Author: Om Malik

“When people are part of a new company that gets very successful very quickly, such as Google (but this effect is by no means limited to Google), they sometimes confuse the root of this success and incorrectly assume that the success was due to their own actions. They then want to translate this experience to other opportunities, either in the same or in related spaces, which in some cases may turn out, but in most cases will fail, just like the majority of all VC investments fail. … The only thing different about the Google mafia compared to other similar periods in history is that more money was made at Google by more people (and more money will be lost here).”

Andy Bechtolsheim, co-founder Sun Microsystems and angel investor in Google.

Mozilla has appointed Aza Raskin as creative lead for Firefox. Raskin is one of the foremost experts in user interfaces and over the years has developed expertise in web user interfaces. Raskin joined Mozilla in 2008 when Mozilla acquired his start-up Humanized. Since then he has been working on various projects such as Ubiquity, the Concept Series, the Firefox Mobile, Geode, Privacy Icons, and Jetpack for Mozilla Labs, a quasi R&D arm. Raskin believes it is time to bring many of those technologies into the browser. In a blog post, he writes:

The web continues to evolve in the search and social domains. We are a new breed of info-vore meets webapp-ian. The average web user spends more time with their browser than with their family. Firefox has become faster, cleaner, and way more powerful (HTML5, canvas, streamable fonts, open video,…), but has yet to have the user experience paradigm shifts that gives users the new tools they need to accommodate the new web’s work flows. My hope is to work with and within the Firefox team in defining next generation browsing. To move towards you-centric browsing.

“My first project is to think about how to make the browser more social, spatial, and tabs more semantically meaningful,” he writes. Raskin, like most of Mozilla, is facing a tough road ahead. While they benefited from Microsoft’s inertia early on, the world of browsers has been transformed over past few years. Firefox is now competing with Google’s Chrome, Apple’s Safari and a reenergized Microsoft Internet Explorer.

I downloaded Google’s Chrome browser on my Macbook Pro about two months ago. I have not used Firefox since — mostly because Chrome is much faster and less taxing on the computer. I rarely use Safari and when I do, it is to watch Netflix movies, for Silverlight works well on Safari. In many ways, having all these browser options works as much against as much as in favor of Mozilla and Firefox. I might be on the extreme edge of the browser adoption curve, but who is to say that few years from now a majority of the people won’t jettison Firefox.

From that perspective, Mozilla has made a smart move. I have spent a lot of time with Aza talking about the web, browsers and where we are all headed. While we disagree on many things, I have come to admire his relentless focus on making the web simpler and easier to use. From multi-tasking within the browser to adding social context to content, he understands that the web is changing and Firefox has to change with it.

Photo of Aza Raskin courtesy of laihiu via Flickr

A few weeks ago, Apple decided to start taking pre-orders for its widely anticipated iPad. It’s one of those devices that, if successful, will redefine the computing landscape — much like its lil’ cousin, the iPhone. But there is an equal chance that the world may not be impressed with its brilliance.

Given how excited I’ve been about the device, many of my friends (and colleagues) are wondering why I didn’t order one. The answer is pretty simple: I want to write about the iPad launch from the point of view of a retail buyer. I plan to head over to the Apple store in San Francisco’s Union Square area on Saturday, stand in a line and see if I can actually get my hands on one that way.

Though what I really want to see is how Apple re-organizes its retail experience to fit the iPad. Right now, when you walk into a typical Apple store in the U.S., you get a pretty binary experience: Macs on one side of the store and iPhone/iPods on the other. Apple has used this clear demarcation of its two major product lines — computers and entertainment devices — to create a brilliant retail experience.

And soon it will add to the mix the iPad — which is not quite an iPhone and, well, definitely not a computer. So on which side of the aisle will Apple put this device? I think the retail display will pretty much define into which category the iPad falls. I’m hoping that it redesigns the stores entirely, carving out a whole new space for the iPad.

If it were up to me, I’d line up a single row of iPads, with their front and backs alternating. They’d be mounted on a transparent stand, so that from a distance it would look as though they (iPads) were floating in the air. Wishful thinking on my part, I know!

