Sunday, August 24, 2008

Big Tech Companies in New England: An Impossible Dream?

Last Sunday's column focuses (again) on New England's penchant for selling start-ups short rather than building what I call "pillar companies."

From the column:

    Maybe I'm a glass-half-empty sort. Maybe I refuse to acknowledge the reality of the financial markets, and the need for entrepreneurs to deliver a return for their investors within a reasonable time.

    But I can't help feeling that, whenever a New England company is sold to an out-of-state acquirer for big bucks, we've missed another chance to build a "pillar" company of our own.

    When Dell Inc. pays $1.4 billion in cash for New Hampshire's EqualLogic Inc. this year after the storage start-up had filed to go public, it feels as if we've missed the opportunity to cultivate another EMC Corp. in our backyard. When VeriSign Inc. buys m-Qube Inc., one of the pioneers of content delivery to cellphones, for $250 million, that's a potentially significant anchor tenant we've lost for the mobile software com munity here. When Microsoft Corp. buys Softricity Inc., that's a pioneer in application virtualization - delivering software over a network connection - no longer seen as a leading player in the field, and headquartered right here in Boston to boot.

The column includes a chart of some recent acquisitions by out-of-state buyers, and also a video from the recent Y Combinator "Demo Day," where fledgling start-ups show their stuff.

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Monday, November 5, 2007

Did EMC Drop Out of the Bidding for EqualLogic?

Dell is paying $1.4 billion in cash for Nashua, NH-based EqualLogic. Company is run by Lotus alum Don Bulens, and backed by Charles River Ventures, Sigma Partners, Focus Ventures, and TD Capital. This is a big exit for all involved, since only about $52 million had been invested in EqualLogic. (Earlier this year, Bulens had touted the company as an IPO prospect.)

I had lunch today with a storage industry entrepreneur who suggested that EMC had likely been in the bidding, but dropped out before the price reached $1.4 billion. He also speculated that this could mean the end of EMC's partnership with Dell; Dell's reseller arrangement with EMC accounts for about 16 percent of EMC's storage revenue. The official word from EMC is that there will be no changes to the Dell partnerhship.

Goldman Sachs just downgraded EMC from a "Buy" to "Neutral."

EMC chief executive Joe Tucci gave this interview in October in which he vowed to catch up to the competition by early 2008. Which is coming soon.

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