A young Canadian software startup with Boston investors is now part of a big Boston-area company. Ottawa-based Blaze Software has been acquired by Cambridge, MA-based Akamai (NASDAQ: AKAM) for an undisclosed cash sum.

What’s interesting here is that Akamai, the Web content delivery and networking giant, is making a move into Web performance optimization—basically tackling Web performance at the browser level (what some call “front end”), rather than the network level. Akamai has been positioning itself as a one-stop provider of a secure platform for businesses to reach customers via the Web, mobile, and cloud. That approach also includes, among other things, speeding up Web and mobile applications, as evidenced by the company’s recent acquisition of its California-based rival Cotendo for $268 million.

Today’s deal is no doubt smaller than that, but it could be an important sign of things to come—especially around Boston. Blaze started in 2010, and its seed funding came from local investors CommonAngels and Boston Seed Capital. So why sell now?

“You always have a choice of how you want to grow the business,” says Chris Sheehan, managing director of CommonAngels. “It made a lot of sense for the guys to partner up with Akamai, who’s so strong in the [content delivery network] space. When I made the investment, [Web performance optimization] was just beginning. The timing was sooner than I expected. But in the last 12 months, this whole thing has really started to take off.” [Disclosure: CommonAngels is an investor in Xconomy, and Sheehan is a board member at Xconomy.]

Blaze’s approach is to optimize the code on Web pages so as to speed up the transmission of content and render pages faster on whatever device the customer is browsing on—PC, tablet, or smartphone. This is particularly useful for e-commerce and media sites, which tend to get gummed up by lots of different pieces of code loading on them. The company’s technology (and team) will be integrated into Akamai’s cloud platform, said Rick McConnell, executive vice president of products and development at Akamai, in a statement.

In speeding up websites, Blaze competes directly with Boston-based companies Yottaa (which is also in Boston Seed’s portfolio) and SiteSpect. Google’s team in Kendall Square also released a free tool for Web page optimization in the fall of 2010.

It’s not just about making websites faster, however. All of the above companies have been trying to combine Web optimization with business analytics so as to help businesses track things like sales and customer behavior more effectively. Now Akamai is firmly in the game, and we’ll see how that affects the competitive landscape.

“It’s going to make it a lot harder,” Sheehan says. “It puts a lot of pressure on the other startups.”

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It’s a question as old as human nature. You’ve heard the stories, you know all the famous examples. Steve Jobs, Larry Ellison, Michael Eisner, the list goes on. All difficult characters with strong personalities—and hugely successful companies.

So, in today’s ultra-competitive tech and business world, does a CEO have to be an asshole to be successful?

First of all, let’s get our terminology straight. There’s no hard and fast definition of the term, but you know it when you see it. Bullying or backstabbing behavior towards subordinates or partners? Check. Public humiliation of employees? Sure thing. Tantrums, abrasive language, egomania, and other unprofessional displays? Yep. (See a related Xconomy story about bad bosses.) But more subtly, there’s stuff like not returning messages, passing people off to underlings, talking way too much, and saying different things to different people. And more generally, not caring what other people think. Which, of course, can also be a very good thing.

Some months ago, a group of prominent Boston-area tech CEOs discussed this question of “assholicism”—rhymes with Catholicism—at their regular meet-up. Some may have felt they should be tougher leaders or negotiators. Some wanted to pick up management tips and strategies. Others were reflective about their own styles that have served them well. So…is it necessary to be a jerk? Apparently the discussion took all day (and even came up in multiple meetings).

The upshot: Yes, a CEO has to be somewhat of a jerk to succeed. At least, it can be helpful—but there were plenty of caveats.

“It was concluded on some level that this was the case,” says Dave Balter, the CEO of BzzAgent (owned by Tesco’s Dunnhumby), who was part of the group. “But there was a huge amount of debate and not everyone agreed.”

One of those dissenters would be Brian Halligan, CEO of HubSpot, the fast-growing marketing tech firm. Reached by e-mail, Halligan said that being a jerk “used to work” for leaders, but that “it is not acceptable today.”

His main reasons—neither of which I would call deeply fundamental to human psychology or the nature of leadership—are that “smart GenY-ers don’t put up with that stuff,” and that corporate information flow and reputations have become more transparent, so CEOs can’t get away with bad behavior anymore. It “used to be that information was centralized at the asshole,” he writes.

I also pinged Brad Feld, the tech entrepreneur-investor, while he was in town. He was unequivocal that good leaders don’t have to be jerks. “Some of the sweetest people in the world are super successful CEOs,” he says.

So perhaps there are deeper trends at work here. … Next Page »

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Some big acquisition news before the holidays here. Cambridge, MA-based Akamai Technologies (NASDAQ: AKAM), the Web delivery and networking giant, said today it is acquiring a competitor, Sunnyvale, CA-based Cotendo, for $268 million in cash. The deal, which has been rumored for the past month, is expected to close in the first half of 2012.

Akamai has been positioning itself as a provider of a secure software platform for businesses to reach customers via Web, mobile, and cloud. Cotendo competes with Akamai in the realm of accelerating Web and mobile applications. The California-based company started in 2008 and has about 100 employees, more than half of them based in Israel.

About a year ago, Akamai and MIT filed a lawsuit against Cotendo alleging patent infringement. Presumably that case is resolved now.

This is a relatively rare case of a Boston tech company acquiring a Silicon Valley company. Most of the other big deals this year have gone the other way (such as Oracle-Endeca, Google-ITA, eBay-Where, and HP-Vertica).

