Someone at the Austin Business Journal is doing their homework and scouring filings at the Texas State Securities Board. That seems to be how they uncovered the $13M funding of StorSpeed. I’m guessing that they really did uncover some sort of scoop here, as the website just has the logo on it and nothing else (check the picture). A quick search in the "whois" database shows the domain name registration as private, and they didn’t bother do snag the .net and .org top level domains (which is really really odd…. I mean for $9 it’s kinda worth it).

Most notable is not who is investing in this deal, but who is not investing in this deal. Austin Ventures is notably absent. Early stage investors and Sand Hill Road residents El Dorado Ventures is an investor (also an investor in Austin-based Triactive, Austin-based Convio, and Jigsaw which AV invested in). Hunt Ventures is also an investor. They have an Austin office, and as far as I can tell this is their first investment in an Austin-based company. Vesbridge Partners is also an out-of-town investor that co-led the Series A round. Palomar Ventures, with three offices in California, rounds out the investor list. Palomar appears to have provided funding to Austin-based Lombardi Software.

StorSpeed is designing a disruptive technology at the intersection of storage and networking that will dramatically increase network storage performance. They seem to have some great industry veterans on the founding management team.

The Austin Business Journal writes today about House Bill 2714 which takes effect this fall. Computers and monitors sold in Texas must have free recycling provided by their manufacturers, and the equipment must have the company brand name on it.

No doubt our planet (including the ocean) is getting full of garbage. I will personally gladly pay a few more dollars for a PC or monitor knowing that somebody is stripping out the lead and mercury. So who will benefit from this trend?

Round2 Technologies based in Round Rock.

TechTurn, headquartered in Austin. Founder and CEO Jeff Zeigler recently won an Entrepreneur of the Year award, which I wrote about here. The company also has locations in Virginia, Reno, and Chicago.

I’m not sure how many other states are following suit, or maybe have had such programs for years already. Texas is not necessarily known for being environmentally progressive. But lets hope all 50 states eventually have similar regulations, or that the major PC and monitor manufacturers voluntarily provide this service anyway.

Dell has actually been a leader in this whole recycling area. You can find more details about their program here.

Inc. Magazine wrote last month that 85% of a company’s value resides in intangible assets like brand, databases, employee expertise, and software code. But these assets are hard to categorize, inventory, manage, or license for profit. That’s where Fluid steps in. They help large companies manage and commercialize their software assets.

For most companies this would be a kind of one-off exercise that would be difficult to execute, and in the end the costs associated with it would probably exceed any license revenue generated. So Fluid has set out to create processes, tools, and technologies that will help companies be successful doing this. A quick look at their client list reveals clients like Hughes, DuPont, Microsoft, and Lockheed Martin.

In talking with some of the management team over there they appear very enthusiastic about prospects for the company. They’ve been very quiet in the news department, but perhaps soon they will announce some new customer wins, or some other good news.

We’ve had some time to absorb this revelation, and I’ve been pondering the strategic implications of this move. In the interest of full disclosure, Dell is a client of mine but I have no inside information on sales strategy or anything remotely to do with retail sales.

Wal-Mart is famous for having low cost suppliers. Reports in the trade press say that the Wal-Mart buyer for socks, for instance, will call in all the sock vendors to sit around a table and bid on Wal-Mart’s business. Reportedly it’s trecherous, and there is no vendor loyalty whatsoever. The focus is on a certain minimal level of quality, but mostly on price. And as consumers we enjoy those lower prices when we shop.

Given this I can’t imagine that Wal-Mart just chose Dell out of the blue. You know there was some big meeting where Dell, HP/Compaq, Lenovo, and every other major brand dropped their prices as low as possible to become the sole PC vendor to be sold at Wal-Mart. So this probably isn’t high-margin business for Dell.

Popular wisdom claims that by the 2nd tech support phone call to Dell, all the margins they made on your computer sale are now offset by the costs of providing tech support to you. So at even thinner margins, it might even be the 1st tech support call puts Dell in the red on that sale.

Now let me make a broad sweeping generalization that will probably generate hate mail. Wal-Mart stores are generally located in smaller towns across the country where the average wage is lower, and the average level of education is lower than in highly urban areas and major cities.

Lower marings + more tech support = bad strategic move

The only value I can see here is a marketshare play. If Dell really wants to report higher market share in PC sales than HP, then this is the way to go. However there are going to be a lot of angry people trying to get tech support (replacement mouse, how do I install more memory, etc) from Wal-Mart employees whose only response can be "sorry, call Dell tech support."

I’m going to go out on a forecasting limb to say that in 18-24 months Dell unwinds this deal.