A VC Talks About Tech in the Age of Gloom: Page 2

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The scores of companies springing up to cater to the various needs of cloud customers are like prospectors rushing to break ground in the 1849 gold rush. Now is the time to lay your stake – especially since cloud computing offers cost savings in an era when budgets are squeezed.

“[Cloud vendor] Amazon EC2 is growing very quickly and there are more and more ‘clouds’ coming out there,” Sim says. “And I’m seeing more companies providing infrastructure services and management layers to help you deploy on multiple clouds, to help you meter [usage] up and down. And I’m seeing open source cloud-type plays.”

A sweet spot of growth is the security of cloud computing, given that remote computing creates a buzzing locust plague of security nightmares. But the possibilities for new investment in cloud computing reach from wireless to enhancing data flow. “From the infrastructure layer all the way up to the app layer, it will be very interesting during the next five years,” Sim says.

The fact that the cloud leverages the Internet presents an irony of venture investing, circa 2008. In the mid ‘90s, investors opened their wallets for Web ventures because they knew the Internet was the Next Big Thing. But, Sim says, even years later the Internet is still the Next Big Thing.

The Web, though it has affected everything from dating to sports to shopping, has only just begun. “I still think we’re just in the second or third inning right now,” Sim says.

“We know that whether it’s media consumption, content consumption or even enterprise application, that we’re going to be more and more connected. Speeds on wireless devices will get faster, networks will get faster. Devices will get better. They’ll be more and more to do out there.”

Human activity on the Web creates an explosion of consumer data – every nugget of which is worth something to someone. “Data is everywhere,” Sim says. “Every time you turn on your computer, every click you make, everything you do is a piece of data that’s logged somewhere.”

There’s profit in figuring out “How you take that data and turn it into real information, and use it to sell subscription services, target better from a profiling perspective, etc. So I think the data-driven Web is going to be another opportunity.”

His enthusiasm for the Web, however, doesn’t mean he’ll be funding such Web-centric ventures like Facebook-style sites. We don’t need another Facebook, he points out.

“I think the point is that social networking is weaved into the very existence of all the things we do. You see apps getting weaved into your email. People are getting more and more connected out there, and used to that, because of Facebook.”

This saturation will result in consumer behavior being adapted in large businesses. The potential marriage of social networking and the enterprise has piqued investor interest. “How do you take this social networking and information sharing stuff – the clip and blog and share – is there any opportunity to benefit the enterprise? On a content layer? So I’ve looked at some companies along that space-spectrum as well.”

A conversation with Sim is enough to make even a curmudgeon believe the cliché about every dark day being followed by slivers of sunshine. Certainly he himself plans on looking for pots of gold at the end of the (rainy day-induced) rainbow.

“Some of the best opportunities were created during tough times,” he says. He recounts talking with a friend the other day and getting a doubting look after expressing optimism.

“I said, ‘Hey look, if you’re a product guy, it’s a great time to bang away and refine your product over the next 12 months. And be ready 12-18 months from now with a great product.’ Just keep the burn low, focus on the product, get great feedback. And 12 months from now you can start emerging if the economy picks back up.”

“It’s definitely scary and ugly out there, but if you have a smart approach and you believe in what you’re doing, then you can still plow ahead.”

James Maguire is the managing editor of Datamation.

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Tags: open source, cloud computing, software, SAP, advertising

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