Saturday, September 1, 2001
Dropped From the List
Accelerated Networks: Going public in April of 2000 was a tough proposition. Accelerated Networks had its time in the sun before its stock price steadily went into a free fall. The market for the company's voice-and-data-over-broadband products simply fell through the floor. De-listing on the Nasdaq looks imminent.
Aceva Technologies: Aceva is still around, for which we'll give it credit. But this top VC-backed financial transaction "solution provider" still shows few concrete signs of success - specifically marquee customers.
Art Technology Group: Web and e-commerce design and development, the market in which ATG plays, has bottomed out, taking with it the company's revenues, its stock price (down 98 percent from its 12-month high) and any hopes of profits in the near future. Its cash reserves are precariously low, and put against the current burn-rate, the company seems close to crashing into bankruptcy. It needs a drastic new killer app to get out of this malaise.
Asera: Asera received not only market attention, but a boatload of money. The Vinod Khosla pedigree was supposed to take it to rapid liquidity. Yet the ASP model faltered and Asera has re-oriented itself as an enterprise software platform company enabling what it terms the "real time enterprise." Will people really buy it? Asera will have to prove to the world that it is a solid company, and not just a venture that seemed to have all the right ingredients but failed to deliver on its promise.
Computer Science & Technology Software Services: In the last year, the company has failed to maintain the kind of growth it had earlier. It has not innovated to adopt newer technologies, and remains very dependent on localized professional services.
Concur Technologies: Its sagging stock price, and significant losses compared to cash available, puts it out of the si100 this year. It offers corporate expense management software and services that "automate costly and inefficient business processes" - one of the first items to be struck off the list of priorities of a cost-conscious CIO.
CyberTech Systems: This provider of technical staffing services is shifting toward becoming a full-blooded solutions provider. As a result, growth has been stunted, and it will be interesting to watch as this company navigates rough waters.
Echomail: An incredible number of eCRM solutions providers have sprouted all over the market, providing an entire range of customer support services, including e-mail. In this market landscape, Echomail's reliance only on its e-mail offerings, and on the profile of its CEO, known industrywide as Dr. E-mail, may not be enough for it to garner customers.
eGain: With corporate purse-strings tightening, customer acquisition for eGain is getting increasingly difficult. An 86 percent jump in net losses to $127 million, on cash reserves of about $42 million despite a healthy increase in revenues, doesn't bode well for the company. We sincerely hope that we will be able to consider eGain for next year's si100.
eHealthinsurance.com: As was so often the case in the Internet boom, the idea sounds great as a business pitch, but it's hard to eek out a real market. There is nothing in eHealthins urance.com's offerings that makes it compelling for a consumer or a business.
Epinions.com: They changed the online shopping experience, but will they survive as a business? Not all pioneers are richly rewarded.
Everypath: Scraping Web sites was a hot technology for a while, until the wireless data hype wave moved on. Everypath is reportedly close to running out of cash, and fighting to survive.
HelloBrain.com: The "intellectual capital exchange" idea didn't entirely work out - perhaps a classic case of starting a company to start a company, instead of having an idea or technology satisfy a need in the market. Now the company is trying to reorganize itself as an enterprise software play…along with everyone else. It better hurry and deliver some revenues, before the VCs coming knocking at the door asking for their money back, whatever is left of it.
InfoSpace: Lofty, often ridiculous claims by CEO Naveen Jain notwithstanding ("Infospace will be a trillion dollar company"), profits elude the company, as large chunks of money from its over-hyped IPO and secondary offering walk out of its bank account every quarter. Furthermore, the dot-com bust and m-commerce's failure to revolutionize the way we live and work make us wait InfoSpace out for a year - and see if the company can pull off the tricks needed to put it on a decent, sustainable path to a viable business model.
Jamcracker: Jamcracker is still a large company with a brand name, dynamic leaders, and solid backing. But its ASP business model - initially targeting mostly smaller high-tech or Internet customers who were in the same boat as it was - is questionable. Jamcracker is high profile, but it hasn't achieved visible traction with large customers worthy of its perceived stature. We hope they prove us wrong and find success.
Medsite: With the dot-com hype over, Medsite now simply appears to be nothing but an online store for the healthcare industry. There's nothing wrong with this business model, except that without a real technology play, it no longer belongs in the si100.
NightFire Software: High profile investors and board, but little noticeable traction in the market.
NovaSoft Information Technology: With the shrinking IT spending by corporate America, competition amongs IT services companies is hot. As a result, only the strongest ones have survived in the si100 this year. We will continually watch NovaSoft’s performance next year.
ON24: Streaming media has yet to find its legs. ON24's coverage is solid, but for now people seem to still turn to the TV and switch on Bloomberg or CNN..
Paraform: This high-flying startup with top-gun funding from the likes of Paul Allen's Vulcan Ventures unceremoniously scaled down its operations because of its inability to raise a new round of financing needed to fuel new product development. It is a hard knock on the young founding team that included technical wiz-kid Venkat Krishnamurthy, founder and CTO. He described the experienced to siliconindia as a fast ride from, "Grow your topline, to preserve bottomline." Now with only 15 people, down from a peak of 75, it has moved out of its sprawling offices, hoping to cut expenses and achieve profitability with the current customers it has.
Primus Telecommunications: With the stock price down 95 percent from its 52-week high, Primus is gasping for survival in the fickle, shark-infested waters of long-distance telecommunications services, where profits are elusive as prices continually tumble. Net loss after tax: $264 million.
Responsys.com: Got solid traction with investors and the press, but doesn't show signs of concrete success. Gone are the days of form over substance.
R Systems: R Systems has performed well through the nineties, but its heavy reliance on high-tech clients may hurt its future significantly.
SiRF: Everybody loves this GPS technology, but by now we would expect the company to have inked a major deal with a top customer. Technology for the sake of technology does not a business make.
Snapfish: Free is a wonderful word for consumers, but in the business world, recovering from the dot-com, profitless dream world, free sounds like death. So when a company bases its business on developing photos for free, go ahead, use the service, but don't expect the business to be around forever.
TeamOn: The company develops e-mail solutions, and "an online office" for small businesses. It will be hard to make money in the face of iconic competitors - especially that huge one based in Redmond, Wash. The founders of TeamOn should know the one we're talking about!
Tripath Technology: Tripath, with unglamorous, but cool technology developed in the amplifier space, hit a big bump before it even reached the revenue growth ramp. Sales are slow in picking up, and the wobbly market position of its customers doesn't help either. Money in the bank is alarmingly low to sustain marketing and product development - two areas in which a company this size desperately needs financial support. We sincerely hope that Tripath, with its truly ingenious technology, will survive and make it to the si100 next year. Its back to basics for founder CEO Adya Tripathi.
Versata: The hype surrounding ASPs made it a wild ride, but Versata is now fighting for survival, with few cash reserves, heavy losses, and a stock stuck well below a dollar.
Zkey: The story here is short and simple: mobile e-commerce fizzled on the launch pad, and there is as yet no clear business model in sight.
