3 Big Ideas from Frank Artale: Seattle’s Startup Ecosystem, VC Ground Rules, & the New Inflection Point

7/15/11Follow @curtwoodward

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and do two weeks of due diligence,” Artale says—but, he adds, that doesn’t mean quicker investments are off limits in his role at Ignition.

An IT Inflection Point
In the consumer Web world, plenty of people have pointed to heated recruiting, skyrocketing valuations, and mega-million-dollar fundraising rounds as a parallel to the pre-bust bad old days of the late 1990s. When it comes to the current big changes under way in IT infrastructure, Artale says it feels a lot more like 1993.

Around that time, the technology industry began adopting faster, more standardized networking gear—”buildings were re-wired for Ethernet”—and computer companies started adopting new standards for servers. That became the new platform, leading to better network operating systems, new data security tools, and major businesses on top of those networks, like business-scale e-mail.

Now, all that capital is moving to the “cloud” of remotely managed data centers, enabling cheap, quick, powerful computing for basically anyone. And that’s what looks a lot like the early 90s to Artale.

On one hand, that allows companies to send a horde of previously in-house database services—e-mail, customer relationship management, human resources—to an outside vendor. That won’t happen overnight, but “as a new company comes into existence, they’ll likely survey all of their choices.”

“The difference is the way enterprises will have to manage access to those things and manage compliance and governance—or at least understand how their data is backed up and protected,” he adds.

For entrepreneurs and smaller software companies, the benefits of having massive computing power at their fingertips means it’s possible to build complex technology services with a fraction of the money and time once required. Artale points to examples like Mill Valley, CA-based MessageBus, a startup that manages e-mail systems for other companies.

“Whether they’re databases or messaging infrastructures, or anything that anyone can think up, it becomes fundamentally easier for these services to be published,” Artale says. “I think you’ll be able to see applications that are built much more simply and easily because of a lot less drudgery that has to be taken on from an operations perspective.”

Curt Woodward is a senior editor for Xconomy based in Boston. Email: cwoodward@xconomy.com Follow @curtwoodward

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