Morgan Stanley analyst Katy Huberty expects Apple to ship more than 6 million iPads this year, much higher than the consensus expectation of 3-4 million. She expects 2.5 million iPads to ship between March and May and about 750,000 more during the June quarter. Huberty points out that iPad suppliers are estimating that Apple will make between 8 and 10 million of these devices. She believes that a million iPads would mean about 25 extra cents a share in earnings for Apple.

I think Huberty might be underestimating the money-making potential of the iPad. Having played around with it for a whole 20 minutes, I can tell you that this device will make you spend money on content — apps or books or music or whatever — much more often than the iPhone, even though there will be a fewer iPads on the market. Given that Apple takes roughly 30 percent cut of sales, it could be another bonanza in the making for Apple.

Now back to waiting for the weekend!

Photos of Apple Store, Fifth Avenue, New York Courtesy of Apple Inc.

Exactly one month from now — on April 29th — California gubernatorial candidate Jerry Brown, uber-investors Vinod Khosla and Steve Jurvetson, Google’s Green Energy Czar Bill Weihl, CPUC Commissioner Dian Grueneich and many, many others will take the stage at our annual Green:Net conference, where they will talk about how information technology — computing, software, broadband networks and the web — is key to fighting climate change.

More importantly, they will talk about the market opportunities that such an intersection between green and computing will offer — and how to harness those opportunities now.

Among the opportunities that will be explored in depth at Green:Net 2010:

The Smart Grid

The U.S. government has started to dole out a whopping $4 billion for utility smart grid projects, and utilities around the world are forecast to be spending a total of $12 billion a year on smart grid infrastructure by 2013. Proof that the smart grid industry has gone mainstream: GE even devoted an entire Super Bowl ad to it.

Among the companies betting big on the smart grid that we’ll hear from at Green:Net are Silver Spring Networks (which  is widely expected to go public this year); networking giant Cisco; IBM, which has been playing middleman between the infrastructure folks and the power companies; and from the telecom side of things, Sprint and Motorola. For as Ericsson’s CEO Hans Vestberg said recently, “Broadband will be a pre-requisite for a 21st Century low-carbon economy.”

We’ll also be interviewing execs from Google and Microsoft, both of which have developed competing web-based energy management tools that will be connected to the smart grid.

The Connected Car

Mainstream electric vehicles like the Nissan LEAF and GM Volt will start to go on sale in 2010, the first of a million EVs expected to be on the market within five years. So how, as Earth2Tech’s Josie asked recently, will grid operators survive the crush? At Green:Net, the president of Reliant Energy, Jason Few, will offer a utility’s perspective.

The next generation of vehicles will also be increasingly connected to broadband networks and will rely on software and computing. Execs from GM, Nissan, Better Place and IBM will be at Green:Net to talk about what’s next for the connected car, notably how it will be a platform for application development.

Smarter, Cleaner Internet Infrastructure

All this computing means a considerable amount of additional power consumption. With that in mind, companies like Google are trying to innovate around designing servers and data centers to use as little energy — in the cleanest form — as possible. Google’s Green Energy Czar Bill Weihl will unveil some of the search giant’s data center energy innovations at Green:Net.

Greentech investments soared in the third quarter of 2009 to become the leading venture sector for the first time (see Cleantech Financing Trends: 2010 and Beyond, GigaOM Pro, subscription required), and are expected to remain healthy throughout 2010. Behind many of these innovative companies are the same investors who led the growth of the Internet, among them:

• Steve Jurvetson, managing director of Draper Fisher Jurveston, which was among those that brought the world Hotmail, has now backed electric vehicle firm Tesla and Craig Venter’s Synthetic Genomics.
• Bill Gross, Idealab founder and serial entrepreneur, is heading up eSolar, which uses computing and algorithms to lower the cost of solar
• Vinod Khosla, the founder of Sun Microsystems, is investing in battery makers Sakti3 and Seeo, and green car companies EcoMotors and Transonic Combustion through his greentech-focused firm, Khosla Ventures

The result will be an untold number of greentech jobs. California Governor Arnold Schwarzenegger made a green economy a backbone of his administration — and gubernatorial candidate Jerry Brown plans to do the same. He’ll be laying out his vision and taking questions from the audience at Green:Net.