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It’s hard to believe that two companies that have spent the last three years suing each other really mean it when they say that together they will be stronger. I’m talking about speech recognition competitors Cambridge, MA-based Vlingo and Burlington, MA-based Nuance Communications.

The two software makers announced Tuesday that Nuance would acquire the younger, smaller Vlingo. It came as a shock, just months after Cambridge, MA-based Vlingo hit Nuance (NASDAQ: NUAN) with a lawsuit that included allegations like commercial bribery and unfair competition.

On the surface it looks like a potential last resort option for the smaller startup after years of costly legal battles (covering patent infringement, false advertising, and more). But the marketing machines of Apple and Google and their newest voice-controlled smartphones, such as the iPhone 4S, could mean a host of new threats in the speech software space, causing the formerly embattled companies to join forces to survive, a number of Boston mobile experts have said.

All pending lawsuits between the companies are now “stayed,” Vlingo CEO Dave Grannan told me, meaning that they’ll be put in limbo until the acquisition closes, at which point they’ll be officially dismissed. Grannan has previously said he’d be open to an acquisition by Nuance if the terms were favorable. In a phone interview Tuesday afternoon, Grannan declined to discuss how much Nuance paid for Vlingo, but did want to talk “the timing of the transaction.”

The shotgun marriage of Nuance and Vlingo comes two months after Apple introduced its iPhone 4S with the built-in voice-controlled virtual assistant Siri, which can handle everything from searching for weather information to calling a cab.

“That has caused just a legion of new competitors to enter the space,” Grannan said. His company makes voice-recognition software that exists as a standalone application sold in the Google Android, Blackberry, and Apple iTunes app stores, and built into devices like Samsung mobile phones.

Facing other voice recognition startups doesn’t seem as menacing, but confronting one major Internet giant does. “It’s more scary for us that Google is going to double down its investment to try to catch Apple’s Siri,” Grannan said. “Both sides realized that we’ve long since passed the value of competing. If we’re going to survive in this marketplace we need to cooperate.”

Mountain View, CA-based Google (NASDAQ: GOOG) recently acquired Clever Sense, the maker of a mobile assistant app called Alfred that makes recommendations on nearby bars and restaurants. The purchase has been pegged as part of Google’s strategy to take its share of the voice-enabled virtual assistant space.

“Rather than spend the next year in legal battles, [Nuance and Vlingo] decided to join forces on this,” said Mark Lowenstein, managing director for the consulting firm Mobile Ecosystem. The acquisition … Next Page »

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Phil Beauregard is hungry. His scrappy startup, Objective Logistics, is hungry, too. Good thing they are in the restaurant business.

Actually, the truth is they want to turn the restaurant business upside down. But in a good way (if you believe them). OK, I’ve avoided the G-word for as long as possible. Beauregard and company are trying to add a “game layer” to the restaurant workplace. Before you reach for your “gamification” barf bag, know this: they are doing it to help restaurants improve their workforce and customer service, while also helping to reward top-performing employees.

The news today is that Objective Logistics is moving its headquarters from New Bedford, MA, to Cambridge (keeping the old office too), and that it has raised a $1.5 million venture round led by Atlas Venture and Google Ventures. NextView Ventures, Canary Ventures, and individual investors also participated in the round.

It’s a natural step for a young startup that has innovative technology and is still learning how to sell its stuff in an ultra-competitive industry. Beauregard, the company’s CEO and co-founder, says he had been thinking about raising a smaller bridge round (around $400K—he had previously raised a $750K seed round), but he talked to VC Jeff Fagnan at Atlas and decided to make the deal with him and Rich Miner of Google Ventures. (Seth Priebatsch of SCVNGR, no stranger to game layers, made the intro to Miner.)

“We want people [investors and partners] who can fill in tons of holes where we’re deficient as a company,” Beauregard says. “These guys are the ones we want to work with. They are so good for the city of Boston.” He adds, “We want to prove ourselves.”

Reached for comment, Fagnan touted Objective Logistics’ “pure perseverance and relentless drive” and said its founders “executed like crazy” over the past year. The five-person company says it is looking to grow to 10-12 employees by mid-2012. Beauregard says he is looking mostly for engineers to join the team.

When I first talked with Objective Logistics back in May, the company sounded like it was pretty set with its technology. Its basic idea is to provide software as a service so that restaurant managers and waitstaff can see exactly how each employee is performing on each shift, relative to others—who sold the most drinks or desserts or got the best tips, for example. The system encourages competition among employees through a game-like leaderboard interface (see left).

But like many startups, it decided to “scrap the whole first version” of its interface, Beauregard says. At least the game-layer part of it. That was partly because of co-founder Matt Grace’s experience waiting tables for several shifts a week in a Watertown, MA, restaurant over the past few months, and using his own software as a customer. (Beauregard also has previous restaurant experience.) “Creating game layers and motivational leaderboards is extremely nuanced and a lot harder than people think,” Beauregard says. “It’s extremely difficult to make something look so simple. We’ve learned a ton.”

In the meantime, he says, the company has gotten lots of interest from restaurants and other businesses—and it is focusing exclusively on restaurants for now. “The pipeline is absolutely beyond full,” he says. “We’re in late-stage talks with chains of all sizes.”

