Industry watcher: Network infrastructure market overdue for venture capital infusion
Network World - Venture capitalists have pumped oodles of money in recent years into startups that exploit telecom networks and wireless infrastructure, but now it might be time for infrastructure startups themselves to start attracting more funding, according to industry watcher Ovum.
Ovum reports that VC funding of telecom infrastructure startups has fallen from $796 million in 2009 to about a third of that over the period of Q3 2011-Q2 2012, while money has poured into mobile, social and over-the-top (of wireless network) startups and overall venture funding has increased as well. Citing data from the recent PWC/NVCA MoneyTree Report, Ovum points out that the networking and equipment share of total VC investments shrank to just 1% for the past four quarters (Q3 2011-Q2 2012), down from about 10% in 2003.
ADVICE: 5 tips for locking in VC funding
STARTUPS: 12 hot cloud computing startups to watch
But Ovum Principal Analyst Matt Walker says carriers and enterprises need to keep bolstering their networks to support all the new software and services, and without an infusion of fresh infrastructure companies, they will become beholden to a dwindling number of powerful players (the Ciscos and Huaweis of the world). Recent IPO activity (Nimble Storage, for example) and M&A transactions in the infrastructure market, including VMware's $1.26 billion buyout of software-defined networking player Nicira, could be indicators that investments in such infrastructure companies can pay off for VCs.
"With a weak start-up pipeline, the [telecom] industry relies more on incumbent vendors to generate new ideas and products. Their budgets are bigger, but VCs are often better at funding 'game changing' ideas ignored by established vendors," Walker says in a statement. "Incumbent vendors' internal R&D budgets are now nearly 90 times larger than VC investments in the sector, up from 30 times two years ago. This narrows options for service providers, who rely on both large and small vendors for innovation. The big vendors also need access to the start-up pipeline, to fill in gaps in their own portfolios through partnership and M&A."
Ovum notes that service providers themselves are getting more active in seeding startups, citing Deutsche Telekom's move earlier this month to revamp its T-Venture unit.
Read more about data center in Network World's Data Center section.
Crafty hackers hack craft stores -- again.
Michaels Stores (NYSE:MIK) has finally confirmed the details of the point-of-sale hack revealed in January. It's unclear what's taken them so long -- the company claims the hack was "highly sophisticated," but everyone uses a blah-blah phrase like that.
Your humble blogwatcher notes that the problem persisted for more than a month after the news first broke. smh.
In IT Blogwatch, bloggers are aghast that, for the second time, the company's POS was hacked -- lasting almost nine months.
- IT Certification Study Tips
- Register for this Computerworld Insider Study Tip guide and gain access to hundreds of premium content articles, cheat sheets, product reviews and more.
- The Big Data Opportunity for HR and Finance
- If CEOs, CFOs, CIOs, and CHROs want to drive their businesses forward, they will need to quickly recognize the enormous value of big...
- Manufacturing Outlook: Improving time to market, operational effectiveness and innovation in a highly competitive environment
- An enterprise project portfolio management solution can help manufacturers position themselves in the new competitive landscape.
- Time-to-Market: The Need for Speed in the Automotive Industry
- Bringing new vehicles to market quickly has never been more challenging. To bring new models to market on-time and on budget, automakers need...
- Application Rationalization Scorecard: Analysis to Action
- This paper details a proven method, used most recently to evaluate a financial services application portfolio. At the method's core is the scorecard....
- Changing the Way Government Works: Four Technology Trends that Drive Down Costs and Increase Productivity
- This paper discusses four technology-based approaches to improving processes and increasing
productivity while driving down department and agency costs.
All Financial IT White Papers
- LIVE EVENT: 5/7, The End of Data Protection As We Know It. Introducing a Next Generation Data Protection Architecture. Traditional backup is going away, but where does this leave end-users?
- On-demand webinar: "Mobility Mayhem: Balancing BYOD with Enterprise Security" Check out this on-demand webinar to hear Sophos senior security expert John Shier deep dive into how BYOD impacts your enterprise security strategy...
- Mobile Security: Containerizing Enterprise Data In this on-demand webinar, Fixmo's Lee Cocking, VP of corporate strategy, explains why Apple-ization trends like mobility and "bring-your-own-device" (BYOD) are driving the...
- Endpoint Data Management: Protecting the Perimeter of the Internet of Things Not surprisingly, "Internet of Things" (IoT) and Big Data present new challenges AND opportunities for enterprise IT. Teams need to harness, secure and...
- How to Protect Enterprise Data Yet Enable Secure Access for End Users Learn how BYOD, Big Data and the use of rogue applications and devices is putting corporate data at risk, best practices from IT...
- All Financial IT Webcasts