Returning to NGN
I don't usually give much thought to venture capitalists. Not that they aren't important. They just don't seem to be important to me. Most of the time I avoid the VC sessions at NGN. McQuillan's closing remarks at NGN gave me reason to reconsider. At least reason to think about the role of VCs and how they are a good indicator of what is happening in the IT industry.
McQuillan made the following points:
no matter what the VCs say, the model is broken.
VC funding for Q3 2003 was $4 Billion, the lowest since 1997 and 15% of peak.
VC overhang is 84%, creating a five year bubble.
667 deals were done in Q3, 7 in telecom, 6 in networking. 2% of all new deals are in technology areas.
VCs aren't investing in wireless. The area of interest is in software start-ups.
Passmore added that any technology start-up will likely be capped at $10 - $15 million. Most new deals will target enterprise. The day of the big service provider deals is gone and likely won't return for a very long time, if ever.
What does all of this mean? Who knows.
The speculation at NGN was that any new R & D in technology will probably come from large vendors. Is it scary to think that Cisco, Microsoft, et. al. are going to be the movers and shakers for advancing technology? Perhaps that is a good thing.
McQuillan's last point in this area was encouraging. He feels that the development cycle bounces between large vendors and start-ups. Right now it's just the large vendors' turn. Perhaps it will be prudent for me to pay more attention to the activities of venture capitalists. I might just learn something..........
9:48:03 PM 
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