The space where greentech and computing meet is ripe with opportunity. Don’t miss out — join us at the Mission Bay Conference Center in San Francisco at Green:Net 2010.

Images courtesy of Flickr users splorp, B Tal, Nissan and the Networking the Green Economy Report.

Last week, I reported that Quora, a Palo Alto, Calif.-based company started by former Facebook employees such as Adam D’Angelo and Charlie Cheever, was looking to raise money that would eventually give it a valuation of around $100 million. Today there are reports that the company raised about $11 million at a valuation of $86 million.

Quora, a massive user-created question-and-answer site that may one day compete with Yahoo Answers and Wikipedia, itself confirmed the funding in an ambiguous-sounding press release but never got around to giving details. The new funding has come from Benchmark Capital with former Facebook employee Matt Cohler joining the board. So why is the company getting this super valuation?

The Magic Wands

As I explained last week in my post, Hot Deals, Big Money: What’s Up With Silicon Valley?, Silicon Valley is in the meh phase and there are only a handful of companies which qualify as exciting. That’s one of the reasons why VCs are willing to bet big dollars on them.

Secondly, there is a premium these days on startups created by former Facebook stars. Much as early Googlers were viewed as wizards with special magic wands, a similar belief is sweeping across Sandhill Road. Benchmark Capital seems to have cornered the market on ex-Facebook guys — first Asana and now Quora — even if it has to indulge in high valuations.

Now don’t get me wrong — Quora is full of smart engineers and great product guys. If there’s anyone who can leverage Facebook Connect and Facebook’s social graph to build a company, it’s Charlie Cheever, formerly the leader of the Facebook Platform and the Facebook Connect platform.

Is Quora Really Worth the Money?

The big question is, of course: Is Quora worth this excessive valuation? And the answer is simple: no.

I think there is more noise around this startup because many venture capitalists, entrepreneurs and other Silicon Valley insiders are talking amongst each other on topics that concern them. Considering that the service is still in closed beta, it makes sense that right now there is a lot of “fidelity” in the conversations about Quora.

The company talks in abstract terms about its plans for the future, including opening up the gates to everyone. It is not clear how these high-quality conversations are going to avoid sinking into a cacophony as Quora starts to chase growth and attract more customers. But it has to do to that — after all, with VC funding comes the VCs’ desire for a return on their investments.

The big challenge facing Quora is the one that was faced by another, similar company: Aardvark. That startup had similar buzz, a pretty well known (and respected) founding team and market attention, yet could barely grow to some 90,000 users before Google decided to buy it for a reported $53 million.

Matt Cohler, who invested in Quora, argues that the concept of fidelity is very relative and means different things to different people, especially to people outside of Silicon Valley.

“One of the big changes I have seen happen on the social web is that different users of these social web services all take whatever they want from the service and use it in a very personal way,” he said. “The Quora teams understands that and that is why they are special.” Cohler said that there are pockets of non-Silicon Valley activity on the service and it was important for him to see that before investing in Quora.

Sure, much like Liz, I love using Quora, but the question I always ask myself is: Would I miss this service if tomorrow it disappeared from the face of the earth? Maybe for a few seconds. After all, we’re on the Internet, and soon something new will come along to make us forget the past and move on.

I was just in New York for a week of fun and learning. It was my chance to meet people outside the Silicon Valley hothouse and get their perspective on the world. Of course, it gave me a chance to read Michael Lewis’ new book, The Big Short. More importantly, the trip allowed me to not bother my team and allow them to peacefully launch new looks for our blogs, TheAppleBlog and Earth2Tech. Congratulations, folks!

These redesign is part of a network-wide overhaul — NewTeeVee will soon get a facelift as well — meant to surface content from our various blogs for your reading pleasure. Speaking of reading recommendations, here are some of the best pieces worth your attention.

Cody Willard: Cars, PCs and transistors– how to trade off a repetitive history of industry cycles. Willard, one of my favorite stock gurus, makes an interesting link between the ever-shrinking number of car makers and PC companies.

Di-Ann Eisnor: Why the Future of Location-Based Advertising Looks Like Twitter. If you want to understand the challenges of the mobile advertising marketplace, look no further than this in-depth essay by the CEO of recently shuttered Platial.

