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Silicon Valley Bank VC Panel: Technology & Sector Trends

Silicon Valley Bank VC Panel: Technology & Sector Trends. Arjun Gupta TeleSoft Partners Silicon Valley l Europe l Israel November 6, 2001. CONTENTS. Page. Public Market Pricing Dynamics 1 Private Market Pricing Dynamics 2 Key Opportunities in the Digital Decade 3 .

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Silicon Valley Bank VC Panel: Technology & Sector Trends

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  1. Silicon Valley Bank VC Panel: Technology & Sector Trends Arjun Gupta TeleSoft Partners Silicon Valley lEuropelIsrael November 6, 2001

  2. CONTENTS Page • Public Market Pricing Dynamics 1 • Private Market Pricing Dynamics 2 • Key Opportunities in the Digital Decade 3

  3. PUBLIC MARKET PRICING DYNAMICS • Public Market Players • LBO & Buyout Firms $147MM • “Crossover Funds” • (ICP, TCV) = $50MM 1 $$$ = $950MM 2 $1BB • Morgan Stanley Study(From 1/1/80 – 3/31/96) • 801 Technology IPO’s • Average IPO was $147MM • Largest IPO was MSFT at $300MM 1998 - 2000 Dot.com IPO’s > $1BB Public Market$$$ $100MM Private VC Market $$$ Time Early Middle Late

  4. PRIVATE MARKET PRICING DYNAMICS $400-500 MM Late Marketing development 2-3x <1 year $200-300 MM Danger Mid 5-10x 6 months Product development <$25-35 MM Early Stage Pre-1998 1998-1999 1999-2000 $150-300 MM $400-500 MM $ 1 BB+ IPO/acquisition expectations $200-300 MM $100 MM 2-3x 1-2 years 2-3x <1 year $40-60 MM $100 MM 2-3x 1-2 years 4-5x 9 months <$10-20 MM <$20-25 MM

  5. KEY OPPORTUNITIES IN THE DIGITAL DECADE (2000-2010) Electrical to Optical Transition • Last mile bottleneck (100 Mbps and 1 Gbps Ethernet Access, VDSL, FTTH, FTTB) • Emerging 40 Gbps requirements (4x capacity @ 2x 10 Gbps cost, space, power) • Dynamic optical networking (provisioning, protection, channel assignment) • Adaptive signal management (gain, chromatic dispersion, PMD, encoding) • Optical packet switching (optical buffering, IP over optics) Broadband Wireless • 2.5G, 3G, 802.11x, wideband CDMA, GPRS, UMTS • New applications and services (data/Internet, location-based, transactions, voice recognition) • Infrastructure and mobility management (cost effectiveness, roaming, security/encryption) Transition to Packet Switching (IP) from Circuit Switching (TDM) • Matching voice requirements and compliance (SLA, QoS) • Video conferencing and video mail • Innovative, easy-to-use advanced services (interrupt-driven) Applications Software for the “Real Time,” Intelligent Enterprise • XML, .NET, XP (peer-to-peer applications, client/server architecture become legacy systems,) • Software imaging and proactive security applications Enterprise Networks and Data Centers • “Utility” resouces (server blades, virtual SAN/NAS storage) • Management software for networked storage • Disaster recovery and security (Navy: 2,000 TB storage, 60,000 servers, 350,000 clients) Next Generation Semiconductor Chipsets • Integration of optics and electronics • Storage processors and IP accelerators

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