Goldman Sachs recently published a report that addresses VC trends, which I thought worth posting about. Most notable was the shift away from investing in enterprise-oriented technologies, which include storage, servers enterprise software, etc.
So where DID the money go?
- Web-based business models such as SaaS and Web 2.0, focusing on consumers and small and medium business
- Wireless connectivity and next generation services, which include mobile navigation, TV, advertising, etc.
- Video-related investments, with technologies covering Video IC’s to enterprise video conferencing.
I have blogged about the “death” of enterprise software in the past (and haven’t been the only person to do so…). It’s a maturing industry, which has made it more difficult to innovate. That doesn’t mean that opportunities do not exist. It just means that there are fewer of them.
Interestingly enough, the report also mentioned that security software was one of the least invested areas within the software sector. However, if you talk with CIO’s, you still get a very clear message that security software very much interests them… For me, this means opportunity (although it’s not great news that there hasn’t been a security IPO since Netscreen back in 2001).
It’s well known that VC’s have a “herdish” mentality. To be great means identify the trends before they are trends, rather than follow them. I suppose this message is to those entrepreneurs out there. As long as you innovate (I mean REALLY innovate), you will find those that are daring enough to invest away from the herd. All you have to do is find them 
.
I believe SourceFire did a security IPO in 2007.
While there are not many others, there seem to be quite a lot of mature companies with good potential for IPO.
Fortinet and Crossbeam are two that come to mind.
Posted by: Ophir Kra-Oz | February 21, 2008 at 09:34 AM
I stand corrected. Thanks Ophir.
Posted by: Tali Aben | February 21, 2008 at 09:47 PM