Startup Company Lawyer: A comparison of various different series of seed financing documents, including those from popular startup schools such as Y Combinator and TechStars.

Social Media Kills the Database: A new web startup guy laments the relational database and how companies of his generation are looking to open source software such as Hbase and Hadoop to break the tyranny of the relational database. It is a remarkably coherent and easy-to-understand essay and worth reading.

Paul Kedrosky: Hitchhiker’s Guide to Financial Regulation.

Can you build a successful company in a downturn? The answer is yes, as this video illustrates. Digg CEO Jay Adelson, venture capitalists Tim Draper and Steve Jurvetson, both of Draper Fisher Jurvetson, Skype backer Howard Hartenbaum and his August Capital colleague David Hornik and the legendary Bill Draper of Draper Richards weigh in on the topic in this video.

Photo of Startup 2.0 by ceslava via Flickr, under Creative Commons license.

From the minute I saw the iPad, its transformative qualities were pretty obvious to me, though it has drawn its share of skeptics. One of them is Dan Lyons, a good pal of mine who pens a blog called The Secret Diary of Steve Jobs. Fake Steve’s day job is writing about technology for Newsweek. And now it seems he has finally changed his tune about the iPad, at least according to this article in the most recent issue of the newsweekly.

I got a chance to use an iPad, and it hit me: I want one. Right away I could see how I would use it. I’d keep it in the living room to check e-mail and browse the Web. I’d take it to the kitchen and read The New York Times while I eat breakfast. I’d bring it with me on a plane to watch movies and read books. That may not be life-changing, but is it worth 500 bucks? Yup. Done. Sold.

These comments are very different from those he made in this video interview about two months ago, at the iPad launch ceremony. I am betting that many iPad skeptics are going to have a similar positive reaction to the device.

It’s hard to go even a few blocks in New York these days without hearing about Foursquare, the location-based social network. With more than 600,000 subscribers and endless media attention, the startup is now being actively wooed by four major venture capital investors, which are valuing it at between $50 million and $70 million. Who will get to invest? Only time will tell.

But Foursquare isn’t the only startup seeking a “big round” at a “big valuation.” Back in Silicon Valley, one of the hottest deals under way right now is Quora, the Palo Alto, Calif.-based company co-founded by ex-Facebookers including its former CTO, Adam D’Angelo. My sources tell me the company is seeking to raise an amount of money that would eventually see it valued at as much as $100 million. Will Quora get it? Who knows. But one thing is clear: Big-ticket investments are making a comeback.

Valley’s Meh! Phase

From the way I see it (and I am a contrarian), we are in the meh phase of the technology cycle. Meh, according to Wikipedia, is “an interjection, often an expression of apathy, indifference, or boredom.” For me this meh phase means that the technologies being developed are increasingly incremental. (This is not a knock on web startups; when I covered semiconductor and networking startups, I experienced this same phenomenon.)

On the web today, Twitter and Facebook are solidifying their positions of dominance. In many ways, what transpired in the search business — Google won the game and left mere morsels for its competitors — is happening in social networks.

The new reality of the social web (and the Internet) is that both Facebook and (to some extent) Twitter are dominating our online attention, siphoning minutes away from other services. In the process they are making it difficult for other services to capture our imagination and time. Even Farmville, the blockbuster game from Zynga, is dependent on Facebook for our attention.

What’s Hot?

Few startups offer services that generate the same kind of excitement as those that emerged in the first half of the decade — namely Flickr, Digg, Reddit, MySpace, Twitter and Facebook — but the four I like are Spotify, Foursquare, Gowalla and DailyBooth. Of them, one is still not available in the U.S. (Spotify), the other two are mobile-centric and the last — DailyBooth — well, frankly I’m too damn old for it.

Two new services have already become part of my daily routine — Quora and Hunch, both of which provide a smart way to deal with the increasing deluge of information on the web — but they are slightly ahead of their time, are a tad too cerebral and are waiting to hit the hockey-stick part of their growth curve. There are other useful, fun apps out there, of course, but none of them are spreading like wildfire just yet. The fact is that we need higher-speed connections and better back-end technologies to really unleash a new phase of innovation — but that’s a topic for another discussion.

