Author: Wade Roush

Wade Roush wrote:

Boston-based paper and digital archiving giant Iron Mountain (NYSE: IRM) said today that it has acquired Santa Clara, CA-based Mimosa Systems for $112 million in cash. Mimosa makes e-mail archiving software for companies that use Microsoft Outlook or Outlook Web Access through Microsoft’s Exchange Server. “By combining Mimosa’s on-premises archive with our cloud-based technologies, Iron Mountain can now store, recover and discover digital content wherever it resides,” said Iron Mountain Digital president Ramana Venkata in a statement.

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Wade Roush wrote:

Boston-based radiology information management company Amicas (NASDAQ: AMCS), which had been on the verge of a buyout by Chicago- and San Francisco-based private equity firm Thoma Bravo, said today it has received a rival offer from Merge Healthcare (NASDAQ: MERG), a Milwaukee, WI-based provider of radiology workflow management software. The Merge offer of $6.05 per share exceeds Thoma Bravo’s offer in December of $5.35 per share. But the Amicas board of directors said in a statement that because the Merge offer is conditioned on third-party financing and other factors, it is “illusory and risky.” The company urged shareholders to approve the Thoma Bravo merger at the company’s next shareholder meeting on March 4.

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Wade Roush wrote:

What a wonderful world: Thanks to Fox, Comedy Central, and the other TV networks that are generous enough to post the latest episodes from their hit shows online, I can watch all of my favorite episodes on the Web on demand without paying a dime to Comcast (oops, “Xfinity”) for premium cable channels or DVR rentals. It’s hardly a case of altruism, of course. The networks make money on online video by selling so-called “pre-roll,” “post-roll,” and “in-stream” ads. In exchange for all that free content, I’m happy to sit through the ads—pretty much.

There’s just one thing that puzzles me. Having watched quite a few online episodes of 24, Glee, and Fringe (does it say something disturbing about me that most of my favorite shows are on Fox?), I’m getting pretty tired of watching the same ads over and over again. Literally the same ads. During a single episode of 24, Fox will show me a single 30-second ad eight or 10 times—at the beginning, at the end, and at every commercial break. Lately it’s been Red Bull, Double-Stuf Oreos, and Bioshock 2 ads. Evidently the network has me pegged as a twenty-something software developer with a cookie and video game habit.

I don’t mean to second-guess video advertisers at their own business, but it strikes me that showing the same ad over and over to someone who’s never going to buy the product is not an optimal use of all of the advertising time that goes along with a 43-minute TV episode. In fact, it can be counterproductive. By the time I’ve watched the same Red Bull ad 10 times, I’m so sick of the company that I’m even less likely to buy their sugar-and-caffeine concoction, even if it does promise to give me wings.

Other networks seem to have slightly more on the ball when it comes to online ads. I was intrigued the last time I logged onto Hulu, and it asked me before 30 Rock which of two Southern Comfort ads I preferred to watch. But after that one spot, the rest of the ads during the show were non-interactive and were chosen, as far as I could tell, at random. Not only that, but the 30 Rock ads looked to me like the same 30-second spots that the ads the networks show on broadcast TV, just repurposed for the PC screen.

So, here we are in 2010. I’ve got a 30-megabit-per-second Internet pipe into my house, and my browser is loaded up with glitzy interactive video software like Adobe’s Flash Player, and the cookies on my computer probably know me well enough to guess my toothpaste brand. But to the network advertising executives, it’s still 1975. Whatever happened to all the talk about targeted advertising? I could use a little bit of it right now.

“The dirty secret is that most pre-roll is not targeted,” says Bill Day, the CEO of ScanScout, a tech startup that buys ad slots from a network of 1,000 online video publishers and sells them to advertisers. “The ‘targeting’ is literally as simple as, …Next Page »

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Wade Roush wrote:

The private equity operation of Boston-based Battery Ventures helped buy out Nova Analytics, a Woburn, MA-based maker of lab and field equipment for electrochemical measurements, in 2003. Seven years later, after a string of strategic acquisitions that helped to consolidate the analytic instruments market, Battery has sold Nova to White Plains, NY-based ITT, which says the acquisition will give it one of the world’s largest selections of sensors and instruments for monitoring wastewater and other substances. The financial terms of the deal weren’t disclosed, but Battery spokeswoman Karen Bommart says “this will be a very good outcome for us.”

Almost immediately after investing in Nova, along with Ascent Venture Partners and Commonwealth Capital Ventures, Battery sent the company on a buying spree, starting with the acquisition of Corning Life Sciences’ electrochemistry product line in 2003. Eight more acquisitions followed over the next six years; in many cases, the management team installed by Battery went after companies with “stable businesses but inefficient operations,” according to a case study on Battery’s website.

