Happy New Year

As we begin the second decade of the second millennium, the ray of positive hope in the tech sector is starting to shine brighter. The stock market has seen a decent rise in the tech stocks during 2010. Just see Apple, Oracle, Cisco, Google, and several others.

The most interesting barometer of success at private internet companies like Twitter, Zynga, and of course Facebook, is the valuation and recent inflow of investments. Twitter had an infusion of $200m, mostly from Kleiner Perkins ($150m) just before the year-end at a hefty valuation ($10B?). Then we heard that Goldman Sachs and the Russian investment house Sky Digital just put in $500m in Facebook at an unheard of valuation of $50B. Goldman Sachs wants to offer its most-valued clients to invest in Facebook (at a minimum of $2m a piece), with the hope that when it goes for IPO (most likely in 2012), the investment will sky-rocket, much like what happened to Google back in 2005. Goldman Sachs wants to raise $1.5B from this investment. The current valuation of Facebook makes Mark Zuckerberg worth $14B, at the ripe age of 26. Incredible, isn’t it?

Where does that leave a company like Microsoft of yester-years? It’s stock has not moved in years and there does not seem to be any exciting new stuff coming. They have missed the Tablet market (specially after the high velocity success of the iPad), and they have no presence in the mobile market, the two big winners being iPhone and Android. Their revenue still depends on the Windows and Office products, with Sharepoint doing well for enterprise. Ray Ozzie, the chief technologist is gone. So all his attempts on cloud computing will be left with no leader pushing it at the top. Apparently investors don’t see high value in the future, given the poor movement of their stock price.

Oracle, on the other hand, seems to march forward with better results giving their stock a good run in 2010. They won a court battle against SAP getting a compensation of $1.3B plus  interest. That would be a nice add-on to revenue. They are into full “cloud-in-a-box” game with Exalogic Server line. Mark Hurd is leading the charge of bringing hardware-software blend into market success.

So this decade will be interesting to watch. Exactly ten years back, the landscape was quite different. New successes like Netscape and  AOL have gone or become irrelevant. Sun, the rising star in the dot.com exuberance is also gone. Yahoo the big leader then,  is stumbling along and there is a rumor of replacing Carol Bartz. Many dot.com era companies have become history. As they say, the tech landscape goes through a metamorphosis every ten years. Back in 2000, there was no Facebook, YouTube, Twitter, Zynga, or Groupon. I am sure we will see many changes ten years from now. But we have a good start in 2011 with much excitement happening in the software tech sector. Innovation is back and there is no lack of investment dollars. So no complains.

Happy new year!



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