After some trials and tribulations, I have decided to move this blog to a new location, in the hope that these problems will go away. So, for new postings, please check this link. Once I find everything is working fine at the new location, I may move all my postings there. Stay tuned.
Ancient Hindu scriptures and mythology talk about sages, with powers gained from meditation, who can create and move objects with their thoughts. These fables seem to be moving towards reality, at least virtual reality :-) Dean Takahashi in his coverage of CGDC 2007 in San Jose talks about Emotiv's brain-computer interface that convert a user's thoughts into actions in a computer game. Emotiv is a San Francisco based startup with Australian connections and a star studded executive and founding team. This is cool technology, bordering on Star Trek, where kids can cause action in a computer game without literally lifting a finger. As Dean points out, Emotiv is not the only company with similar technology. Neurosky, a Silicon Valley company, has similar technology and is targeting a wider range of industries and applications. Wired Magazine talks about mind controlled wheel chairs for the handicapped.
However, the computer game applications lead me to wonder where my kids are going to get any exercise at all, if this kind of thing catches on. :-) The Wii was taking a step in the opposite direction, with the game players actually having to move the control to simulate a tennis stroke or a golf swing. Just when I thought technology was moving in the right direction, we now have real mind games on the horizon. Technology is indeed moving at the speed of thought. It will be interesting to see how long it takes for the first games with this technology to be commercially available.
Talking of Steve Jobs and his creations, there seems to be trouble brewing in the general direction of MP3 players. Patent suits are an unfortunate side effect of the technology industry. Companies need patents to protect their IP, but they rarely go suing other companies on the basis of their patents unless they are in serious danger of losing business or there is huge potential for a good return. The latter seems to be the case in Alcatel-Lucent's suit against Microsoft. It looks like Microsoft may have to shell out $1.52B if the ruling holds. Apple Insider discusses the impact of this for Apple, and its not pretty. Here is one case where Apple must be hoping Microsoft wins the fight ;-) Technology does indeed make for strange bedfellows. It will be interesting to see how this one turns out. Success does breed a lot of enemies. Apple has succeeded in winning many difficult cases and it will be fun to see how this one turns out, if indeed there is a lawsuit.
Yes, that's how Jean Louis Gassee describes Silicon Valley. CNET covers SFMOMA's candid videos from Valley survivors. The stories ring true and are touching and funny. Of course, they represent only a small cross section. When powerful ambition, money and technology collide some amazing things come out of it. The stories in the videos expose some of the ambition and the heartache. What they don't capture is the pace at which change occurs here. Who says you can't time the market ? There are many extremely successful people in the valley who got there by doing exactly that. Of course, as I discussed last week, you could attribute that to karma :-) But, then there are the true legends like Steve Jobs or Larry Ellison who truly deserve the success they have earned, simply because they have sustained it over very long periods of time. They have transformed their passion into world changing technology and reaped the rewards, again and again. I am sure they will not be the last and that's what makes the Valley the Disneyland of technology.
The Mercury News has been discussing the windfall from YouTube's acquisition by Google. The disclosures show how far and wide the impact of the Valley's wealth creation goes. The beneficiaries include YouTube employees from the founders to admins, VCs (of course), but also some interesting others like Maury Povich and Forrest Sawyer. These articles are interesting in that they provide a glimpse of some of the people who get to invest in VC funds and startups like YouTube. I also liked the comparison of the valley to a giant casino with the acquisitions and IPOs playing the role of payouts at the slot machines. To be certain, wealth is created and shared in an extraordinarily egalitarian way in the Valley. But, most people outside the Valley do not see the excitement of the innovation happening here and the risk taking. They do not see the many startups that fail and the entrepreneurs who pick themselves up and go at it again. They do see the results of the innovation in the many end products which many use all over the world. There is some element of luck in who makes it and who does not, but I would call it karma more than luck :-)
The title of the talk was "Building a company that can turn deserts into forests". Coupled with the offer of a wine tasting and hors d'oeuvres at the upscale Fremont Hills Country club, free to MIT alum, this was an offer I could not refuse. Yesterday's (February 8th) event was hosted by ACG (Association for Corporate Growth) Silicon Valley. ACG is a venerable organization founded in 1954 and the Silicon Valley chapter is focused on helping small and midsize valley companies grow with contacts, ideas, training and networking. The speaker for the event was Hans Peter Michelet, Chairman of the Board of Energy Recovery, Inc. (ERI), and the talk was moderated by Sramana Mitra, an entrepreneur and MIT alum herself. ERI's product, the PX Pressure exchanger is a ceramics based reverse osmosis system (as opposed to thermal/evaporation), which claims energy efficient desalination to provide drinking water from desalination of salt water at rates cheaper than we buy water in California. HP claimed that 20% of the energy consumption in California is from pumping water.