Besides making good hires, Beauregard says, the company’s biggest challenge now is “a matter of focus.” He adds, “There’s a tipping point where you’re receiving so many e-mails, and everyone has a really well-informed opinion.” The key is taking all those disparate opinions and turning them into something productive, he says.

What’s more, the company’s product itself is very polarizing. “The people who really dislike it or rebel against it are the people that aren’t the top performers and who feel they’ve earned a certain status within the [restaurant],” Beauregard says. “That’s what we’re looking to vacate, I suppose, and it’s 5-10 percent of any given company. They’re in jeopardy of being displaced in their lucrative shifts. But that’s also what it’s really meant to do.”

Did I mention Beauregard is hungry? “There’s still a mountain to climb,” he says. “We’re creating a meritocracy through technology.”

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Another year, another MassChallenge class. The sophomore edition of the startup accelerator and $1 million business plan competition did not disappoint. Nor did the final event of the program. Tonight was the big awards gala, held at the Boston Convention & Exhibition Center in South Boston—a cavernous and sprawling, impersonal space—but it did the job.

I’ll have more on the ceremony tomorrow. But in the meantime, here’s the news from the evening:

Three of the MassChallenge finalist teams won $100,000 each. They are:

—Alkeus Pharmaceuticals, a biotech company working on new treatments for blindness

—Sanergy, a green tech company developing sanitation services for urban slums

—Tinfoil Security, a startup working on Web security software for small businesses

And 14 teams won $50,000 each:

—Artaic, a custom tile mosaic company

—ArtVenue, a marketplace that connects artists with local businesses

—Casa Couture, which makes shoes for pregnant women

—Cocomama Foods, a gluten-free food brand

—Drync, a wine search and ordering service

—EverTrue, a startup that connects schools and organizations with donors

—Her Campus Media, an online magazine and marketing firm targeting college women

—Invup, which makes a Web platform for managing volunteer and donation programs

—Lynx Sportswear, which makes better-fitting sports bras

—Resolute Marine Energy, a seawater desalination company

—SmarterShade, a window-darkening tech company

—SocMetrics, a Web startup that helps businesses engage key influencers

—Therapeutic Systems, a company developing a sensory vest for autistic kids

—UberSense, which makes video software to analyze sports techniques

Rounding out the field of 26 final startups:

—ARO Medical, which makes an implantable brace for back surgery patients

—Bioarray Therapeutics, a cancer diagnostics company

—Circumventive, a stealthy security tech startup

—Driveway, which connects drivers with auto insurance providers

—Finalta, a company specializing in software for institutional asset managers

—PK Clean, a plastic waste-to-energy company

—Privy, a Web marketing platform for local merchants

—Pintley, a beer website and app for brewers and consumers

—The Tap Lab, a mobile location-based game startup.

Congratulations to all the finalists and participants, whose journeys are really just beginning. All in all, this is becoming a pretty cool tradition for the Boston startup community. We’re looking forward to next year already…

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I don’t like playing favorites. I just really like beer. Especially after this weekend. But enough about me.

A couple of weeks ago, I got to chat with Tim Noetzel, the co-founder of Pintley, a Boston-based beer website that provides personalized recommendations, tasting notes, and a social community. Pintley is a participant in this year’s MassChallenge startup accelerator, and it is one of 26 companies in contention for $1 million in prizes (divided among several winners), to be awarded tonight at the program’s closing ceremony in South Boston.

So, apropos of nothing, I wanted to provide a quick sketch of Pintley’s story. Noetzel is a Tufts University grad who studied abroad in Germany during his junior year. Not too surprisingly, he fell in love with the beer culture there. When he came back to Boston, he started Pintley as a hobby with his childhood friend, Shannon Hicks. (They grew up together in the suburbs of Chicago.)

Pintley opened to the public in July 2010, as a site where consumers could sign up and rate beers and discover microbrews. The company has since rolled out an iPhone app and social features including a news feed and monthly prizes for people in the Pintley community who share recommendations with friends on Facebook, Twitter, and other social sites. So, as you might guess, it’s more than just a consumer app.

In fact, Pintley is trying to change “how beer is marketed and sold,” says Noetzel (and yes, he’s a home brewer). “Consumers are demanding much more variety. They want products tailored to their tastes.” He adds, “The availability of social media means the advertising game is really changing.”

The company is working with a range of businesses, from small craft brewers up through established breweries such as Great Divide and well-known companies like Samuel Adams. The idea is to help brewers reach more customers, Noetzel says, as well as put “smaller brands on more even footing with big brands.” Pintley is trying to do this by helping brewers build word-of-mouth campaigns that take “people who love your product and make them advocates,” he says.

That’s an ambitious and popular goal, of course. There are tons of other beer sites and apps out there, ranging from local search and discovery (Tap Hunter) to recommendations and social features (BrewGene) to just plain silly but entertaining (iBeer). But if Pintley can carve out its niche and build some traction, it could gain the leverage it needs to get more paying brewers involved.

Meantime, we’ll be watching to see how Pintley and the other MassChallenge finalists do tonight. (Drync, another finalist, specializes in wine search and discovery, so there’s a mini-theme here.) Truth be told, we’ll probably be knocking back a few too, along with the rest of the startup community. Good luck to all tonight.

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The 53 semi-finalists in the Accelerate Michigan Innovation Competition have been announced. The global busi­ness-plan com­pe­ti­tion tar­gets mid-to-late-stage busi­ness startups with the poten­tial to gen­er­ate an imme­di­ate impact on Michigan’s econ­omy, as well as stu­dent con­cepts with longer-term busi­ness viability. (Students can still register up until the September 30 deadline.) At stake is more than $1 mil­lion in cash win­nings, plus in-kind awards of ser­vices, staffing and software.