In the meantime, these “exciting” companies that I just pointed out have all raised or are looking to raise a humongous amount of money, among them. Spotify for example, has raised more than $50 million from the likes of Li Ka-Shing and Founder’s Fund while Hunch has raised $12 million from Khosla Ventures.

On the flip side, we’re seeing a lot of excitement around connected devices, especially smartphones and new computing platforms such as slates and tablets. Whether you like the iPhone or not, it goes without saying that it has transformed higher-end phones into a major platform of innovation. There are 140,000 apps on the iPhone, another 30,000 on Android and hundreds if not thousands more are in the process of being created every day.

The applications on these connected platforms treat social networking and location services as mere features. Facebook Connect is nothing more than an authentication mechanism — and a smart, simple way to socialize on the web. Similarly, location is merely a way to provide context to what you’re doing — whether that be watching a movie or eating pizza at the neighborhood pizzeria. Whether you buy this information from Skyhook Wireless, use Google Latitude or check in on Foursquare, location information is an infrastructure service.

Ride the Momentum

With the building blocks (Facebook Connect, location data) and platforms (iPhone, Android, Chrome, web) already in place, as an entrepreneur you now have the opportunity to develop compelling user experiences. Those that offer the most simplicity — to the point of bordering on serendipity — will be a driving force in the years to come. I argued as much during a bloggers-only panel at MediaPost’s OMMA Conference in San Francisco. But achieving such simplicity is a much tougher task than most realize.

Why? Because tomorrow’s applications and devices will have to handle copious amounts of data that can be impacted by one or more variables, such as social networking status updates and geo-location information. To stand out, entrepreneurs will have to build fairly unique and compelling game-like experiences. Dennis Crowely and his co-founders have done exactly that with Foursquare.

Even though it currently has fewer than a million users, people are excited about Foursquare — hence the venture capital firms bidding up the company’s next capital infusion. While with Hunch it’s all about deep technology and a high-quality management team, the others have momentum. That’s why I predict that fast-growing DailyBooth will soon do a big round, in the process justifying Brian Pokorny giving up his lucrative gig as a venture capitalist and becoming its CEO.

Such momentum is what VCs are betting on, for these big-ticket deals have the potential to break out of the cycle of incrementalism that we’re in. And momentum plus cash, as Facebook and Twitter have proven, goes a long way towards firming up a startup’s place in the technology landscape.

But it does not guarantee success.

Goat picture courtesy of Flickr user Jon Stammers

“Every quarter we grab huge chunks of market share from SAP…SAP’s most recent quarter was the best quarter of their year, only down 15%. But SAP is well ahead of us in the number of CEOs for this year, announcing their third and fourth, while we only had one.” Oracle CEO & Founder Larry Ellison on competitor SAP during the third quarter 2010 earnings call with analysts.

Between iPhone and the Android, I wonder if anyone else has a chance to even become a player on the mobile web. This morning, AdMob released its Mobile Metrics Report for February. I know it isn’t the most accurate data out there, but directionally it speaks volumes about the market. According to the report, smartphones now account for 48 percent of traffic on the AdMob network, up from 35 percent a year ago.

What I found more interesting was that the iPhone OS share rose to 50 percent of all requests vs. 33 percent in February 2009. Android increased its share from 2 percent in February 2009 to 24 percent in February 2010. In comparison, Symbian’s share of smartphone requests fell from 43 percent in February 2009 to 18 percent in February 2010. The boost in Android and iPhone’s traffic can be attributed to two things: full-featured browsers and mobile apps.

While in New York, I’m currently using the iPhone with Sprint’s Overdrive MiFi and BlackBerry to stay connected with everyone back in San Francisco. I open the laptop only in the morning and late at night when I want to write out longer posts. I am betting my behavior is not unique as more people are spending time on their smartphones.

According to the report, the share of feature phone traffic in AdMob’s network declined from 58 percent to 35 percent year-over-year, even though the absolute traffic from feature phones still went up 31 percent. Mobile Internet devices experienced the strongest growth of the three categories, increasing to account for 17 percent of traffic in AdMob’s network in February 2010, the report said. Of course, this category was led by the iPod touch.