ERI's primary customers (97%) are outside the US, though many are US companies doing business abroad. The largest deployments are in Spain with 23 large desalination plants and ERI claims to have 90% of the Chinese market. The sales are however very long cycle - 4 years or more.
There are major areas worldwide which have very serious water supply problems. In Chennai, India, the city gets water trucked to homes and businesses, to cover for shortage. Of course, countries like Saudi Arabia have very large water needs which are satisfied today by evaporation based systems. In California, where we depend on water from the Sierra, if the global warming predictions come true, we may be in need of water too. In years where we have low rainfall, we have water supply and usage regulated.
So, clearly, clean water is a worldwide problem and a more urgent problem in some areas than in others. ERI claims to have a lock on their technology with patents and sees large growth opportunities worldwide. Overall, a very interesting evening and talk. Sramana Mitra has a much more detailed a multipart write up of the talk on her blog.
One is led to believe that happy IPO days are back again, if one were to take a look at what Accuray Inc. of Sunnyvale, CA did yesterday and today. They make the CyberKnife a non-invasive robotic radiosurgery system to treat tumors in the body. They claim sub-millimeter accuracy ! Accuray (ARAY) priced their IPO at $18 at the high end of the range. The stock opened at $21 today (2/8/07) and closed at $28.47, up over $10 (58% for the day), giving the company a market cap of over $1.5B. Heady stuff ! Reminiscent of the heydays of the valley in 1999 and 2000. Of course, one swallow does not make a summer. But, coupled with the rise of ISRG , indications are that the biomedical space may show hot growth for Silicon Valley, as I discussed in my Feb 4th posting. The opinions of the CSPA VC panel that 2007 could be a good year for the IPO market (see my Jan 24th posting) seem to be heading in the right direction too, if ARAY is an indicator.
When we think of Silicon Valley, we usually think of technology and the latest and greatest. We do not usually dwell on the great weather or the fruit orchards of the past, left as fruit trees in our backyards. We also consciously avoid thinking about the earthquakes the Bay Area and the Valley have experienced. In my twelve plus years in the Valley, I have been fortunate to only have experienced a few minor ones. But, today's article in the SJ Mercury News on the estimated magnitude of the big quake of 1868 on the Hayward fault, reminds us that it should never be too far from our thoughts, at least in terms of being prepared. The column notes that there is a 27 percent chance that a 6.7 or higher magnitude quake will occur by 2032. But, this hardly tells us when one will occur or how devastating it can be. In the first few years in the Bay Area you tend to worry about it, but after a while it becomes apparent that quakes occur in Seattle, the Northeastern US, in India (remember the deadly one in Gujarat?), Mexico and many other places in the world. But, sometimes out of morbid curiosity one tends to check out the USGS earthquake maps for California. These are really great. Actually, the USGS Earthquake center shows earthquakes from all over the world and region by region with exact times and magnitudes. They are cool to see on the map, but we hope that we never have to deal with a big quake.
On Thursday, Jan 31st, I attended a seminar on Biomedical Technology hosted by Silicon Valley Technical Institute. The instructor was Dr. Sudhi Gautam, an ex-ENT surgeon with a PhD in Engineering from the Indian Institute of Technology. For a layman in biomedical technology like me, it was an eye-opener. Overall, a most excellent introduction to biomedical technology.
To begin with, I did not know the difference between biotechnology and biomedical engineering (not to be confused with bioengineering). It turns out that biotechnology is best defined as the technology concerned with manipulation of living cells and is most related to biology. Biomedical engineering is at the convergence of technology, medicine and biology and is focused on developing medical devices and systems. Bioengineering is concerned with modification animal and plant cells by manipulating their genetic and cellular properties. So similar sounding names, with very different meanings. Furthermore, the regulatory approval process in the United States is dramatically different for biotechnology compared to biomedical devices.