The semi-finalists competing for both general and sector-specific prizes are:

Advanced transportation

Current Motor

ECO-Fueling

EcoVElectric

ENRG Power Systems LLC

ParkingCarma

Alternative energy

Accio Energy

Advanced Battery Concepts

Arbor Wind

Climate Technologies Co.

Grid Logic

Metro Ag Services

NextCAT

Spider9

Defense and homeland security

Emitech, Inc.

H3D

nanoRETE

Visotek

Information technology

Are You Human

GPX Software

i3D Technologies Inc.

Practical EHR Solutions

TherapyCharts

White Pines Systems … Next Page »

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The early-stage tech accelerator business just got even more competitive.

Boulder, CO-based TechStars, which runs seed-stage mentorship programs for startups in Boulder, Boston, Seattle, and New York, announced today it has raised a new $24 million fund from a long list of investors that includes Foundry Group, IA Ventures, Avalon Ventures, DFJ Mercury, SoftBank Capital, SVB Financial Group, RRE Ventures, and Right Side Capital Management. The new money brings TechStars’ total funding to roughly $34 million (from over 75 venture capital firms and angel investors).

Here’s what’s more interesting. The new money will be used to offer each new company accepted into TechStars an additional $100,000 in the form of a convertible note. That will be effective for all 2012 programs, and is on top of the $6,000 per founder that TechStars provides in its 12-week boot camps in exchange for a 6 percent equity stake in each startup.

The $100K will help teams worry less about early fundraising and should “entice a broader spectrum of would-be entrepreneurs to consider” the program, says TechStars founder and CEO David Cohen.

I asked Cohen via e-mail about how the extra money would help TechStars compete against other incubator programs—most notably, Silicon Valley-based Y Combinator, which started offering $150K to each of its startups earlier this year.

“I don’t think the best companies really pick an accelerator based on a small amount of funding like this,” Cohen says. “I think they pick on results and reputation. Results matter. The average TechStars company raises over $1M. Seven of the first 20 have been acquired. We have some great historical data which we are transparent about and I think this matters.”

Cohen went on to stress some of his program’s merits for entrepreneurs—the focus on a small number of teams, and the wide backing from investors. “Hopefully they pick TechStars also because of our focus on quality over quantity, and based on the quality of our mentorship,” he says. “I also hope they pick TechStars because we are so widely supported, and are backed by more than 75 VCs and angels. This makes a real difference for our companies, and I don’t think anybody else offers such breadth of mentorship and investment backing. This $100k per startup offer comes from a wide variety of venture funds nationally, and we think that’s different too. Imagine having the support of so many, right out of the gate.”

So will TechStars be expanding its programs or moving into new cities anytime soon? Cohen didn’t give any specifics, but he said much of the new funding would be used “for future operations and financings.”

Lastly, I asked him about the challenge of maintaining the TechStars culture and quality of mentorship as the program continues to grow—and as the noise and redundancy among early-stage tech companies, ideas, and incubators seems to keeps growing too.

“We fund about ten companies at once, and put the full focus of our organization on them,” Cohen says. “We bring the best mentors available to the table and get them to deeply engage with these companies. We want every company we fund to be successful. We haven’t changed our focus on quality over quantity as we’ve carefully and slowly expanded. We’re the same TechStars as we’ve always been, and we just keep piling on the unfair advantages that we give the startups we fund.”

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The decision to apply to TechCrunch’s Disrupt Battlefield competition wasn’t an easy one. TalkTo had been operating in stealth. We didn’t want to launch publicly, we wanted to launch successfully.

Something changed once that application went forward. None of us knew if we’d even be selected as a finalist but we worked as if we would be. We were laser focused on what needed to happen before the public launch.

It wasn’t just the product that had to come together. It was the total experience, the feel of the brand and logo, the messaging. Making sure you can communicate well with beta users, and that their experience is delightful from start to finish. That the promise of TalkTo––the ability to text ANY local business and get a text response-–-could be realized.

We were somewhat deflated a few weeks later when we hadn’t yet heard from TechCrunch. And then we got an email—at midnight—from now editor Erick Schonfeld asking if we could answer a few questions and demonstrate the product, right away. He was keeping the same hours we were!

We connected the next morning and the demonstration went really well. I think Erick saw something special that fit the Disrupt model. We felt there was a strong chance we’d be selected. And we were.

Riley, my co-founder, and I met Erick in New York one week before the conference to rehearse. We were horrible. The product performed great but our ability to describe it was poor. Erick gave us some much needed advice.

It’s worth noting that this was a tumultuous day in Erick’s life. The drama surrounding Mike Arrington’s potential departure from AOL and TechCrunch had erupted the day before. Just as we were to meet with Erick, it wasn’t even clear if he still worked for AOL or TechCrunch! All was up in the air. Still, Erick took our meeting on time. He was spot-on with his advice. Not once did he let the drama interfere with our meeting. We walked away really impressed.

Final touches were put on the product and website, and we re-wrote our script a few more times with help from friends. The night before the big launch, we asked Erick if we could pitch him once more. Again he hated it. In fact he thought we’d gone backwards. The product could be magic, but our ability to let it shine? Not so magic.

