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Sorry – I just could not help myself when crafting that title. I wonder if it’ll get good SEO juice. And yes – it was a really sunny day today in Boulder.
By now everyone in the tech universe knows that Oracle has signed an agreement to acquire Sun. I – for one – did not see that coming. There has already been plenty of analysis on the good and the bad of it from a tech industry perspective. However, I haven’t seen much commentary on what it means for the Colorado tech community.
If you live outside Colorado, your first reaction is probably “who cares.” However, did you know that both companies have their second largest US operations in Colorado? Nope, that hadn’t occurred to me either until I met with senior execs at both companies two weeks ago with Colorado Governor Bill Ritter. Think about it – two native Silicon Valley companies have their largest US operation in Colorado.
During my two day trip to Silicon Valley with Governor Ritter, Don Elliman (head of the Colorado office of economic development), and Mike Locatis (Colorado CIO), we had about a dozen meetings. The Sun and Oracle meetings were uniquely interesting because of the large presence each company has in Colorado. Sun’s comes from a combination of organic growth and their acquisition of StorageTek; Oracle’s comes from organic growth and their acquisitions of PeopleSoft (which had previously acquired JD Edwards), BEA (which had a good sized operation in Boulder that resulted from two other acquisitions), and Hyperion (which had previously acquired Decisioneering). I don’t have the exact number of total employees of both companies in Colorado but I’m guessing it’s around 10,000 with a heavy concentration of them near Boulder, Denver, and Colorado Springs.
In both the Oracle and Sun meetings, the executives that we met with were extremely enthusiastic about their teams in Colorado. Even if you discount their enthusiasm based on the fact they were talking to the governor of Colorado, it was sincere and substantiated by their perspectives on the capability, quality, and loyalty of their Colorado-based workforces. It was clear that regardless of future acquisition activity, both companies had plans to continue to grow their bases in Colorado.
Now, acquisitions are always complex and this one isn’t expected to close until sometime this summer. However, given the existing presence of both companies in Colorado, I expect there will be additional focus on the appropriate integration dynamics. While they will likely include some rationalization of people and facilities, I expect it will be healthy for the long term growth of Colorado as a technology center, especially given the positive experiences each company has had with large workforces in Colorado.
One of the neat things about business is that it runs in cycles. I’ve been involved in the software business since 1985 when I started my first company. Since then, I’ve seen numerous cycles with a wide range of amplitudes. I don’t try to time any of the cycles, the peaks, or the troughs; rather I just invest and work hard all the way through each of the cycles.
Given the negative sentiment across many parts of the business universe (e.g. the NY Times headline this morning Jobless Rate Hits 8.5%; 663,000 Jobs Lost), I’ve been pleasantly surprised by the Q1 performance of many of the companies I’m an investor in. Several had record quarters, most made or beat their Q1 plan (obviously the easiest plan of the year to make since it’s usually baked near the beginning of the quarter), and a couple had extraordinary growth that surprised everyone. Some struggled, but when I look at the overall distribution of behavior across our entire portfolio, it was kind of what you’d expect from a typical economic environment versus one that is either distressed or bubbly.
This morning during my daily information consumption routine, I noticed four things that stuck out.
- RIM announces strong earnings.
- Changyou has a strong IPO.
- IBM is rumored to have reached a deal to acquire Sun.
- Google is rumored to be in discussions to acquire Twitter (or not).
All of these are nice leading indicators that the exit environment for tech companies, which has been frozen for the past few quarters, is starting to thaw out. It’ll be interesting to see if this is just a warm day mid-winter or actually the beginning of spring.
As co-chairman of the Colorado Governor’s Innovation Council, I’ve been regularly exposed to the acronym ICT. It’s not a familiar or comfortably one to me and I chronically call it “CIT” or expand it incorrectly.
I am looking for a phrase that covers IT + Communications + Software + Internet. These are the four components of ICT that drive a huge chunk of business activity and innovation in Colorado. In my world as a VC, I call this software + Internet, but that doesn’t cover the full landscape.
My friends at Silicon Flatirons have put together a Wiki titled Innovation in Colorado and Information and Communications Technology (ICT) where we are compiling the history of the ICT ecosystem in Colorado. If you have participated in this in any way, feel free to jump on and add your thoughts and facts.
What’s your favorite phrase or acronym for this?
If you’d like to do something political that has nothing to do with the upcoming elections, read through Tom Evslin’s post Act Now for Better Internet Access. Then go sign the online petition at freetheairwaves.com.
It kind of blows my mind that the National Association of Broadcasters is still fighting this stuff, especially with the impending federally mandated cutover to digital TV in February. But hey, lots of things seem illogical – this is nothing new.
Thanks Tom for alerting everyone to this. The deadline for comments is Tuesday 10/28 so click and comment now.
Fred Wilson gave a phenomenal speech at Web 2.0 Expo NY titled New York’s Web Industry From 1995 to 2008: From Nascent to Ascendent. It’s about 25 minutes long – worth watching from beginning to end. It’s a fantastic history lesson that details the rise, fall, and re-emergence of the Web industry in New York.
As part of this, Fred makes a plea to "bury the name Silicon Alley." He hates it in the same way I’ve always hated the names "Silicon Flatirons" and "Silicon (whatever)" to describe the tech communities in other geographies than Silicon Valley. Fred appropriately suggests that we should call "New York" simply "New York" – which I completely agree with.