Biomedical devices are classified based on their level of risk application and impact, and in the low risk devices can be approved anywhere from 90 days to 3 years. Biotechnology applications, especially where they have therapeutic applications go through the same cycle of approvals and clinical trial as pharmaceutical drugs and can generally take anywhere from 4 to 7 years or more to get approved. Some of the higher risk biomedical devices like pacemakers and robotic surgery machines like those from Intuitive Surgical can also take as long to be approved by the US regulatory bodies.
Where it gets very interesting is in that biomedical engineering, because of its intersection between engineering and medicine, has a great deal of relevance to Silicon Valley. Even with all the advances in medicine today, the gap between medicine and technology outside of medicine is huge. This makes the health care system very inefficient. This triggers the opportunity, which is so characteristic of others, which Silicon Valley exploits best, with its mix of capital, technology and entrepreneurship. California has close to 2600 biomedical companies, with over 700 in the Bay Area alone. Silicon Valley appears to be the biggest hub for biomedical technology, followed by Orange County, Minneapolis and the Northeastern US. Many of the Bay Area companies are spinoffs from Stanford, UC Berkeley and UCSF. The estimate is that 50% of the world’s biotech and biomedical companies are in the US and a very high percentage of them are in California. US biomedical devices are valued worldwide due to the rigorous approval process and quality requirements they are subjected to. These devices require a significant amount of engineering design and and in many cases have significant semiconductor content. Where the devices are endorsed by Medicare or the insurance companies for use by their patients, the volume can also be considerable at pretty good margins.
The latest biomedical device company in the news is Intuitive Surgical (mentioned earlier) of Sunnyvale, CA. They make the robotic surgery machines, called the da Vinci surgical system. These are approved only for three or four types of surgical procedures in the US (they are seeking approval for more types of procedures), but are still in hot demand in India and other countries. The latest rumor is that their machines have been approved for hysterectomies by the US regulatory bodies. This may account for the fact that their stock (ISRG) surged over 17% on Friday, February 2nd alone and is up close to 50% in less than a month.
So, following semiconductors, computers, the Internet, the iPod and iPhone, we have a lineup of alternative energy, biotech and biomedical products to supply the world. These are exciting times indeed for Silicon Valley.
Friday, February 2nd, 2007, was big news day in the global warming story. A group of international scientists concluded that global warming had a 90% chance of being caused by humans. I wonder why they don't come right out and say it is our fault. I guess the last 10% is always the most difficult. :-) In any case, by a strange coincidence, Al Gore (he of "An Inconvenient Truth" fame) spoke yesterday at the 2007 State of the Valley conference on the Valley's role in saving the world again. Many of the same players are back again. VC's like John Doerr, entrepreneurs like TJ Rodgers, and even Al Gore. Matt Marshall talks about some entrepreneurs like Marc Porat who have been there and done that, who are back again with not one, but three green building companies. A lot of startups will seek money, many will be funded and some may even cash out. Clearly, its deja vu all over again, as Yogi Berra would have it. But, this time there is a difference, in addition to making money, the entrepreneurs will have a feel good feeling that they are genuinely in it to save the world, not to mention the Bay Area. Not a moment too soon, either. I saw projections in the news which would put San Francisco International airport and significant portions of the reclaimed land in the Bay Area underwater in a few decades if global warming causes sea levels to go up significantly.
I had barely caught up with Web 2.0 to find its already passe ! Today's SJ Mercury News has coverage of the DEMO conference by Dean Takahashi, (one of the journalists who can tell you the most about technology and Silicon Valley). He defines Web 2.0 as the world of blogs and podcasts and describes beyond that as sharing " our own books, photo albums, greeting cards and movies" online. He goes on to talk about companies like Ink2, OurStory, SharedBook and others which would entice us to go beyond Web 2.0. Somehow I see ghosts of 2000 in this scenario, but maybe its because I was too close to the bust :-) But, Dean also seems skeptical about the ability of these companies to get us past our own inertia and share so much of ourselves. But, if YouTube can generate so much user generated content, maybe there is hope, and big buyouts, for more Silicon Valley companies, after all. For further coverage of the DEMO conference you can catch Dean's blog.