“This follows a typical platform strategy from our private equity team: buy a platform company in a market ripe for consolidation, work with a strong management team to acquire complementary and recognized companies within the market, and ultimately build a company of scale that meets broad customer needs,” says Bommart.

Nova has 725 employees in the U.S. and five other countries and earned pro forma revenues of $135 million in 2009. In a statement, Nova chairman and CEO Jim Barbookles called ITT “the perfect acquirer” for Nova, since it is is already has strong analytic instrument brands in the water, wastewater, food, beverage, and industrial process markets.

The Nova sale marks the second time this year that Battery has liquidated one of its major investments. Lawson Software (NASDAQ: LWSN) in St. Paul, MN, bought Battery portfolio company Healthvision Solutions last month for $160 million.

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Wade Roush wrote:

Gradually, Cambridge, MA, is emerging as one of the world capitals of a highly specialized industry: digital effects plugins for film and video post-production. These are small software packages that production companies such as Lucasfilm or Sony Pictures buy to extend the capabilities of commercial digital compositing programs like Adobe’s After Effects, Autodesk’s Combustion, Avid’s Avid DS, or The Foundry’s Nuke. One company at a time, plugin collections from companies small and large are being rolled up by Cambridge-based GenArts, which has a clear ambition to become the country’s leading plugin vendor.

We reported on GenArts’ acquisition of UK-based SpeedSix in January 2009 and Missouri-based Wondertouch in November. Today GenArts is announcing that it has acquired two more widely used plugin collections, called Tinder and Tinderbox, from The Foundry, a London-based special effects house that’s most famous today for its Nuke compositing platform. GenArts also says that it’s inked an agreement with The Foundry to make sure that new GenArts plugins work well with Nuke, and to make it easier for customers to buy Nuke and GenArts’ plugins as a bundle.

The Foundry and GenArts are rivals and exact contemporaries (both companies were founded in 1996), and Tinder competes directly with GenArts’ Sapphire plugin collection. So the transfer of Tinder and Tinderbox from The Foundry to GenArts is the rough equivalent in the plugin industry of EMI selling its music catalog to Sony BMG or Lowe’s converting a bunch of its stores into Home Depots. A pretty big deal, in other words.

GenArts executive say their buying spree, which began shortly after Katherine Hays joined as CEO in 2008, represents the company’s effort to exploit a strategic opportunity in the special effects industry. Major film and TV production companies such as Lucasfilm are shifting away from creating most of their digital special effects in-house to using the commerical compositing programs for most effects, a changeover made possible by the growing power of graphics workstations and the growing sophistication of the commercial platforms. But for economy’s sake, says Hays, these companies don’t want to have to buy platforms and plugins from a dozen different vendors—they want to standardize on just a few platforms such as After Effects, Combustion, and Nuke, and on a common set of plugins that work on all of them.

“By building out our portfolio of products, we can offer this standardization to key customers,” Hays says. “There’s also a strong need for plugins that …Next Page »

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Wade Roush wrote:

Last summer, when the UK National Portrait Gallery and the Wikimedia Foundation got into a kerfuffle over whether the foundation had the right to copy thousands of the gallery’s high-resolution digital images to the Wikimedia site without paying, I wrote that the foundation may have been within its rights, since the original portraits are in the public domain, but that the copying was still unfortunate, since culture isn’t free—somebody has to pay to keep the doors open at the institutions that preserve and curate art. Museums shouldn’t hold digital representations of their art hostage, but it’s not unreasonable for them to ask people to pay something to use it.

Now I’m about to make a contrasting argument. There’s a debate raging over whether publishers should raise e-book prices from their current level, around $10 (for books that are just out in hardcover), to something more like $15. The publishers say that Amazon has been keeping e-book prices unrealistically low, and that they, like art museums, have to charge more to cover their costs. They usually go on to issue vague warnings about how Amazon’s predations are threatening the entire publishing apparatus with extinction. (Struggling industries always need a scapegoat. With the music industry, it was the fans. With publishing, it’s Amazon.)

If I’m in favor of paying museums a reasonable amount for digital art, shouldn’t I also be in favor of paying authors and publishers a reasonable amount for digital books? Of course. The question is what’s reasonable.

Free clearly isn’t a workable price for art or music or books. But neither is $14.99 per title—the price that MacMillan and other publishers reportedly plan to charge now that they’ve prevailed in their recent game of chicken with Amazon. My worry is that in their haste to find ways to pay for their own elephantine and outdated ways of doing business, book publishers will squelch an important new market that could offer the industry’s only long-term salvation.

