiner Perkins, Sevin Rosen, Accel
  • SourceFire: Security hardware based on opensource SNORT –VCs: Greylock, Sierra Ventures, NEA, Sequoia
  • Zend Technologies: PHP for enterprise — VCs: Azure Capital Partners, Index Ventures, Intel Capital, Platinum Venture Capital, Walden Israel Venture Capital
  • JBoss: Application server –VCs: Matrix
  • mySQL: Database –VCs: Benchmark, Index Ventures
  • SendMail: enterprise class e-mail infrastructure — VCs: Adobe ventures, Morgan Stanley, Novell, Intel
  • Jotspot: company built on Wiki foundation –VCs: Mayfield, Redpoint
  • Groundwork: opensource IT infrastructure management - VCs: Cannan, Mayfield

09.16.05

Protegrity acquires Kavado

Posted in Technology Ventures at 5:19 am by Ray Wu

When I first noticed application firewall in 2000, it was not a space to be recognized by research analysts like Gartner. But it made sense at that time since Internet was new, there were customers who need protection from cookie hajacking and SQL injection etc and it was hard to train programmers well, so the application firewall market has customers. Protegrity and Kavado will have nearly 300 customers across all vertical markets, 2/3 of that probably comes from Kavado. There is a market for this type of solution, but probably not big enough for a successful VC return. So the 2 software application firewall vendors I used to watch: Kavado and Sanctum are all gone. Sanctum got acquired by Watchfire, now part of F5. Hardware ones seem to have more legs: Teros, netComtinuum and Imperva. Teros recently got another $8M of funding. Hardware startups have more room to play due to its HW speed enhancement and ease of deployment. Software ones will be OK if it has more flexibility, comprehensive solution, integration points to existing systems. The issue is less of a technology leadership, more of a customer channel and partnership. As customers continue to look for vendor consolidation, in my opinion, startup exit will become more and more M&A driven than IPO

09.15.05

Events

Posted in Events at 5:20 am by Ray Wu

I am going to be a panelist on these 3 events coming up, stop by if you have time to catch up…

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