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A
bi-weekly column with timely,
relevant and possibly irreverent
insight into the BC technology
industry.
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Something Ventured: May 19th, 2006
By
Brent Holliday
Greenstone Venture Partners
There Be Dragons
“I still don't know what I was waiting for And my time was running
wild A million dead-end streets Every time I thought I'd got it made It seemed the taste was not so sweet” – David Bowie, Changes
Is it just me, or is 2006 turning
out to be a year of enormous change? It’s not
necessarily that a lot of new things are happening… it
just seems to me that a lot of things that have been
predicted or slowly ramping up have now started to
happen in earnest. Look around:
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The two and a half year bull run of the stock
markets seems to be ending as inflation has entered
the realm of the real and not of the possible. The
various central banks must now slow the economies with
higher rates. Your home is worth as much in Vancouver
as it will be for the next few years. This is the top
of the roller coaster ride for now, enjoy the dip!
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That movement in the earth you felt Monday
morning was the announcement that Skype was making all
Skype Out calls in North America free. Zero. All the
predictions and talk of the end of the local and long
distance phone company… well, let’s just say it isn’t
arm-waving hysteria. It’s really happening. Now what
if municipal Wi-Fi really starts to roll out, bringing
broadband to the masses… What exactly does a telephone
company sell anymore? Wireless? TV? If the government
becomes an ISP, effectively making the Internet a
utility, like gas or electricity, then what does Telus
do?
-
The stalwart tech companies of the 1990s are now
shining examples of companies gone wrong: Dell,
Oracle, Microsoft, Intel and Cisco. The new darlings
of the tech world are Google, HP, SAP, AMD and Apple.
In the blink of an eye, it seems, some of the best
managed companies became losers. Is it because of
incompetence or is it because the markets have shifted
and the old guard have not yet adapted…
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For twenty years, companies and lucky sales
people made lots of money selling client-server
enterprise software. Big money, big implementation,
big support and big commissions. But growing since
Linux arrived in the late 90’s and now hitting prime
time with robust web applications and software as a
service we have… free software. Hard to get a
commission on that. Open licenses and open source are
flipping business models for software on its ear. SGI
is dead (partly) because of Linux and Sun is looking
around for revenue where Unix used to be and where
Java must be free. Oracle is buying others to
grow revenue because its core database market is
eroding fast under the weight of
mySQL and jBoss. Software is a changin’
and some will win under the new model of applications
as services and others will cling to old models and
suffer.
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Web 2.0 and AJAX are happening now and the
Internet never looked so good. The community models,
prevalence of blogging and existence of an ad-based
revenue model appear to make this evolution of the Net
a little more substantive than the dotcom era. But on
the flip side, hysteria is driving some bubble talk
that sounds a lot like 1999. According to those
attending the inaugural Mesh conference last week in
Toronto, the CEO of Rocketboom, with about 100,000
visits a day to the video blog site, says that he
thinks the company is worth $500M or more today… in
other words, more than Myspace.com. Just one of many
deluded figures out there.
-
Huge changes are afoot in the video/TV world.
YouTube has become a phenomenon and Google Video is
not far behind. The saturation of Flash Player and
its new capabilities to embed and play video from any
enabled browser have spawned a thousand ways to
distribute your own video or someone else’s. This
should be the last summer of people clogging your
e-mail with attached video segments and will instead
point you to URLs to see it streamed. TV syndication
of content appears to be headed for downloads instead
of 4:30pm on weekdays. Making your own content has
never been easier or faster to distribute. The
advertisers that supported 60 years of television are
now thinking more about a new medium…
Like I said, these are not
prognostications. These are real changes happening
today. And I am sure there are more to come this year.
Many BC companies appear to be in the right place as the
changes I have described here are playing out. For
instance, on the just mentioned video distribution
changes, Pixpo just got funded and is already a
community from its How2Share days. Pixpo and about 50
other companies are out there, but the profound change
is happening today and there is lots of room for
companies to maneuver and make money. From the change
in voice services I described through the Skype
announcement, Eqo Communications has Skype over mobile
services launched to the market. In the
community/Web2.0 world, AirG is defining a whole mobile
social networking space worldwide and appears to be
doing extremely well at it. Many local software
companies have figured out how to deliver web based
applications to the enterprise after years of getting
over the hurdles of reliability, location of company
data, security and changing the whole notion of paying
too much money up front for software.
Sadly, there are BC companies, as
there are everywhere, that are not ready for these
changes and may get bitten.
These are interesting days, non?
Depending on who you are and what you do for a living,
this could be scary or exciting. Or both. Here’s an
appropriate quote for the times that I came across from
someone named King Whitney Jr.: “Change
has a considerable psychological impact on the human
mind. To the fearful it is threatening because it means
that things may get worse. To the hopeful it is
encouraging because things may get better. To the
confident it is inspiring because the challenge exists
to make things better.”
What Do You Think? Talk Back To Brent Holliday
Something Ventured is a bi-weekly column designed
to supplement the T-Net British Columbia web site with
some timely, relevant and possibly irreverent insight
into the industry. I hope to share some of the
perspective and trends that I see in my role as a VC.
The column is always followed by feedback (if its
positive or constructive. I'll keep the flames to
myself, thanks).
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