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The Evolution of The Israeli Information Technology (IT) Industry. Prepared For: Innovation in Israel @ 60 March 30, 2008. Israel’s IT Strengths. Corporate Entrepreneurship – IBM, Microsoft, Intel, Cisco, Motorola, Google etc. Track record (examples)
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The Evolution of The Israeli Information Technology (IT) Industry Prepared For: Innovation in Israel @ 60 March 30, 2008
Israel’s IT Strengths • Corporate Entrepreneurship – IBM, Microsoft, Intel, Cisco, Motorola, Google etc. • Track record (examples) • Intel: Pentium MMX, Banias, Advanced DSP, wireless • Motorola: QUICC family • National: 32000 family • Marvell: Networking switch ICs • IT hotbed • Demographics - one of the best educated workforces in the world • R&D expertise & history of creating premier technologies • Defence/military/intelligence related R&D • Tremendous concentration of technology leaders • Leadership in DSP, Networking & Communications • Software, systems and semiconductor knowledge and expertise
Israel’s IT Strengths Cont. • Large ASIC/ASSP customer presence: • Cisco, Alcatel-Lucent, Nortel, ECI, RAD and hot telecom/data-com startups • Innovation and Entrepreneurial culture • Extensive commercial ties with the global community • Modern infrastructure for technological development • Existence of most of the chain: • IDMs, fab-less IC companies, foundry, test house • Generous R&D grants and on going government commitment
Modern Infrastructure for IT Development • World-class education institutions such as the Technion (Haifa), Weizman Institute of Science (Rehovot), Hebrew University (Jerusalem), Ben-Gurion University (Beer-sheva), Tel-Aviv University, Haifa University and Bar-Ilan University (Ramat Gan). • History of creating premier companies- Amdocs, Comverse, Mercury, Check Point • A well established presence of multinational companies (not only IT): Microsoft, Intel, Alcatel- Lucent , Motorola/Freescale, IBM, Nortel, SAP, Unilever, Sony, Fuji, Toshiba, Brother, 3Com, Boeing, British Telecom, News Corp., Siemens, Samsung, Cisco, and HP • Microsoft built its first, and Cisco built its first R&D facility, outside of the US in Israel • Motorola/Freescale’s Israel facility is the company’s largest development center in the world • Intel has established few fabrication plants and a major R&D center in Israel
Years of Strong IT Multinational Presence (*) – At Tower Semi – Israel’s only pure-play wafer fab
Incubator for Creativity "Israel has a spectacular people, great energy, unique intelligence – an ability to solve problems. They like to win… Israel is very welcome place for investment and prosperity." Christopher Galvin, former CEO, Motorola • The Pentium MMX technology was designed by Intel in Israel • Motorola/Freescale’s processor (MSC8101) was planned and developed in Israel • Sun’s development center in Israel is largely responsible for the development of the international standard for Java data security • Amdocs is the world’s leading OSS player • Comverse is the world’s leader in voicemail messaging systems • Check Point Software is a leader in VPN and Firewall markets • 60% of cordless phones chips were designed by DSPG • When you read a magazine, the chances are high that the color printing is using a system originally developed by Scitex • The odds are that most telephone calls in China go to an ECI Telecom DCME system to route the call • AVX Israel developed the world’s smallest “on board” fuse for FSL hard disk drives
Continuous IT Investments • "Israel is the second Silicon Valley, and it is therefore the only other place we have chosen to expand our activities." • Michael Moritz, Sequoia Capital General Partner, March 2001 • Vibrant local investment community - Angels, Incubators and Venture Capital • Increasing involvement of international rand name VCs and Corporate Venture - IBM & Sequoia Capital chose Israel for their first VC investments outside the US. Many funds followed • Around $1.2B invested in 2007 – more then half into over 160 IT companies* • (*) Source - PwC MoneyTree Report
IT is The Driving Force in Israel’s High Tech IndustryIsraeli Equity Investment Allocation by Industry Sector
About AxcessNet • Primary facilitator of cross-border strategic business development (BD) transactions between Israeli companies and US IT concerns for over 15 years • Works with early stage technology companies to identify potential strategic partners and develop consequential transactions with a small number of critical partners • Completed numerous transactions: • Technology and product licensing (OEMs) • Investment and financing • Merger and acquisition (M&A) (*) All securities related activity is handled by AxcessNet LLC, a registered broker-dealer, member FINRA and SIPC