I typically try to stay out of the Microsoft wars because I’m pre-labeled as a sour grapes ex-employee or a ex-employee, kool-aid drinking shill, depending on how people view what I say.
So, I hoped over and read the article. There are a couple of things worth commenting on.
First, and probably most important, is this whole notion of Venture Capital Loyalty.
With respect to Mary Jo Foley and Darryl Taft (the writers), they are missing a rather fundamental point about VCs in general. We, as a group, aren’t loyal to anything component technology, that’s just silly. To make a headline out of that comment is, well, it’s entertainment let’s just put it that way.
VCs who specialize in technology might focus on tools or electronic commerce, biometrics, RFID, VOIP, or any number of a zillion other technologies. The key word is focus. They do a ton of research, get seriously smart on the topic and try to invest in companies that will deliver value to the limited partners who have put up the cash in the first place.
If somebody, for example, showed up with the killer application that finally allows home movies to be compressed into 1/32th of the file size, transmitted at 10x speed of today, and played full screen at HDTV resolution on your laptop with complete security and DRM (evil!), most VCs aren’t going to be walking from the potential investment because of a technology ‘loyalty’ be it .Net, J2EE, Ruby, Ajax or Cobol.
That’s simply not how the process works.
Brad Silverberg made this very point in three separate places. Ignition is technology agnostic, doesn’t care, looks for returns as the key motivation. To eWeek’s credit they give that point a fair amount of ink.
But you have to give Mary Jo credit for earning her pay. She appears to have gotten the two quotes she needed in order to jump to the loyalty comment. The first comment was that, no, Ignition hasn’t made any .net investments. Now, keep in mind what this actually means. It means that companies they have invested in are developing on an open source or non .net platform. This has nothing to do with Ignition’s loyalty to .net, nothing at all.
If you wanted to make the observation that out of the last, say, 150 start ups funded, 137 of them are based on non-Microsoft technologies and Ignition was a data point, well, now you’ve got something to report on that’s based on simple numbers with some good quotes by Brad. But zip to do with loyalty and everything to do with reality and what’s coming in the front door.
The second quote, or series of comments, concerned Microsoft answering questions about how to make money by investing in .Net. Here again, great stuff by a very smart, senior, former executive of Microsoft making points about developers investing time, money, effort into building products that are based on .net without really knowing how those companies are going to make money. Brad’s points are dead on. In order to have a successful ecosystem come out of .net, you have to demonstrate to the start up/developer community that there is money to be made. Again, nothing to do with VC loyalty toward .Net.
The article has this quote:
“Silverberg said he hopes Microsoft chooses the former, because, ‘We'd love to create more billion-dollar companies by investing in .Net.’”
And presto we have those investing in .net comments, we haven’t yet, hence, we aren’t loyal. He obviously meant doing investments in companies that are based on the .net technologies, but the reporters decided to go for the literal and, well, there you go. Slice -n– dice it anyway you want, nothing Brad said has anything to do with loyalty toward one set of technologies over another.
This is, in my view, lazy reporting. Forget the lack of other VCs being quoted because most would probably say the same thing, i.e we aren’t loyalty one way or the other and would answer the questions of investments honestly; you either have a portfolio company developing with .net or you don’t.
It’s lazy reporting because Mary Jo (who’s been around and knows better) is skipping over how VC firms work and using a set of quotes out of context to lay out a conclusion with a headline that simply isn’t true (in the literal sense) or based on business realities. She has facts that could have reported the point (I think) she was trying to make without being lazy and inaccurate about how VC firms work.
Are more companies with a non-Microsoft core being funded today then Microsoft centric companies? My data says yes, your mileage may vary, ask a VC near you.