Speaking of the Internet, the other interesting item in the Mercury News today was how Al Gore has become a Valley guy. My last direct sighting of Al Gore was when he spoke at our convocation in 1996 and the MIT Hackers played Buzzword Bingo with his speech. But, he clearly has the last laugh now, with his movie an Academy Award nominee, and close ties to Apple and Google, arguably two of the best technology companies in the world. Maybe I'll see him again one of these days, in Cupertino too.
Of course, this is not strictly about Silicon Valley or technology, but news from MIT always excites me. Not only because of the alma mater status, but usually because the ideas are fundamental in their potential to change the status quo. The latest is on an MIT-led panel on the prospects for geothermal energy. Geothermal energy, is not new, actually, its as old as the planet itself :-) But, its rarely tapped as a source for energy. What most surprised me in this particular report was the comment from Prof. Nafi Toksoz that the electricity produced by geothermal energy systems in California, Hawaii and Nevada currently is comparable to that produced by wind and solar sources combined. The challenges with this source of energy are signficant. Drilling has to exceed depths of 5000 feet even in the most promising areas. But, at least it does not increase greenhouse gases or radiation :-)
Well, ARMA Group seems to be on a roll. Today's San Jose Mercury News discusses the question of who funds the Silicon Valley Wireless Network. If you recall we posed the same question in our coverage of the WCAI event from January 19th. In general, this has been a question which has dogged fixed and mobile wireless networks over the years. Some may recall Metricom which tried to deploy a mobile wireless network, Ricochet, in 2000. They had significant experience in wireless and good technology, but the revenue recovery posed a problem which was too much to overcome for the company in a short period of time. But, maybe technology has advanced over time and costs have come down and there are more interests willing to pitch in to develop a wireless network for the Valley.
Its not often that one gets ahead of Reuters in the news business. But, ARMA Group would like to claim a small victory on this one :-) See our coverage of the CSPA event earlier. Today there is a Reuters article on prospects for Tech IPOs and it looks very strong for 2007. Of course, if it turns out to be true, this could mean a very strong year for tech stocks in general. Shades of 1999 ! Hopefully, this time we avoid the subsequent bust. Time will tell whether SOX compliance cleaned up the corporate act.
CSPA held its first event for 2007 at the offices of Wilson Sonsini at 950 Page Mill Road in Palo Alto on January 17th. It was a VC panel titled VC Outlook for 2007: Looking down the Money Trail. It was apparently so popular that it was oversubscribed. I was one of the lucky ones who happened to make it well and early to the event in addition to preregistering. The CSPA usually does an excellent job of its events, the last one I attended in 2006 being an evening with the legendary Vint Cerf, who can legitimately claim to be one of the inventors of the Internet. This event was no exception. The panel was moderated by Steve Bengston of Price Waterehouse Coopers with John Steuart of Claremont Creek Ventures, Eric Dunn of Cardinal Venture Capital, Gus Tai of Trinity Ventures, Pete Moran of DCM Doll Capital management and Tom Rosch of Interwest Partners as panelists.
To me, the most interesting part was Steve Bengston’s presentation on the MoneyTree Report – Update for Q3 2006. The MoneyTree Report is jointly produced by Price Waterhouse Coopers and the National Venture Capital Association and is in its 12th year, and as such can be expected to be based on fairly reliable data. The presentation focused mostly on US venture capital, with some interesting comparisons to the ROW (Rest of the World). 2006 looked to be on track to show total investments of about $25B, with roughly $6B a quarter for the first three quarters. This would make it the best year since 2001 ($40.5B) and higher than 1998($20.7B). Its almost as if the boom years are here again. Of the Q3 2006 investments (~$6.242B), 32% or ~$2B (250 deals) was invested in Silicon Valley and nearly 50% of the total was invested in California if you add the San Diego, LA and Sacramento areas. What was more interesting was the comment that Silicon Valley's share of VC money has not gone down over the years. Of course, in comparison for most of the ‘80s and till 1995 the total annual investment was only around $3B. 2000 of course, the year of the big boom showed total investments of $104.4 B. So, even after the tech bust of 2000, the showing of ~$19B till Q3 for 2006 indicates faith in technology and Silicon Valley to generate the next big thing.