To say we weren’t feeling great at this moment is an understatement. Over a beer … Next Page »

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In Baltimore, a “hopper” is a young, street-level drug dealer (as devotees of The Wire can tell you). In Montreal, Hopper is a young travel search company. In Boston, well, we’ll see what happens in Boston.

Hopper is announcing today an $8 million financing round led by Atlas Venture, with previous investor Brightspark Ventures also participating. The company started in Montreal in 2007 but says it is moving its headquarters to Cambridge, MA, soon. The reason?

“We’re making a big bet on the talent pool,” says co-founder and CEO Frederic Lalonde. The company is currently scouting office spaces around Kendall Square and Central Square, and is looking to hire about 15 people, mostly engineers, he says. With a local ecosystem that includes online travel companies such as Kayak, TripAdvisor, Goby, and Google/ITA Software, and “big data” firms like IBM/Netezza, HP/Vertica, and EMC, (my examples, not his), Lalonde hopes to find a “particular kind of programming geek” well-suited for Hopper’s technology challenges.

The idea behind Hopper is to take natural language travel-search queries—things like “best beaches in Spain” or “scuba diving in the Caribbean”—and return a list of places, as well as flight and hotel options for each place, ranked according to measures of quality, convenience, and cost. It’s a more open-ended, “discovery” type of search than what has become standard on itinerary comparison sites like Kayak, Bing Travel, Orbitz, and newer sites like Hipmunk, InsideTrip, WaySavvy, and Yapta.

In other words, if you’re looking for a flight from A to B (and a hotel to stay in), there are plenty of other sites to help you do that. “Travel is a complex discovery process,” says Lalonde. “We’re working on the depth, quality, and intelligence of the search.”

He certainly knows the sector. Lalonde and co-founder Joost Ouwerkerk came from travel firm Expedia (NASDAQ: EXPE), which bought Lalonde’s previous company, Newtrade Technologies, in 2002. Together with co-founder Sebastien Rainville, the Hopper team plans to move to Boston, but they aren’t saying exactly when yet. They will also keep some operations in Montreal—notably the technical infrastructure and servers that crunch the firm’s travel data—because it’s much cheaper to do it there, Lalonde says.

Here’s a little more about how Hopper works. Say you type in “scuba diving Caribbean.” The site will access a “giant statistical grid of user information” that takes into account all mentions of relevant scuba spots—from articles, blogs, forums, reviews, social media, and so forth—and returns a list that’s ranked according to those mentions, but also things like distance, flight costs, and time of year, Lalonde says. The goal is to do all of that in less than a second, he says.

The whole approach requires some serious computing power. Hopper’s database includes … Next Page »

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A bit of chest-thumping kicked off last night’s NY Tech Meetup, a large gathering of startups grown in New York. Deputy Mayor for Economic Development Robert K. Steel took the stage with Seth Pinsky, president of the New York Economic Development Corp., at the onset to push Applied Sciences NYC—a plan to build up the ranks of local technology talent in order to outdo other cities with burgeoning startup communities.

New York seems to think it can snatch the thunder from hubs such as Boston by creating more local technology education opportunities. Steel said after the economic crisis exploded in 2008, the city asked local leaders in academia and venture capital what was needed to better prepare New York for future economic growth. “The resounding voice back was that we were deficient in strong skills in science and engineering,” he said.

Steel said the city wants to leverage its post-secondary schools—including universities, commuter and community colleges—to grow a larger crop of technology professionals to fill that void. “When people talk about college towns, they talk about Ann Arbor or Cambridge or Boston. The facts are New York City has more college students than Boston has people,” he said. “So I think it’s very clear when we call out the bragging rights on where we’re going to have innovation happen, that New York’s going to be the place.”

Steel said responses to a request for proposals are due this fall for the Applied Sciences NYC plan to expand or build an applied sciences and engineering campus in the city. He said the initiative is open to local as well as out-of-town post-secondary schools.

Pinsky said New York is gaining on its rival hubs as a place for private investment in new technology, but more work needs to be done. “In the last couple of years, for the first time in our history, we surpassed … Next Page »

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The deadline is quickly approaching for those who wish to enter the Accelerate Michigan Innovation Competition. Applications must be completed by Aug. 10 for companies and Sept. 30 for students. The awards will be announced Nov. 17 at the Henry Ford Museum in Dearborn.

The Accel­er­ate Michi­gan Inno­va­tion Com­pe­ti­tion is a global busi­ness plan com­pe­ti­tion high­lighting Michi­gan’s entrepreneurial ecosystem fostering inno­va­tion and busi­ness oppor­tu­nities. It tar­gets mid-to-late-stage busi­ness start-ups with the poten­tial to gen­er­ate an imme­di­ate impact on Michigan’s econ­omy, as well as stu­dent con­cepts with longer-term busi­ness viability. At stake is more than $1 mil­lion in cash win­nings, plus in-kind awards of ser­vices, staffing and soft­ware.

To apply, click over to the Accelerate Michigan website.

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Attention, techies. Want a deep dive into the future of the Web, search, and online services? Then sit down with Qi Lu, the president of Microsoft’s online services division, if you ever get an opportunity.

In the meantime, you can check out this video from Lu’s talk at Microsoft New England Research & Development Center in Kendall Square, Cambridge, MA, back in May. Microsoft organized the event in partnership with Xconomy, and we all had a blast talking with Lu and listening to his insights.

