4 Things For Austin Startups To Watch

It’s tough keeping up with the macro forces that can shape the strategy and execution of startups. Here’s a few things to keep an eye on as the talent wars continue and products and services are developed and refined.

Software is still big. Software in the cloud is bigger. 

It’s not realistic to think many startups will come out of the gate with enterprise software tools, but it’s a steady growth opportunity. And it’s not just relegated to the Oracles and IBMs of the world.
Smart young companies are thinking about how Gartner‘s growth numbers [below] might trickle into their coffers. ERP growth should signal to startups that companies are back in a spending mode and looking for solutions. ERP and line of business apps can only address so much. Find out where the gaps are and a need will surface.
Growth in sales of business software – FT.com 

Business software sales are growing strongly as global economies emerge from recession and companies begin to invest in IT infrastructure again in order to reduce costs, improve efficiency and expand markets. Figures published by Gartner, the IT research firm, suggest that worldwide enterprise software spending is likely to grow by 9.5 pe rcent this year and top $267bn, up from $244bn last year.

Now back to the cloud. Austin’s own vConstruct is proving the cloud’s periphery can be a profitable one. If you know their model, it’s not built around a business app, per se, but a business pain point: migration.

The cloud also hangs off ERP really well. I know a huge engineering company that will practically fund the product development for at least two startups that provide enterprise integration tools. The theme around software is simple. There’s a huge customer base [ERP] and when coupled with the could, an even bigger ecosystem.

You can see other growth elements by looking at some analysts’ projections.  Forrester thinks that by 2016, 196 million U.S. consumers will be on a personal cloud and 97 million of us will pony up and pay via subscription or a one-time purchase.  Moreover, look at the venture community itself. Reuters reports VC heavyweight Kleiner Perkins is considering a new fund specifically for the segment.

Kleiner Perkins weighing fund targeting the cloud 

SAN FRANCISCO | Fri Jun 24, 2011 3:43pm EDT SAN FRANCISCO (Reuters) – Top venture-capital firm Kleiner Perkins Caufield & Byers is considering creating a specialized fund that focuses on cloud-based technologies. “We’re big believers in the cloud,” Kleiner’s Matt Murphy told Reuters on Thursday evening.

Before hitting the publish button in WordPress, I thought it made sense to include a blip on Redmond’s cloud roll-out. [below]

They’ve made all of the apps you love (some you hate) more data-center friendly. And it’s more than a volley back at Google Apps, it underscores the growing impatience towards the maintenance required for on-premise servers and software. That should signal opportunity to startups, certainly ones building apps for virtualization, productivity and mobile access.

Lastly, similar to Salesforce but a half-decade behind, Microsoft will strive to develop a deep ecosystem of partners that can build apps and deliver services around its cloud play. Startups should benefit from that and the continued wars between the major players.

Microsoft rolls out Office in the cloud 

SEATTLE | Mon Jun 27, 2011 8:49pm EDT SEATTLE (Reuters) – Microsoft Corp is making its biggest move into the mobile, Internet-accessible world of ‘cloud’ computing this week, as it takes the wraps off a revamped online version of its hugely profitable Office software suite.

The Post-PC Era. It’s Not Just Mobile And The Desktop’s Death.


It’s clear that computing has quite a life beyond the personal computer. Some call it the post-PC era, but arguably that’s misleading. Smartphones and tablets are just as common at work as they are on our bedside tables. Forrester’s Sarah Rotman Epps had an insightful look recently [below] at what that term really means. Hint: It ain’t about the death of that laptop on your desk. She identified it as more of a “shift.”


*Stationary to ubiquitous.

* Formal to casual.

* Arms-length to intimate.

* Abstracted to physical.

 

Those shifts bode well for startups in categories across the board, including gaming, mobile, and digital media, among others.

There’s a few companies already blending the best of mobile and media to capture a market. Startups like OnSwipe, Flipboard and Zite have capitalized on tablet-based apps and consumption patterns.