The bulk of the money went into Series E or later rounds. Median deal size was $5M. Biotech accounted for $1.14B (95 deals), with software following at $1.095B(186 deals) and telecommunications at $848.3M (72 deals). Clean technology (industrial/energy) accounted for 9.2% of the Q3 2006 deals tripling in two quarter from about 3%. So, probably the perception that clean technology may be the next big thing from Silicon Valley may indeed have some credibility. Surely, my friends at the Gunther Portfolio can take heart from this trend. However, today's coverage of the Clean Tech Summit in Palm Desert, CA by CNET points out that despite the influx of VC money and strong demand for solar technology, hurdles remain to widespread deployment.
The top three most prolific VC firms for Q3 ’06 in terms of investment were Intel Capital, New Enterprise Associates and Draper Fisher and Jurvetson. In terms of exits, the IPO market was weaker in 2006 than in 2004 or 2005. However, 2007 is expected to be a hot year for IPOs, with several high quality companies waiting in the wings. SOX compliance was ensuring the quality of the companies.
The VC panel gave their opinions on what they looked for in funding startups. Areas of interest ranged from internet search, click fraud, RFID, casual gaming, internet advertising, intersection of IT with healthcare, pharmaceutical, biotech, medical software, digital media, software as a service, powersaving technologies and ultrawideband wireless etc. In the panel’s opinion its as easy (or difficult) to get funding as ever. Though some of the VCs suggested that it may be possible to get funding with a brilliant idea on a whiteboard, others stressed the need for an unfair advantage, a strong team who has done it before, market or customer traction and a strong business plan. A rule of thumb was that 1 in 200 (0.5%) deals get funded. So, even in times of plentiful venture capital, VC investments are fairly selective.
The panel felt that private equity firms which also provided capital, operated in a different space than VC firms and sometimes even provided exits for VC funded companies. Web 2.0 companies tended to be weak on technology and customer acquisition was important and difficult. Purely digital semiconductor companies were increasingly rarely funded. Analog and mixed signal semiconductor companies are being selectively funded. Biotech investments tended to be longer term due to regulatory issues. Medical device investments offered the opportunity for absolute monopoly.
On advice to entrepreneurs, the panel recommended keeping the rounds of financing to a minimum (preferably three), allowing 18 to 24 months between financings. In general, one could expect 15 to 45% dilution in each round. Company structure could be a mix with people in Silicon Valley and overseas, with the key ideas and customer relationships being driven from the valley, while execution could be based elsewhere. Some of the VC firms with investments in China and Japan were seeing liquidity of their investments.
As with the opinions of the WCA VC panel, the VC sentiment appears more upbeat than in previous years. What was startling was the comparison of US VC investments of $19B for the first three quarters of 2006 compared to $1.2B for China and $0.4B for India. Of course, the same money buys a lot more in India and China, but, the comparison highlights the advantage that Silicon Valley companies have in terms of capital access. Of course, there's always some place else in the world which says they are the new Silicon Valley. Surely, imitation is the sincerest form of flattery :-)
The annual WCA sponsored “What’s Hot, What’s not” VC panel was held at the Fairmont Hotel in San Jose in conjunction with WCAI’s 13th Annual International Symposium and Business Expo on 17th January, 2007. This year’s panel was moderated by Tim Chang of Gabriel Venture Partners and had Dale Pfau of enVia Partners, Dan Rosenthal of Mayfield, Fred Wang of Trinity and Eric Zimits of Granite Ventures as panelists. The panel gave us their view of the Silicon Valley VC scene and their thoughts on trends in wireless technology and investments. What follows is my summary of the discussion. Errors and omissions are entirely possible and readers must use their judgement in assigning any value to any predictions or assertions made here.
The effects of the tech bust of 2000 are still lingering. The amount of VC money spent in 2006 was roughly the same as about 10 years ago. However, the number of deals have gone up about 10% from last year. ( There are more concrete numbers on VC funding trends in my account of the CSPA meeting which I will talk about shortly). A significant fraction of the total VC funding in the US (over 25%) goes to Silicon Valley companies and about 1/12th of that goes to wireless investments. In 2006 the trend was to fund more consumer wireless investments as opposed to enterprise investments.