There’s been a lot of good coverage of this issue recently. Just yesterday, the New York Times‘ technology section ran a fascinating piece surveying the clashing opinions over e-book prices. The most telling quote, in my opinion, came from novelist Douglas Preston, who was attacked by Amazon commenters because his publisher withheld the Kindle version of his latest book, Impact, to bolster hardcover sales. “The sense of entitlement of the American consumer is absolutely astonishing,” Preston told the newspaper. “It’s the Wal-Mart mentality, which in my view is very unhealthy for our country. It’s this notion of not wanting to pay the real price of something.”

David Pakman, a partner at venture firm Venrock, penned a contemptuous rebuke of this line of thinking in a February 3 blog post. Forcing higher prices on consumers on the argument that the “real” cost of a book is the hardcover price, or $14.99, or whatever publishers say it is, is more than just arrogance, Pakman pointed out. It also flies in the face of …Next Page »

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Wade Roush wrote:

Doing your business computing on cloud systems owned by companies like Amazon sounds like a great idea, on the surface of it. Who wouldn’t want to rent computing resources just for the time they’re needed, rather than shelling out for expensive on-premises equipment that might sit idle half of the time? The problem is that most big companies have already invested millions in their data centers, and have painstakingly assembled the right set of operating systems, enterprise applications, and virtualization technologies to support their businesses.

CloudSwitch, a venture-funded startup in Burlington, MA, has built software that gives companies a way around this dilemma, allowing them to try cloud services without having to abandon their legacy systems. In a nutshell, the software erases the boundaries between on-premises and off-premises computing systems, at least from the user’s point of view, making cloud systems into nothing more than a temporary extension of existing resources. It’s like adding a room on to your house just for the weekend, when you’re having guests over.

When we first profiled CloudSwitch back in June 2009, its executives weren’t saying much about how the software does this, or exactly why it’s a money-saving proposition. But recently the company has been testing its software with beta customers and talking more openly about the product. And last month I got a briefing from John McEleney, CloudSwitch’s CEO, and Ellen Rubin, its co-founder and vice president of products, on the company’s progress since the summer—which already “feels like a decade ago,” McEleney says.

While the 2008-2009 recession hit business hard, McEleney says, it was good news in a way for CloudSwitch, since the ongoing pressure to reduce costs is forcing many companies to look harder at cloud computing. “The reality is that hardware costs are pretty fixed, so it was a lot people who got decimated,” McEleney says. “The people who remain—the IT guys who keep things running—are the ones hurt the most. They have to do more with less. So we see 2010 as the year when many organizations will be testing out [cloud] applications.”

Most of CloudSwitch’s potential customers are already using virtualization software from companies like VMware to make the most of their existing hardware, by yoking together separate machines and letting them run multiple operating systems. So Cloudswitch’s tool is designed to run inside those virtualized environments. Its job is to …Next Page »

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Wade Roush wrote:

It’s not every day you get to see three great East Coast rock bands on the same stage with two amazing West Coast bands—so we made a point of documenting our big fundraiser last Thursday, the Battle of the Tech Bands 3: Seattle vs. Boston.

Today we want to share the amazing footage and images captured at the event by our volunteer videographer, Mark Woit, and our photographer Kevin Vogelsang.

CLICK HERE FOR SLIDE SHOW (18 images)

Our video is below. And for even more great photos, you can check out Boston24.com’s awesome coverage of the band battle.

We want to thank all our bands for coming out for the event, including Audience Favorite winner The Dirty Truckers (from Jamaica Plain, MA, representing American Well), Most Innovative Band winner Lions Ambition (from Seattle, representing Boeing), and worthy competitors Deadbeat Darling (from Brooklyn, NY, representing Pictela), Juda’s Wake (from Seattle, representing Microsoft) and McAlister Drive (from Boston, formerly representing Linedata Services). For winning the Audience Favorite prize, The Dirty Truckers took home a seven-hour package of studio recording and engineering time donated by Bristol Studios of Boston. And for winning the Most Innovative Band prize, Lions Ambition was awarded a year of online merchandising services donated by Nimbit, also of Boston, as well as three hours of digital media/strategy consulting from Ten Minute Media, of Holyoke, MA.

We’re donating net ticket proceeds from the event to two great local non-profit groups, Science Club for Girls and Year Up Boston. Once all the beans are counted, it looks like we’ll be contributing about $1,100 to each organization.

For helping us to make the Battle of the Tech Bands 3 a big success, we want to thank our event sponsors, Microsoft New England Research & Development Center, McNamee Lawrence & Co., Aerva (which flawlessly handled the audience text message voting for the third year in a row—and this year added interactive photos as well), Bristol Studios, and Nimbit; our band sponsor, Brad Feld; our event partners, the Cambridge Chamber of Commerce, MITX, and the Mass Technology Leadership Council; and our event supporters, Alnylam Pharmaceuticals, American Well, Avalon Ventures, Chen PR, The Computer Cafe, General Catalyst Partners, Google, Google Ventures, Harmonix, H&R Block, Heartland Robotics, IDEO, iRobot, Ten Minute Media, and Vertex Pharmaceuticals.

