Enterprise users who want to get an early jump on emerging technologies should keep an eye on consumer trends. While corporate needs are widely acknowledged to drive computer technology innovation to a large degree, consumer demand is sometimes underemphasised.
“The consumer pull has been there for decades and the surprise is always on the upside,” said Mike Goguen, a partner at Sequoia Capital LLP.
The effect that consumer demand has on IT is intensifying as technologies like mobile communications have a widening impact on society, said David Skok, a general partner at Matrix Partners.
IDG Ventures – an affiliate of International Data Group, the parent company of IDG News Service – typically looks at companies developing ‘enabling technologies’ for areas including homeland security, health care technology and devices and the digital home, according to David Aronoff, a general partner at the firm. But the company keeps its eye out for a wide variety of interesting ideas.
A company does not have to be the first in a new technology area to be successful, as long as it is pushing the envelope on what's already on the market, noted Sequoia’s Goguen. For example, Sequoia has backed Ruckus Wireless, a wireless equipment supplier focusing on home networking. Ruckus says it offered the world’s first in-home wireless multimedia system, MediaFlex.
In the wireless market, though, the many different technologies being developed and promoted is causing confusion. Whether it’s smart to place bets on WiMax, for example, is a hot topic.
“Companies have spent a fortune preparing networks for 3G (third generation),” noted IDG’s Aronoff. This makes it difficult for some carriers to now invest heavily in WiMax, he said.
Nevertheless, WiMax is a cost effective way to offer wireless broadband and the approval of the 802.16e mobile WiMax standard is generating more interest for the technology, the venture capitalists noted. Sequoia’s Goguen, for example sees a future in mobile WiMax, and the firm has invested in Navini Networks, which has patented ‘smart beamforming’ WiMax technology.
Linux, meanwhile, is generating interest as a low-cost development alternative for consumer devices. TiVo television-show recording service, developed around Linux, proved that a robust consumer service could be built on Linux, noted Matrix Partner’s Skok.
Matrix has jumped on the open-source bandwagon, putting money into Digium, which developed the Linux-based Asterisk, an open-source PBX.