Job Mobility Declines Even For CEOs

May 13, 2009

The soft economy has made changing jobs more difficult, which explains the slowing pace with which Americans are moving about the country chasing new financial opportunities.

This is true for CEOs, too.

CEOs are staying put, says a study from Challlenger, Gray & Christmas

CEOs are staying put, says a study from Challlenger, Gray & Christmas

According to a study from Challenger, Gray & Christmas, CEOs are leaving their positions at the slowest pace since 2004.

In April, only 78 jumped ship, a number that is down by almost a third from a year ago. So far, only 387 exited this year, compared with 483 in the same period last year.

Even activity in the volatile technology and health-care sectors is muted. The sectors led the country, but still had just 14 departures each.

The decline in mobility reflects a reduced appetite for risk taking. Obviously, a turn in the economy could quickly reverse this as executives search out more attractive opportunities.

But don’t count on it too soon.


Dowturn Stokes Fires For Desktop Video Conferencing But Telepresences Seems To Suffer

April 27, 2009

Companies are cutting costs and trying to be more efficient.

So it is logical they would forgo air travel in favor of conducting meetings on the phone, or by video conferencing.

Budgets are not there for expensive systems, says Stephen Epstein, pictured in conference

Budgets are not there for expensive systems, says Stephen Epstein, pictured in conference

Video conferencing was attracting the attention of executives even before the downturn tightened its grip on corporate budgets. Managers realized they could do more while flying less and at the same time generate a fraction of the greenhouse gases.

Now the sour economy is accelerating the demand for low-cost desktop systems even as it appears to be slamming the brakes on purchases of high-end video conferencing systems, such as Cisco Systems’ large screen Telepresence.

Corporate “pockets are very tight and sales cycles are longer,” says Stephen Epstein, chief marketing officer at Avistar Communications, a maker of desktop video-conferencing software for companies. But “we are getting more business.”

In the first quarter, revenue was up 128 percent.

Budgets are simply not there for big systems from suppliers such as Polycom and Tandberg, says Epstein. But companies such as LifeSize Conferencing and Avistar are seeing pickups.

And that may continue. “I don’t think budget will loosen up for the next year for high-end systems,” says Epstein.


Cellular Handset Market Survives The First Quarter In Relatively Good Shape

April 24, 2009

The predictions were dire, and the actual results were nothing to shout about.

But the cellular handset market weathered the first quarter reasonably well given the depth of the global downturn.

Research in Motions Blackberry Bold had a good first quarter

Research in Motion's Blackberry Bold had a good first quarter

According to ABI Research, 258 million phones were shipped during the three-month period. That is down 11 percent compared with last year. But it is ahead of expectations for 253.5 million handsets.

The research firm now thinks handset sales will fall 8 percent his year, compared with its previous projection of a 8.4 percent decline.

The second quarter, similarly, should show improvement over the first, though it will still be down 10 percent from a year earlier.

Samsung and LG did well during the first quarter, as did RIM with its Blackberry Bold, said Practice Director Kevin Burden.


How RSA Security Defies Recession

April 23, 2009
RSA Security President, Art Coviello, explains the secret behind the companys success despite the economic downturn

RSA Security President, Art Coviello, explains the secret behind the company's success despite the economic downturn

Despite the current financial services meltdown, RSA Security managed to increase both overall revenue and its market share within the finance category.

“In a record [fourth] quarter with the financial services industry down, we had the higer percentage than ever in financial services,” explained RSA President, Art Coviello, in a fireside chat late yesterday with other RSA and VMware executives.

So is computer security recession-proof?

When asked, Coviello came up with 2 reasons:

  1. Return on investments, as RSA products help finance institutions reduce the amount of fraud, giving them an immediate ROI;
  2. And cost effectiveness.

“The security vendors that will be successful during this financial crisis will be the ones that can offer both cost efficiency with their solution and some level of ROI through fraud reduction,” adds Coviello.

Here’s a short video excerpt of my conversation with RSA President, Art Coviello:


Security Startups Keep Innovating Despite The Downturn

April 21, 2009

Security remains an escalating problem on the Internet.

John Whaley wants to bring better security to virtualization

John Whaley wants to bring better security to virtualization

Large multinational companies continue to see millions of malicious probes a day. Botnets link thousands of computers in nefarious networks. Even new computer users in emerging countries are now under increasing attack – and less aware of how to defend themselves.

Such an environment creates opportunities for startups searching for new ways to protect computers, cell phones and the networks that link them. Despite the sour economy, many continue developing innovative products and services. Several showed off their wares on the first day of the RSA Conference in San Francisco.

Among them was Mokafive, a company that got its start at Stanford University. John Whaley, founder and CTO, said its virtualization-management software closes a security hole in virtualization products, such as those from VMware.

The software renders computer infections ineffective by installing fresh, uncontaminated operating environments on a computer or mobile device every time it reboots. Worms and other infections are erased in the process.

SafeMashups is targeting the business market, says Ravi Ganesan

SafeMashups is targeting the business market, says Ravi Ganesan

But Mokafive hardly had the innovation crown to itself. SafeMashups hopes to make it easier for businesses to take advantage of Internet mashups that link their sites to others.

Businesses are eager to expand marketing and sales efforts, but fear they can never be sure whether a site they link to it’s the real thing or an impostor. “They have no standard, secure way of knowing who is on the other end,” says Ravi Ganesan, founder and CEO. “You see this problem again and again.”

SafeMashups authenticates the connections.

White Cyber Knight tackles an even more complicated problem – monitoring corporate governance and compliance policies. The Israeli-based company can block an unauthorized database query or observe that the risks of a policy violation are greatest in a company’s supply chain.

The system monitors business processes, says CEO and founder Eyal Adar.


