Infrastructure: the new venture area

For technology watchers, looking for upcoming trends, it’s always of interest to see where the venture capital sector is investing. Of course, not every business that attracts VC investment succeeds. But it’s an indicator of where attention is focussed.

MIT’s Technology Review carries an article which reviews this area of IT. With a report from the recent Venture Summit East conference (that’s East as in US East Coast – in Boston), it provides three useful insights.

First – start-ups are beginning to recover from the downturn. It’s been a dry six months for public offerings but a few are starting to come through again.

Second – what the angels are investing in now is new technologies that can assist the oldest of commercial imperatives: saving money. In particular, reducing the cost of infrastructure. The article cites two, perhaps surprising, examples.

Virtualisation is today’s hotspot; but  opportunities exist to update the “outdated” technology behind it. And there’s still a need to reduce the cost of storing and managing data which is an order of magnitude (or more) greater than the cost of acquiring it.

And third – that while VC priorities are still informative, the emergence of so much cheap and scaleable cloud infrastructure means that some startups with really viable ideas don’t need venture funding. In fact, they may be damaged by it with a push to go too far too soon. Technology watchers, take note!

• What VCs Are Investing In, Technology Review, 26 May 2009

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