Updated: Online video fans might be wondering if the world has come to an end — after all, YouTube isn’t working this morning. When you try and check out YouTube.com, you get the “service not available” message. The videos embedded in other web sites are working without a problem. We will update the post as we get more information.

Update: YouTube has returned after more than 90 minutes of downtime. We’re still looking into what caused the outage this morning.

Updated: Time Warner Cable this morning confirmed that it’s launching Wi-Fi hotspots for customers of its NYC RoadRunner broadband service. According to the company:

Through a partnership with Cablevision, Time Warner Cable customers will also have access to thousands of free Optimum WiFi locations throughout Cablevision’s service area. Time Warner Cable Wi-Fi is now available at several Wi-Fi zones in Manhattan and Queens, including several parks and some Long Island Railroad platforms and their respective parking lots in the company’s service area.

High-Speed Internet customers of both Time Warner Cable and Cablevision will be able to access free, unlimited Wi-Fi services in each other’s New York City metro service areas, allowing for a fast Internet connection at designated Wi-Fi zones. Time Warner Cable Road Runner customers will have access to Cablevision’s Optimum WiFi network, and Cablevision’s Optimum Online customers will have access to Time Warner Cable Wi-Fi zones when they travel out of their service area.

Time Warner Cable Wi-Fi zones include:

• Eight commuter rail platforms on the Long Island Railroad Port Washington line: Woodside, Flushing Main Street, Murray Hill, Broadway, Auburndale, Bayside, Douglaston, Little Neck;
• Manhattan: Bryant Park, Madison Square Park and 79th Street Boat Basin;
• Four parks in Queens: Bowne Park and Kissena Park in Flushing, Baisley Pond Park and Railroad Park in Jamaica.

Time Warner Cable, a large cable service provider based in New York City, is likely to launch a Wi-Fi initiative as soon as tomorrow, according to those familiar with company’s plans. Time Warner Cable is likely to launch Wi-Fi hotspots in New York’s oft-used areas such as train stations, bus terminals and other popular public spaces. The Wi-Fi access mostly likely will be a free service for Time Warner Cable’s ISP customers.

The Wi-Fi zones were first launched by Cablevision, the Long Island-based cable company, almost two years ago and have seen more usage of this free service. Many are using Wi-Fi to connect their iPhones. Time Warner Cable can use Wi-Fi to blunt the relentless attacks from Verizon’s FiOS offering on its broadband offering.

Thumbnail image courtesy of Flickr user suttonhoo

Dell Computer, once viewed as a fearsome force in the world of Internet infrastructure, has lost some of its awe. Much like its desktop business, the Texas-based computer hardware maker has been put into the shade by its rivals such as Hewlett Packard, IBM and newer entrants such as Cisco Systems But even more so by the growing popularity of infrastructure as a service, which allows companies such as Amazon to sell on-demand computing resources without end customers buying the servers.

Enter Joyent, a San Francisco company that started its life as a web hosting company and after a few pivots is now a supplier of cloud computing services to companies big and small. The company is now going to provide Joyent cloud platform software to Dell, which will in turn use that software to offer a new Dell Cloud Solution for Web Applications. This would allow Dell to sell its gear to companies that are looking for ways to set up private clouds.

Dell, which is rumored to be an investor in Joyent, has helped companies build private clouds based on its software delivered on Dell machines. The new deal also includes Perot Systems, the services arm of Dell. “They aren’t building on Joyent as a hosted platform, but rather allowing anyone to build out a cloud like Joyent.com, using our software,” Joyent CEO David Young told me earlier today. He later later wrote on the Joyent Blog:

But our end goal has never been to be a hosting provider – there are plenty of those available around the world. Our goal has been to build a software platform that could enable unprecedented efficiency and manageability of infrastructure. We believe that when a platform is built that provides for a fully-programmable data center, it will allow Web developers to start thinking about the data center as a computer.

He explained to me that the company in many ways is making another pivot — going from being a plain vanilla cloud computing service provider to becoming a software provider as well. This doesn’t mean that Joyent is jettisoning its cloud hosting business, Young said, but instead believes that the future for any company like Joyent is in software. Its rivals at Rackspace would agree as that company has been trying hard to add software chops.