Some mobile purists might tell you not to include tablets in the mobile genre. What’s more important however, is what tablets signal. There’s a convergence in content and platforms that’s been almost solely sparked by the iPad. The ubiquity of content, (think Netflix) along with the changing nature of media consumption (third screen) creates plenty of opportunities. Just this morning, LinkedIn announced an elegant integration with Flipboard that sucks in pertinent industry feeds at the swipe of a finger. I bet that type of development wasn’t on the roadmap even a year ago.

Startups would do well to probe deeper in the areas of digital publishing, (see Cory Doctorow’s piece below) and content delivery. For digital publishing, pay attention to the quicker pace of publishing — the Twitter effect, if you will. I’d argue that had a lot to do with Tumblr catching WordPress.

The bottom line is brands and publishers are always looking for better ways to create and manage content. And with app stores, multiple channel demands, and a fight for relevance, dollars will follow for better management, personalization and curation.

 

The “Post-PC” Era: It”s Real, But It Doesn”t Mean What You Think It Does | Forrester Blogs 

Computing is changing. The news last week showed that loud and clear, as Microsoft bet big on Skype’s voice and video technology and Google announced partnerships with Samsung and Acer to build laptops running its Chrome operating system. These developments point to a future where computing form factors, interfaces, and operating systems diversify beyond even what we have today.
Publishers and the internet: a changing role | Cory Doctorow | Technology | guardian.co.uk 

Connecting with the audience is still publishing’s aim, but does the internet make it distribute first and publish later? Once in a while, someone will say something that’s so self-evidently true, and so unexpected, that you’ll spend the rest of your life working through its implications.

And If there were any doubts about mobile adoption, especially the uptake of more powerful smartphones, Google’s Andy Rubin provided some compelling data in a recent Tweet. [below]

 

For those tuned-in to mobile, you know there’s more to the untethered world than the Jesus phone and its platform. Startups aren’t just building apps, they’re thinking about interfaces to multiple platforms, enterprise integration and of course, vertical apps. Austin’s own Kinita has an intriguing model that takes some of those elements and deploys native mobile apps as a service. That’s smart because you don’t have take sides on the Web v. App Internet argument. Do both. Or better yet, have the flexibility to architect a solution that works the best for your customer’s model.

There are now over 500,000 Android devices activated every day, and it’s growing at 4.4% w/w
Arubin
June 28, 2011
We are in a post-PC era, as consumers are now toting ever more powerful electronic devices http://econ.st/jLo98p
TheEconomist
May 19, 2011

Hotbeds For High-Tech Growth

We can also take a regional look at what some of the data from Harvard’s Cluster Mapping Project tells us about industry growth. Besides the usual big footprint for the Lone Star State, startups have the luxury of pulling talent from a solid cross-section of industries. A deeper look also shows how Austin’s desire to be one of the next great innovation hubs might play out. Besides the regional proximity to big business cities like Houston and Dallas, Austin companies can almost cherry-pick from the best of emerging tech. Whether it’s renewables and biotech, or aerospace and manufacturing, the data seems to support Austin is in the right place at the right time.

What’s Getting Funded?

Another element has to do with our favorite “F” word, funding. Looking at *data compiled by GigaOm, I clipped a few items from the infographic showing which sectors are getting cash and where they’re based. The sector chart would be my bubble alert if there were such a thing.

Besides Groupon, can any of you name a social commerce startup? If you can, you should be an analyst. And I’d be licking my chops if I were in the security space, as it musters only 2 percent. I guess those VC and Angels haven’t picked up their iPad recently and read about the rise of hacktivists.

[*data // Crunchbase, Startupquote, CB Insights,INC]

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About George Dearing

George Dearing is a communication and technology professional and Founder of the Dearing Group. He advises organizations on communications and sustainability. Though he still owns a house in Austin, he now resides in Winter Park, FL. Follow him on Twitter here