Lu was personally recruited by Microsoft CEO Steve Ballmer in late 2008, after spending a decade at Yahoo. He was brought in to revitalize Microsoft’s online efforts in search and advertising (including Bing), Web software, services, and infrastructure.

In his talk, Lu laid out what Microsoft (NASDAQ: MSFT) is currently working on in the area of Web software and services, and how it all fits into the landscape of big trends like social media, daily deals, and mobile apps.

“The question for all of us is, what’s the structure of that new Web? What are the things that connect all those apps together? That’s where we see a great opportunity for Microsoft to take a leadership role,” Lu said.

“The Web has far outgrown its intellectual heritage. It’s a digital society. We need a richer, better way to navigate the Web, discover, and interact in a lot more compelling manner,” he continued.

You can also read about Lu’s thoughts on Microsoft’s recent $8.5 billion acquisition of Skype, as well as my writeup of some takeaways from Lu’s talk, which also includes an in-depth Q&A he did with Xconomy about Microsoft’s Web strategy. Some of the highlights include how search is a gateway to other online services, how Microsoft is positioning itself with respect to Facebook, Apple, Groupon, and (of course) Google, and how the company’s pace of innovation is crucial to its future.

Check out the video below for some highlights from Lu’s talk at Microsoft NERD.

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I recently had the pleasure of taking a two week academic trip to China with Babson’s MBA program, where several dozen of my classmates and I were led through Beijing, Dalian, and Shanghai by the inimitable Robert Eng. During the course of the journey, our group visited with government officials, leaders from state-owned enterprises, and a number of businesses operated by domestic and foreign owners. While there are many interesting and non-trivial idiosyncrasies of doing business in China, such as the need for government contacts, I thought it would be more informative to share some of the broader business trends that became clear during the course of our visit.

First, China is beginning to capture more of the value chain. As the world’s third largest manufacturer, China has developed a solid reputation as a nation that builds products for Western companies to attach their brands. Apple is one of the most famous examples of this. Perhaps more surprisingly, Nike and Reebok both have their shoes manufactured in the same facility. Li Ning, China’s leading sports apparel maker and the number four sports apparel company in the world, also has its shoes made there. If you’ve heard of Li Ning, you’re ahead of the curve. If not, you probably will soon. Li Ning has begun opening stores in the United States and other countries overseas. In the U.S., it decided to launch its pilot store in Portland, OR, which seems like an odd choice until you realize that it’s right in Nike’s backyard. It’s a bold statement from a bold company and serves an appropriate example for the changing mentality of Chinese business; no longer content with the margins available to them making things for others to sell, the Chinese are now looking for ways to move up the value chain and capture the margins commanded by being a globally recognized brand.

Second, China is starting to look inward for markets. While the rest of the world is still staggering from financial crisis to financial crisis, China’s chugging along at a brisk 9 percent annual growth rate. Shanghai has joined the list of top tier metropolises, on par with London and Moscow, complete with a Starbucks and a McDonald’s around every corner. Shopping malls are awash in luxury brands. With that kind of affluence at home comes increased spending power, and Chinese companies are beginning to recognize the potential of the domestic market. (By Chinese companies, I also mean the Chinese government. State-owned enterprises still command roughly half of the country’s industrial assets, and the government has tentacles in just about every successful business in the country, private ownership or no.) As evidence of this, the 12th Five Year Plan explicitly discusses the yawning trade imbalance that China has created with the U.S. and other nations, and proposes to address this dependence on foreign consumption by directing more goods to the domestic market. It’s uncertain what the government will do about Chinese households’ astronomical savings rate.

Third, national stability is not a guarantee. Incidents of social unrest have been growing more frequent in the past couple years. Chaffed by a widening wealth disparity and the trampling approach to development, Chinese citizens are expressing their dissatisfaction in a way that makes government officials and many members of the business community nervous. Restrictions on freedom of speech and the flow of capital have done a great deal to boost the Communist Party agenda of security and growth, but they’ve also created an economic and social pressure cooker. The 12th Five Year Plan seeks to address these concerns by explaining how the government plans to handle rising inflation and housing costs (regulatory controls), the income gap (higher taxes for the rich), and the blistering pace of development (cleaner environmental standards and lower growth targets). Perhaps more revealing, social stability was a concern voiced by several businessmen we visited during the trip. One Chinese business leader who spoke to our delegation put it especially elegantly: “China will continue to grow as long as the Communist Party is in power. The Communist Party will stay in power as long as China continues to grow.”

The state of Chinese development offers an interesting puzzle: free market incentives bounded by strict financial and political controls. The tremendous opportunities of doing business there are matched by equally tremendous challenges. From this point in history, it almost seems possible that Communist China will continue growing in perpetuity, achieving global dominance in our lifetimes. Or the entire system could collapse spectacularly, and we will ask each other why we didn’t see it coming. 

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Big Blue celebrated 100 years of success in the tech industry earlier this month. It’s a rare feat in an industry where companies are often rendered obsolete in a decade, oftentimes sooner. In fact, IBM has managed to stay relevant while literally thousands of tech companies have come and gone. So, what’s its secret recipe? One reason for its success is its aggressive attitude toward buying companies with great technology that integrate well into its portfolio.

As an ERP (enterprise resource planning) market analyst at Software Advice, I was intrigued by all the fanfare that’s been showered upon IBM this month. I also wanted to know more about its mergers and acquisitions strategy and which companies it might buy next. So, to predict the future, I rolled up my sleeves and went digging into the past. Since IBM is an acquisition machine, I limited my search to the last decade of deals.