The panelists opinions on what’s hot showed some variation. Consumer applications, cellular carriers leveraging data networks, WiMAX, broadband, power saving technologies, multimode transceivers were Eric Zimits’ choices. Consumer applications, especially online applications like gaming, mobile video, mobile advertising (slow growth, but lots of potential), backhaul (slow development, but new growth) were Fred Wang’s choices. Dan Rosenthal’s picks included WiFi, including mobile and WiMAX. He suggested that carriers would make bold moves to drive ARPU (average revenue per user) growth as with Sprint/Nextel’s Mobile WiMax deployment in Chicago, Baltimore and Washington, D.C.
Dale Pfau’s comments indicated that the handset market had become commoditized with over 1 billion handsets being sold. Replacement has become more important than new customers except in markets like India and China. Opportunities in the handset market were therefore limited for startups. Infrastructure suppliers might see consolidation. New spectrum licenses and WiMax may be areas for growth. Handset suppliers were mostly from the Far East due to cost constraints. Semiconductor opportunities were few for startups. Exceptions like Portalplayer riding the coattails of the Apple iPod are a possibility. Some of the VCs saw opportunities in analog or mixed signal semiconductor startups. Dale Pfau felt that 2007 would be a great year for public semiconductor companies because expectations are low. Many companies are below the norm for public market valuations. This is driving private equity buyouts.
In the carrier infrastructure space, some of the VCs saw opportunities for growth as with the Sprint/Nextel. However, with Motorola, Samsung, Nokia, and Intel being suppliers for this deployment, opportunities for smaller players may be fewer. VCs are worried about investment for this reason [AG comment : We believe that there may still be opportunities for semiconductor suppliers like Beceem to supply some of the larger players] Though the mobile WiMax trials are going on now, full scale deployment may only happen in 2008/2009. There are some comments in the press that WiMax may be forced to take a secondary role in the larger broadband rollout. One of the VCs pointed out that it may also not be too late for WiFi with companies like Aruba filing to go public. The panel felt that the fixed/mobile convergence space was not a startup friendly space. Infrastructure, especially EDGE shows growth possibilities.
The panel was asked about VC investments in China and India. The answers varied widely. Mayfield invests in China with a local VC partner and leverages local R&D tied to top Universities in China and sees many exciting possibilities in China and India. Granite and enVia fund companies which have significant presence in other countries, but do not fund companies solely based in other countries, while Trinity focuses exclusively in the US.
Some of the contrarian investments which could be successful may be in the GPS space, infrastructure components, RFID and backhaul if mobile data applications ramp. On the question of strange deals, some of the panel believed that Web 2.0 was overhyped, valuations for WiMax deals were too high and handset component companies were risky. Funding deals like the 17th photo blogging company would also be considered strange.
The panel was positive on applications, content and services on cell phone. However, the VCs don’t always know which of the applications will succeed, so they ask for evidence of traction and this can be frustrating to the startups. Just porting the internet to mobile is stale and will not be well received by VCs. Many of the cool applications are developed and deployed in Europe and Asia first. This may have to do with cultural differences in cell phone usage. Some of the application possibilities are instant messaging on cell phones, social networks on cell phones, search, mobile media apps, HD radio, FM tuners, aggregate content on cell phones etc. One of the panelists quoted someone as saying that the 3Gs that you can charge for on a cell phone are “girls, games and gambling”.
The panel also responded to some audience questions. Arma Group posed the question on whether the Apple iPhone would be a hit and whether there would be startup opportunities deriving from it. Some of the panelists believed that the iPhone would be a hit, while others believed that it was a defensive move on the part of Apple to cover for the eventual loss of the iPod market. Battery life and other issues remain to be solved. One opportunity for startups could be iPhone like services ported to lower end phones for Rest of the World (ROW) applications. Another could be a Portalplayer like supplier of components to the iPhone.
On the prospect of success for mobile video, the panel felt it could be a success, but it may be a greater opportunity in Korea, China and other Asian countries than the US. The DVB-H demos by LG at CES 2007 were impressive. The WiFi+ cell phone is a promise yet to be delivered. Currently there are less than 2M handsets with WiFi enabled. The panel disagreed with an ABI prediction of 100M WiFi enabled phones by 2009. [AG note: Maybe the Apple iPhone will change this ?]. The panel was also negative on the prospects for profitability for MetroWiFi.
As one of the panelists commented “ VCs are often wrong, but never in doubt”. Time will tell whether the thoughts and predictions from the panel will hold true. However, as with most years, the panel was comprised of a knowledgeable VC panel and presented some interesting thoughts.
