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What’s Left to Know? A report by Orange Silicon Valley, the Group’s development center in San Francisco, raises new questions about the direction of IT/Internet tech research in Silicon Valley
As more and more corporate giants move their research centers to the Silicon Valley, a new study from Orange raises questions about the current patterns of academic research in IT and the Internet. In-depth interviews with leading technology and academic researchers reveal changes in attitudes, methodology and motivations that are impacting the way information technology research has been quietly but massively transformed by the unpredictable and disruptive growth of the Internet
Interviews between veteran Silicon Valley reporter Lee Gomes, and researchers from Google, Facebook, Microsoft, UC Berkeley, Stanford and more, were conducted in the spring and summer of this year. The results are being made available to the public for free as part of open dialog about the evolution of the industry.
According to one of the themes of the report, the emergence of research centered on so-called Big Data – the digital exhaust of massive platforms like Facebook and Twitter – has given corporate players an edge over academic institutions lacking the data and the infrastructure to crunch these massive data sets. New technical challenges are revealing themselves continuously to internet firms as the scale, speed as well as nature of the gigantic and chaotic real-time data flows require new solutions and approaches that do not exist today. The growth in the Internet is amplified by mobile, social, and connected TV applications that, together with their worldwide reach, are dictating which tech advances matter.
Here is a selection of Bob Ackerman’s observations. To read everything, download the full Report.
Question from Lee Gomes: What do companies need to know if they want to invest in Silicon Valley?
Answer by Bob Ackerman: Venture capital is a club, a tight little club, organized around managing risk. As a VC, I want to invest with people I’ve invested with in the past, because I know how they’re going to be there when times are good and when times are tough. We syndicate. We share information. I’ve got everybody calibrated.
But a corporation is different. The corporation walks in and says, ‘Hi, I’m from a big global company. Perhaps you’ve heard of us. We operate in 110 companies around the world. We have 140,000 employees. We have a market cap of $42 billion. And we’re inviting ourselves to your party.”
The polite venture capital response to them is, “Fantastic, let’s find things we can collaborate on.” But what the venture capitalist is actually thinking is ‘Okay, what can I sell to this guy? How do I pull money out of his pockets and use it for whatever I need to get it into?”
Lee: So what should he say instead?
Ackerman: The more truthful kind of response would be, “Who cares that you’re a big global company, because you may be here today, but you’re going to be gone tomorrow. You’re reassuring me of your commitment, but you’re corporate direction is going to change. You’re not a long term player. And so you’re going to be a tool of convenience for me in my ecosystem.” …
The history of corporate venturing, with few exceptions, has born that out. They get in, and they get out. Every two years, you’ll have new people in place. You’ll have changes in strategic direction. Corporate priorities will ebb and flow. When the markets get competitive, the top corporate guys look at the venture program – which is usually generating losses – they say ‘Who got us into this? Fire him. Get us out of it.” They forget everything they learned. But five years later, they’ll decide to start all over again.
Lee: So why should companies bother with Silicon Valley in the first place?
Ackerman: When you’re seeing the future for the first time, there’s a leap of faith required. As venture capitalists in Silicon Valley, we’re in the business of inventing the future. Yet that’s very difficult to do, and that’s why venture capitalists sometimes have a herd mentality, like, “If one of those is good and successful, we need 400 of them.” But it’s the guy who does it the first time, who sees it for the first time, who has the conviction to pursue that vision and organize people around him – how rare that type of person really is.
Ackerman: Companies who think they can use occasional venture investments to gain access to Silicon Valley research will be greeted with open arms. Then, the trouble will begin. They should keep an eye on their wallets.