After I culled the data, it became obvious that there are three markets that IBM likes to go shopping: professional services, middleware, and business analytics. For anyone familiar with IBM’s company profile, this isn’t really a shocker, but the sheer volume of purchases is surprising. In the past decade, IBM bought 14 companies in services, 13 companies in middleware, and made a couple of multi-billion-dollar deals in business analytics.

The Massachusetts Connection

There’s one more trend that I noticed in its purchasing history: IBM loves to buy companies in Massachusetts. Since 2003, it has picked up some 18 companies in the Massachusetts area (these 17 plus Netezza). Massachusetts is an obvious place to shop, with world-class tech universities; it’s a hotbed of technology innovation; and there are dozens of successful companies. In thinking about the Massachusetts connection, there is one company in particular that I couldn’t help but think about IBM buying: EMC.

EMC is the Holy Grail of Massachusetts technology. Its data storage and warehousing business is a multi-billion-dollar operation, and it has one of the most successful virtualization companies on the market (VMware). IBM is already involved in data storage—and is a competitor of EMC—but it has yet to make an aggressive move into the virtualization market. An IBM-EMC combination would create an utterly dominant force in the data storage industry.

IBM’s strategy in the virtualization market has been to play it safe on the sidelines and funnel money and support into things like the Linux KVM hypervisor, hoping that it could compete with VMware. It hasn’t worked. Instead VMware has become the go-to name for all things related to virtualization technology. But that’s exactly what makes buying EMC such an enticing proposition.

Would IBM Buy EMC?

So, what would IBM have to give up? The short answer is: a heckuva lot. IBM’s market cap hovers right at $207 billion, and EMC’s sits at a comparatively modest $55 billion. That means that IBM would have to give up about 20 percent of its company and then some to land EMC. It’s a massive sum of money, but IBM is one of the tech companies that can actually pull off an EMC purchase. While it’s a huge investment, there are massive revenues to realize from a deal of this magnitude. In 2010, EMC brought in $17 billion. If you throw in IBM’s scale on top of that, there’s no telling what kind of revenue they could do together after a deal.

Personally, I think IBM could make it happen. But the move may be a bit too bold for a company that prides itself on focus and on being fairly conservative. On top of that, IBM has already said that it intends to spend “only” $20 billion on mergers and acquisitions in the next five years. An EMC purchase would tear through that and then some. In some respects, however, it’s a deal that might be too good, and pricey, to make happen.

But that’s just my opinion. What’s yours? I’m currently hosting a poll on my blog at Software Advice. Come vote and make your voice heard at: IBM Mergers & Acquisitions: Who’s Next? For reference, EMC is currently in third place. I look forward to hearing from you.

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These are two startups that aren’t household names in the Boston-area tech scene, but probably should be. One started in 2009, raised venture capital when it was tough to get in the downturn, and is currently adding new features and generating some buzz. The other started five years earlier, in 2004, bootstrapped itself to profitability, and counts among its customers the world’s largest retailer and the world’s largest bank.

One has a geeky, conceptual name that sounds like a small, green Jedi master. The other’s name is more literal and sounds like a Sith lord, if I had to pick a side. (You tell me which is more badass.)

Yottaa and SiteSpect are united by at least one common thread: the desire to make websites run faster. Though the companies are at different stages and have different challenges, they are competitive in the realm of Web performance optimization—software that recodes webpage content to streamline it for browsers. “It’s like scraping barnacles off a boat,” says Eric Hansen, founder and CEO of Boston-based SiteSpect, the elder company.

It’s also a relatively recent product direction for SiteSpect, which has built much of its core business on marketing technologies like A/B testing of website features, behavioral targeting, and mobile content optimization (e.g., iPhone vs. iPad). According to Hansen, who previously founded and ran Worldmachine Technologies, his current company is the only provider of this kind of software that doesn’t require page tags or changes to customers’ existing sites. Its customers include Walmart, Expedia, MTV, MSNBC, Staples, and CSN Stores.

Meanwhile, Cambridge, MA-based Yottaa started just two years ago with the idea of making “every website faster and better,” says founder and CEO Coach Wei, who previously founded Nexaweb Technologies and worked at Hopkinton, MA-based EMC (NYSE: EMC). Yottaa’s customers include mid-sized e-commerce and retail sites (e.g., CSN Stores again), sandwich shops, and Web marketing agencies. All want to monitor and improve the speed of their sites—and track the resulting impact on sales, conversions, and other business metrics.

My first thought was, hasn’t this problem been solved (like in 1999, or 2005)? Apparently the answer is no, if there are at least two companies going after it in Boston. Oh yeah, and last fall, Google’s team in Cambridge also released a free tool for webpage optimization, called mod_pagespeed. So it’s clearly a competitive and somewhat commoditized sector. (In case you’re wondering, companies like Cambridge, MA-based Akamai Technologies (NASDAQ: AKAM) tackle Web performance at the network level, whereas the newer companies focus on the browser level.)

SiteSpect sees its primary competition coming from Adobe (NASDAQ: ADBE) … Next Page »

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Commencement season is coming to a close, which means a lot of students and recent graduates are leaving town. That might be a good thing if you’re trying to get a seat at Crema Café near Harvard or Flour Bakery near MIT, but it ain’t good for local startups.

