Searching for Venture Opportunities

By eweek  |  Posted 2006-01-05 Print this article Print

It was almost a marriage made in heaven, because YeePay was seeking a partner who could provide infrastructure that would link those various entities together. IBM was seeking a new business model to help us enter new markets and extend our reach.
So YeePay is a poster child for the kind of opportunities IBM generally looks for in these emerging areas.
Together we go to the market. Naturally, both entities win, because YeePay is getting into doors that werent open to them without the relationship. Obviously, IBM and its branded strength can open a lot of doors in large enterprises and institutions that a small startup couldnt get into. And that is just one example. I could give you many more examples. Its something that everyone can identify with. We could be looking at the PayPal of China here. This is a profoundly important solution that developed there. It is really impacting the way Chinese consumers will enjoy and pay for their content. So this is significant and important. How much are you [partnering] domestically in the United Sates as compared to globally? In terms of our strategy and approach, lets say, we are here in Menlo Park, Calif. In our back yard is Silicon Valley, and the Sand Hill Road investors. Of the $23-$24 billion total [venture] investment, a large part of that is here. So, naturally, a lot of our focus is here in California. But increasingly the local VCs here—look at Accel [Partners], Mayfield, BMJ and others, all household names—are looking to Asia to complement the investments that they are making locally. And I think IBM certainly understands the opportunity to do the same. So our reach is global and it really is looking to where innovation starts. And if there are innovative people like YeePay in Beijing doing great things … or any number of other startups in India, or the Philippines or Vietnam—wherever they are—thats where we are going to be. So increasingly, I would say, we are looking to these emerging markets for innovation to satisfy the hunger our customers have for innovative solutions to their problems. So we are by no means limited to just looking in our back yard. In fact I think that you will find that increasingly more of the—certainly a higher growth rate—but a still relatively small chunk of the venture pie is being invested in places like Asia. Increasingly, you will see IBM seeking partnerships and relationships with young companies in these regions. Are there particular hot technologies that you think will be important for IBM going forward? Customers are still—even years into the bubble—still concerned with issues around security. Theyre still looking for solutions involving issues like data security, privacy. Risk and compliance is an especially important topic on customers minds: the ability to be able to account for the security and privacy [of] data as embedded in media like e-mail. So when an auditor or government official inquires as to the security of customer data … they can easily turn to a system that shows them it is protected and secure. Other areas that are interesting [include] the whole open-source open standards area. One of the challenges that a startup from Asia faces, for example, is [the question of whether] they have got a solution that is compelling enough to really be appealing to the United States, North America or Europe. They have got to craft that solution using open standards because it is the only way that their technology is going to plug in and interoperate with systems in those disparate places. Next Page: Identifying hot technologies.


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