WCAI’s 13th annual Expo
Attending the WCA panel above also gave one access to the WCAI’s Expo and reception. The Expo is focused on wireless broadband suppliers. In prior years this tended to comprise of a large assortment of proprietary wireless solution providers. This year it was billed as Silicon Valley’s WiMax showcase and the Expo was dominated by WiMax system, semiconductor and service suppliers. The proprietary broadband wireless suppliers were less prominent. Of course, the only service provider to date to announce WiMax deployment is Sprint/Nextel with Clearwire. To be certain this will be watched very closely as a metric for the success of WiMax. However, it will be a while before one can judge the success of this, since the deployment is expected to go beyond the trial phase only by 2008/2009, by most accounts. The trial deployments are in Chicago and Washington, D.C. Sprint’s progress announcement for 2007 can be found here. However, not everyone supports the view that WiMax will be the primary broadband solution. The proprietary broadband wireless suppliers believe that WiMax has to cross several hurdles before mass adoption. They expect this to take some period of time, during which they expect to continue their success in the niche markets. Furthermore, they expect the broadband wireless networks to be a combination of multiple solutions. The advantages of WiMax may be most pronounced for broadband mobile solutions. From talk on the show floor, one could gather that WiMax deployment was gathering steam outside the US, with WiBro in Korea and BSNL and VSNL planning WiMax deployment in India. Could this be a case where the WiMax infrastructure growth is primarily driven from outside the US ? Here's a view that WiMax is relegated to a minority position in the 4G race.
Silicon Valley’s Smart Valley Showcase
WCA panel attendees had the benefit of access to a special program session on Friday, January 19th, 2007 on Silicon Valley’s Smart Valley Network. This is a joint public/private initiative to rapidly deploy next generation communication infrastructure and provide pervasive public access to information. The program sessions ran for half a day and covered the public service vision and business model, partners plans for execution, community case studies and a panel on community services enabled by broadband wireless access. I attended only part of the program and hence my account here may not be complete. Further info on the Smart Valley Network can be found here.
2007 seems like a good year to start a blog on Silicon Valley and technology. After all, I live in Cupertino, CA, home of Apple Computer, and, arguably, the center of the creative universe that is Silicon Valley. These are exciting times, what with Steve Jobs promising that 2007 would be the best year yet for Apple. The year started off with the Consumer Electronics Show (CES) which ran from Jan 8th till 11th in Las Vegas, NV, but was quickly upstaged by Steve Jobs and the iPhone announcement at Macworld in San Francisco which ran concurrent to CES. I made the hour plus plane ride to Vegas for CES, but may have found more excitement closer to home in San Francisco. Of course, Vegas is always fun and I met several old friends and made some new ones, but it made it clear to me that there was much to write about in Silicon Valley.
So, I decided to start this blog on Silicon Valley, technology, people and places. I have lived here since 1994, seen one tech boom and a bust, a few small earthquakes and met some of the most interesting people anywhere in the world. Living at the leading edge of technology is very exciting to me and so I thought I would share these exciting times with others.
I won't write much about CES or Macworld, for they have been amply covered elsewhere. However, I attended two very interesting events this week which I will write about. The first was the Wireless Communication Alliance's (WCA) "What's Hot, What's not" VC panel held in conjunction with the WCA International's 13th annual symposium and expo at the Fairmont Hotel in downtown San Jose. This very interesting annual panel sheds some light on what some of the VC community in Silicon Valley view as the opportunities (or not) in the near future for various wireless technologies such as WiMAX, 3G, handset technology, infrastructure, Metro WiFi.
The second was the CSPA's "VC Outlook 2007: Looking Down the Money Trail" held at the Wilson Sonsini Goodrich & Rosati offices in Palo Alto, CA. CSPA stands for the Chinese Software Professionals Association, a nonprofit organization, which very generously tolerates people like me who are neither Chinese or software professionals at their meetings. This is a panel of a different set of VCs with a focus on a broader portfolio such as biotech, software, search, Web 2.0, semiconductors, alternative energy among others. I will give you my observations on both of these events in a couple of days, once I have had the time to collect my thoughts and notes together.
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© 2007, 2008 Madan Venugopal All rights reserved.