Xconomy Battle of the Tech Bands 3: The Video

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Wade Roush wrote:

If you change your tech startup’s name, you might get a one-line notice from the business press. If you get a prominent firm to invest in your technology, particularly if it’s a sizeable amount or if it’s your first big round of funding, we’ll probably write a paragraph or two. If you move your headquarters from some far-off place like Israel to Massachusetts, we’ll pay more attention—especially here at Xconomy Boston, where part of our job is to write about what makes New England such a great place for innovation. But if you do all of those things at once, you’re pretty much guaranteed to grab enough attention to get a whole article.

The company formerly known as Datanetis—an “influencer marketing” startup born outside Tel Aviv in 2005—is hitting a triple today. It’s announcing it has changed its name to Pursway, opened a new headquarters in Waltham, MA, and collected $6 million in Series A funding from Battery Ventures.

Scott Tobin, a general partner at Battery, says Pursway has a “breakthrough” technology that will establish influencer marketing as “the next marketing revolution.” The company’s software combs through huge caches of data on consumer behavior—the kind of business intelligence that airlines or wireless operators or casinos routinely collect. The goal is to identify the “influencers,” that is, the customers who seem to have an outsize effect on other people’s behavior, whether for good or ill. With this information in hand, Pursway’s clients, who already include Vodafone Group, Orange, Foxwoods Casino in Connecticut, and a range of unnamed companies in the retail, financial, and travel sectors, can supposedly make better decisions about how to spend their customer-acquisition or customer-retention marketing dollars.

According to CEO and co-founder Elery Pfeffer, the company decided recently it has spent enough time testing the technology with Israeli and European customers, and that it was time to move up to the big leagues in consumer marketing—meaning North America. To do so, it needed a major capital infusion and a catchier name. (”Pursway,” pronounced per-SWAY, is a portmanteau word formed from “persuade” and “sway.”)

So, that’s the news in a nutshell, together with the reasoning behind it. But when Pfeffer and his co-founder Ran Shaul visited Xconomy last week, I was far more interested in Pursway’s actual technology, and its grand plans for changing the way all consumer-facing companies relate to their customers.

The problem the company has set out to solve, says Pfeffer, is that “consumers react less and less to marketing messages and more and more than ever before to social influence—to the recommendations of friends, family, coworkers.” By identifying the loudest …Next Page »

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Wade Roush wrote:

TripAdvisor, which was founded 10 years ago this month, is a study in paradoxes:

• The Newton, MA-based company’s family of travel-related websites attracts 35 million unique visitors each month, making it one of the most successful Web properties in the Boston area—yet few people even realize the company is headquartered in New England.

• TripAdvisor’s sites are all about helping consumers plan trips to far-away destinations—but the company’s founders and managers don’t consider themselves travel enthusiasts.

• InterActive Corporation acquired the startup in 2004 made it a unit of Seattle-based Expedia (which was later spun off as an independent company)—yet TripAdvisor operates almost autonomously and is still led by its founding CEO, Stephen Kaufer.

• TripAdvisor’s most valuable asset has long been the millions of hotel and restaurant reviews contributed by its users—yet it’s now branching into the one segment of the travel industry, air travel, where customer opinion (read: chronic dissatisfaction) seems to have little impact on ticket sales or airline operations.

To reconcile all these apparent contradictions, it turns out, you need to look at TripAdvisor’s history. It’s a very long one, at least in Internet years. Remember GeoCities, Excite, Go, Blue Mountain Arts, AltaVista, Snap, or Xoom? Neither do most other people—but they were all among the top 15 most-visited websites back in 2000, when TripAdvisor got its start.

The way Kaufer tells it, TripAdvisor began as a specialized search engine designed to help people locate first-hand reviews of travel destinations, but became a destination unto itself once the founders recognized the value of the reviews being written by its own users and figured out how to make money on them. Kaufer says the company was “a couple of months shy of going out of business” in late 2001 when it finally discovered that it could collect handsome fees whenever readers clicked through to hotels or other businesses and make reservations. That’s still the main source of its revenue today.

Almost since it started, then, TripAdvisor has been a lead-generation engine more than anything else: it attracts visitors with its huge collection of user-generated reviews, then funnels them to travel-industry sites to complete their transactions. “Think of it as a glorious Yellow Pages filled with all the information you might like to find about where you’re going, with contact information, candid photos, and reviews,” Kaufer says.

That means the company’s main challenge has always been building and maintaining a highly scalable website with a very fast back end and …Next Page »

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