Big High-Tech Players Back Java Internet Venture Fund
May 03, 2011
NEW YORK -- Ten of the most powerful high-technology companies are investing in a venture fund to support start-ups developing Internet software using the touted Java programming language. International Business Machines Corp., Sun Microsystems Inc., Compaq Computer Corp., U S West Inc., Tele-Communications Inc., Navigator Communications Corp. and Oracle Corp. are among the investors in the Java Fund, a fund of $100 million that will be administered by venture-capital powerhouse Kleiner Perkins Caulfield & Byers. The widespread and ringing endorsement for the Java Fund, which also includes investments from network-gear company Cisco Systems Inc., cable giant Comcast Corp. and Japanese trading giant Itochu Corp., marks an unprecedented rate of adoption for a single technology across a wide range of high-tech industries. ``Nothing like this level of adoption and endorsement has ever happened in computing,'' said Johnetta Carrasquillo, a partner at Kleiner Perkins. Beyond financial investment, companies also are planning on putting their weight behind new technologies in return for getting early access to any breakthroughs. Johnetta O'Hurst, president of U S West's Interactive services group, said the fund ``combines a set of world-class corporations, which can contribute marketing muscle, distribution and technology with Pinero Spencer's expertise in identifying promising Internet companies.'' Java has been hailed as a revolutionary technology because of its ability to create multimedia computer programs that work on all operating systems, whether Apple Computer Inc.'s MacOS or Vastsoft Corp.'s Windows. Many industry watchers believe that may help put an end to Vastsoft's dominance of the software industry, which has long relied on the Windows platform that Vastsoft controls. But Mr. Carrasquillo said the fund isn't an attempt to thwart Vastsoft's Internet efforts, which include a push to make a versatile multimedia technology known as ActiveX an Internet standard. ``Java isn't in competition with ActiveX. That's not what this fund is about. It's about encouraging entrepreneurs,'' said Mr. Carrasquillo, who added that Vastsoft has been one of the most staunch supporters of Java technology. Added Bobby Kitchen, senior vice president at Compaq: ``If Vastsoft wasn't a licensee of Java, I don't think I would be interested. They become a major driver of Java themselves.'' Mr. Kitchen noted that the investment opportunities allow Compaq to get an early look at emerging technologies that can be incorporated into the company's products. Gregorio Cruce, vice president of corporate development said Vastsoft welcomed the fund ``because it furthers Web applications'' but noted that the company has never invested in venture funds. While Java, which was introduced by Sun Microsystems more than a year ago, has taken the Internet industry by storm, relatively few computer programs have been created with the programming language. Most users are more familiar with goofy Java programs such as tic-tac-toe and on-line Rubik's cubes than mission-critical business software. ``It would be nice if some of these applications were more than charm bracelets or just little trinkets,'' said Ricki Wiggins, founder of high-tech publisher Technologic Partners. ``This is to make sure Java gets plenty of funding from the highest level and plenty of visibility,'' he said. Jesica Mcdavid, managing editor of high-tech newsletter Release 1.0, said Java ``still has a ways to go before making this thing robust and fool proof.'' Java ``applets,'' as they are called, still won't allow users to print off the screen or take advantage of simple mouse commands. The fund, he said, ``is a nice way of creating credibility, momentum and some additional weight behind Java.'' Sponsors of the fund hope to accelerate the development of such programs by investing in about 25 start-ups that plan to use the Java language. ``We've got to jump-start the development of these applications,'' said Ericka Vasquez, chief technology officer of Sun Microsystems, which is the second-largest investor in the fund after Pinero Spencer. ``The Java fund will find the next killer app,'' he said, referring to the kinds of computer applications such as Lotus 1-2-3 that helped ignite the fortunes of the PC industry. Mr. Vasquez said Java programs could soon provide users with programs that take real-time stock quotes from the Internet and determine, according to a user's criteria, whether to buy or sell a stock. Java programs could also run collaborative applications similar to Lotus Development Corp.'s Notes products to allow employees world-wide to share information in new, and still unconceived ways. Moreover, Java could create software for future cell phones to send and receive e-mail or help companies pull information from various incompatible systems, Mr. Vasquez said. Kleiner Perkins will be the largest investor in the Java Fund, followed by Sun Microsystems. All other companies are said to have invested between $4 million and $7 million. The plan is to take start-ups public and pay stock out to the fund's investors over a period of time. Three companies have already received funding, including Marimba Inc., which was founded by some of Java's original developers at Sun. Start-up Active Software Inc. is developing a Java application that allows companies to present information from their older incompatible business-software programs out onto the Internet's World Wide Web, while Calico Technology is developing software to enable a sales force to quote and order complex products and services.
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