Venture Investing Collapses In The First Quarter

April 18, 2009

The plummeting economy put a hold on venture activity in the first quarter, a pair of studies show.

U.S. venture capitalists invested only $3.9 billion during the period, down 50 percent from a year ago, according to one of the studies from Dow Jones VentureSource. It was the lowest quarterly total in a decade – from before the burst of the dot-com bubble.

Decline in venture activity accelerates. Source: Dow Jones VentureSource

Decline in venture activity accelerates. Source: Dow Jones VentureSource

A similar study from the National Venture Capital Association, PricewaterhouseCoopers and Thomson Reuters found that only 549 deals were signed, a plunge of 37 percent. Every major industry sector saw double-digit declines in activity, the firms said.

The surveys confirm what venture capitalists have been saying for months, that they industry has essentially ground to halt.

“Venture capitalists have slowed their investment pace in order to work with existing companies that are not able to exit the venture portfolio due to the shuttered IPO window and the weakening acquisitions market,” said Mark Heesen, president of the NVCA. “While this drop in investment is significant, we are not forecasting levels to continue to fall further. We would expect a mild and steady increase in investment throughout the rest of the year.”

No industry was immune to the fall off. Investments were down 42 percent software startups, 46 percent, in biotechnology companies and 31 percent in Internet businesses.

Even trendy clean-tech saw a plunge. Investments of $154 million put into 33 deals fell 84 percent.

A large share of the money spent during the quarter went to established portfolio companies. Late-stage deals accounted for 55 percent of the total, compared with 47 percent a year ago, said VentureSource.

Seed and first-round companies received just 18 percent compared with a quarter of all funding last year.

California dominated the spending, with 47 percent of the nation’s total.


Googler Reports 20% Time Rule Still In Place

April 17, 2009

Google may be cutting costs to lift its profits.

But according to one Googleplex insider, the company’s 20 percent time rule hasn’t yet been sacrificed on the Wall Street alter.

The 20 percent rule, of course, is the employment clause that lets Google employees spend 20 percent of their time working on projects of their own design.

John Skidgel of the app engine team, said his goal last quarter was to make something useful with Python and JavaScript and to “prove that 20% time is alive and well.”

In a Friday blog post, Skidgel said he created “CaptionTube,” an application used to create captions for YouTube videos. It has been launched on TestTube.

The goal was to use publicly available Google APIs and put “me in the shoes of our customers who build products on top of Google’s products,” he said.

In announcing earnings on Thursday, Google said its cost cuts included laying off several hundred employees.

John Skidgel created CaptionTube with his 20% time

John Skidgel created CaptionTube with his 20% time


Peer-To-Peer Lending Club Promises High Returns To Investors

April 16, 2009

With the consumer lending business in the “shambles”, more people are willing to turn to peer-to-peer lending to borrow money, amid a slightly higher interest rates.

Which is in part why venture capitalist Rebecca Lynn think her investment last month in Lending Club – which was a series B technically but probably more of a series C – was such a deal; leading the Sunnyvale, Calif.-startup $12 million investment round.

“There are 2 cornerstones in what you invest in any economy: a disintermediate play and a large market,” explains Lynn of Morgenthaler Ventures.

And Lending Club do both.

It disintermediates banks with a more efficient way to lend money to borrowers and reward investors. And given that the consumer lending market is worth more than $1 trillion, the peer-to-peer lending business has the potential to quickly grow to be a $1 billion industry.

“Lending Club focuses on people that are prime borrowers with a credit scores of 720 or above, with average loans of about $10,000. And on the lender side, they were returning to lenders – even in a down economy – an average of 9.1 percent,” adds Lynn.

Pretty amazing indeed. But wait, there’s more: hyper-growth!

Since it started as a Facebook application in May 2007, Lending Club made more than $33 million in loans. This year, the startup expects that to jump to $150 million and then $350 million in 2010.


Analyst Sees Stability In Computer And Consumer Electronics Markets

April 13, 2009

Signs are dribbling in of an improving market place for computers and consumer electronics, even if demand for cellular handsets remains an unknown.

Broadpoint AmTech Analyst Doug Freedman more upbeat about back-to-school and holiday seasons

Broadpoint AmTech Analyst Doug Freedman more upbeat about back-to-school and holiday seasons

Doug Feedman of Broadpoint AmTech said on Monday he remains “positive” about computer and consumer electronics sales as he looks toward back-to-school and year-end holiday seasons this year.

Communications may not be seeing the same momentum, but cell phone manufacturing in March and the second quarter could be better than expected, he said.

Freedman is not the first analyst to point to greater market stability. Pundits have been saying for weeks that manufacturers began replacing depleted inventories in March, lifting orders for component suppliers.

But his commentary is an early suggestion that the second half of the year might be better than feared. He made his projection as he previewed Linear Technology’s earnings expected on Tuesday, and it comes on the same day Seagate said its quarterly business was better than anticipated.

Maybe there is hope for the year after all.


Silicon Valley: 21 Tech CEOs Lost Their Job Last Month

April 10, 2009
Tech CEOs are now hit harder by downturn

Tech CEOs are now hit harder by downturn

Since the market free fall at the end of September, the downturn was responsible for the high turnover amongst chief executives, and now more so for the tech CEOs.

“While overall CEO departures are down from a year ago, one sector that is seeing increased turnover as business conditions worsen is technology,” confirms outplacement firm Challenger, Gray and Christmas.

So far this year, 61 chief executives from computer, telecommunications, electronics and e-commerce firms have been replaced, up from 55 a year ago.

In Silicon Valley alone, 21 tech CEOs lost their job in March.

But overall, the placement firm is seeing less turnover than for the same period last year.

“Companies may be attempting to maintain more stability at the highest ranks, hoping that the continuity will help get them through this downturn,” explains CEO John Challenger.


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