Thanks to a new Microsoft pilot program, Amazon Web Services’ enterprise customers can now bring their EA Windows Server licenses into the cloud, activate them, and then launch Amazon EC2 instances running Microsoft Windows Server at the Linux/UNIX On-Demand or Reserved Instance prices. This is yet another step by Amazon to continuously woo the corporate customer and add features to meet the needs of large customers.

The Microsoft Pilot Program is only open to companies that are based (or have a legal entity) in the United States. The company must have an existing Microsoft Enterprise Agreement that does not expire within 12 months of your entry into the Pilot. In addition, Microsoft wants other assurances such as “licenses.” Enrollment starts today and will continue until September 23, 2010.

In what could be a red-letter day for not only broadband but for technology stocks, Calix Networks, a Petaluma, Calif.-based broadband equipment maker, has gone public. Shares of the company, which makes equipment for fiber-based networks, especially for independent service providers like CenturyTel, started trading on the NYSE under the ticker “CALX.”

The company raised $82.3 million after selling 6.33 million shares at the top end of its price range, for $13 a share, in an offering underwritten by Goldman Sachs and Morgan Stanley. At last check, shares were changing hands for $16.42. I think the success of Calix’s IPO bodes well for other companies such as Force 10 Networks and data center provider Telx, both of which also hope to go public in 2010. Together they represent the powerful trend of Internet infrastructure upgrades that is currently underway, thanks to demand for broadband-enabled applications, the rise of cloud computing and the popularity of mobile Internet devices.

Calix is an old-fashioned Silicon Valley company. It’s raised gobs of money — more than $200 million from private equity and venture investors including Riverwood Capital, Sprout Group and Foundation Capital. Other investors in the company include TeleSoft Partners, Redpoint Ventures and Azure Capital Partners.

Calix CEO Carl Russo, well known in Silicon Valley for two things — selling optical equipment startup Cerent to Cisco Systems for more than $8 billion and racing cars — last year told me that the company was on target to have sales of $250 million. According to its S-1, Calix clocked sales of $232 million and lost $22.44 million for 2009.

Nevertheless, the company is looking at a bright future — as the National Broadband Plan gets implemented and broadband-related stimulus relief funds are spent by small and independent telecoms, Calix could see a nice lift in its business.

Eucalyptus Systems, the Santa Barbara, Calif.-based company based on an open-source cloud management platform, last week shuffled its management deck — it replaced Woody Rollins with former MySQL chief executive Marten Mickos, who until recently was an EIR at Benchmark Capital. In his new role, Mickos is being tasked with turning Eucalyptus into a big business.

Eucalyptus, which started out as an open source project funded by the National Science Foundation and headed up by Dr. Rich Wolski, essentially allows companies to build their own private cloud, negating the need to make use of public cloud offerings. Its platform is compatible with Amazon Web Services’ API as well as others like GoGrid. Eucalyptus is giving away the core software but will make money from add-ons and proprietary extensions.

Mickos’s first task is likely to be that of raising more money. From what we’ve heard, the company might be raising a big slug of it — at a $100 million valuation. Such a high number makes sense to me — after all, when you add a star CEO like Mickos to a company, its valuation jumps almost by default. Eucalyptus previously raised $5.5 million from Benchmark Capital and BV Capital.

Yet Mickos clearly has his job cut out for him. While Eucalyptus has done many things well, it nonetheless faces the classic dilemma of any startup based on open-source software: how to get rid of the perception of being a “free” offering. Sure you can upsell a lot of other services, but that market is never really large enough. Unless you are, say, Red Hat.

You could argue that Mickos faced the same issues with MySQL (which also had Benchmark backing), but given the sheer size of the database market, MySQL was a fairly unique opportunity. It came at the right time — just before the so-called Web 2.0 revolution. MySQL trounced it competitors — both proprietary and open source — because of its wide adoption.

Eucalyptus, given that it offers a whole different class of a product, will have its adoption challenges. There are way too many competitors (such as VMware) and open-source options out there — the market is up for grabs. Which means that Mickos will have to show that history does in fact repeat itself.

Related GigaOM Pro content (sub req’d):

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