The brain drain of Boston-area tech grads leaving for the West Coast is well-worn territory. Talented developers, fresh out of school, are taking high-paying jobs with big companies like Google, Amazon, Facebook, Apple, Microsoft, and Groupon, none of which are headquartered in Boston. Ambitious young entrepreneurs move to Silicon Valley to seek their fortunes—and are sometimes encouraged by their faculty mentors to do so. How can the local innovation community turn things around?

Cultivating local talent is, in fact, one of the main topics being covered at today’s “Building a Better Commonwealth” forum, organized by the Boston Globe.

A trio of leaders I’ve spoken with recently have also added their perspectives to the conversation. Each of them is tackling the startup brain-drain issue from a different angle. Yet they all agree local universities are the place to start, as the quality (and sheer number) of schools represents a competitive advantage for the Boston area over other parts of the country.

Jon Pierce is an unassuming guy who is trying to lead a grass-roots revolution—in angel investing. The techie/hacker/entrepreneur is organizing the second annual “Angel Bootcamp” in Cambridge next Tuesday, June 14. The goal is to get angel investors excited about pouring their hard-earned dollars back into the local startup community. Yet Pierce recognizes that the talent and idea spring lies further upstream, especially in the fields of consumer Web and mobile technologies.

Pierce says universities “are our best chance of improving things quickly.” That means finding new ways to harness the entrepreneurial talents of students and faculty; building stronger ties between schools and local tech companies; and encouraging students to do internships (and seek jobs) at Boston-area startups. “Working at a startup is the best education you can have as an entrepreneur,” he says.

Of course, all these things are already happening at local schools. But Gordon Jones, the inaugural director of the Harvard Innovation Lab, slated to open this fall, represents a new effort to ratchet up the intensity of collaborations on campus. It may be unspoken, but the big idea behind the i-lab is to keep the next Mark Zuckerberg (Facebook), Bill Gates (Microsoft), or Tony Hsieh (Zappos) from leaving town.

“The promise is to be a home for entrepreneurs at Harvard,” Jones told me last month.

Which brings us to perhaps the most ambitious talent-building and entrepreneurship program in Boston today. MassChallenge, a nonprofit incubator in its second year, aims to run “the world’s largest startup competition” and prove that in Massachusetts, “you can make a startup machine that just produces startups,” says John Harthorne, who leads MassChallenge as CEO. (The program recently announced its 125 finalist companies, which have entered a summer mentorship program and will compete for substantial cash prizes in the fall.)

I asked Harthorne about the role of local colleges in fostering transformative new business ideas—and keeping them local, instead of encouraging them to skip town. “Universities are clearly the foundation of innovation for Massachusetts,” he says. In part through MassChallenge’s progress in attracting attention and resources, he says, “We’ve raised Boston and Massachusetts in the ranks of options. We’re in the top three [of places to recommend building a company] across all the professors and schools. It gives us an at-bat. We’ve demonstrated an incredibly collaborative environment.”

Harthorne was talking mostly about the MassChallenge program, but his comments might just as well apply to Boston’s broader ecosystem, especially for those coming out of school: “We’ve never been this well-positioned,” he says. “All the lights are green.”

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Last year, the organizers of TechStars in Boulder, CO, decided to try a little experiment. Already stocked with 10 teams of entrepreneurs working on their proto-companies, the startup boot-camp saw a niche for extra hands to help knock out some of the startups’ technical projects.

So David Cohen, TechStars’ founder and CEO, brought in a young software developer and aspiring entrepreneur named Sam Herbert, who had applied to TechStars but didn’t make the cut for that year’s class. The TechStars brass gave Herbert a small stipend and let him circulate through the system, to see what kind of work might be available.If it works out, they figured, he could even wind up working for one of the companies.

“Two weeks into the program, he was recruited by one of the teams,” says Nicole Glaros, managing director of TechStars Boulder. “That’s when we were like, ‘Hmm … maybe this has a little bit more legs than we thought.’”

For Herbert, that open-ended engineering gig turned into a co-founder’s position with ADstruc, a venture-backed New York City-based outdoor advertising startup. “The last thing I thought would happen was I would be living in New York a year [later],” Herbert says. “But man, I’m so glad that happened. It’s been an adventure, and I just hope it keeps on going.”

And for TechStars, the experiment became HackStars—a recruiting program that puts entrepreneurial techies into a talent pool to help the accelerator’s fledgling companies tackle their projects, and maybe even land a new job.

The HackStars program, already in place at TechStars in New York and Boulder, is now making its debut in Seattle, where TechStars recently closed applications for a second class of entrepreneurs. Developers and designers in HackStars get the same $6,000 per-person stipend given to the co-founders of hosted startups. But they also get a chance to try the startup life even if they don’t have their own idea or team. As Seattle TechStars director Andy Sack wrote on his blog, it amounts to a way for techies to “hack into TechStars.”

Of course, software jockeys of all types are in high demand these days, both nationally and here in Seattle. We’ve talked about this situation many times at Xconomy, examining the relatively low rate of in-state college degrees, the continued growth of local tech behemoths and startups, and the many Bay Area companies establishing Seattle-area footprints to lure away talent from Microsoft, Amazon, and others.

The labor market for technical talent is also hot in Boulder, Glaros says. So why would an engineer give up nearly sure-fire job prospects for a few grand and three months of long hours with no … Next Page »

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OK, let’s cut to the chase here. We’re looking for The One. One more cool, young startup that could change the world. We’ve got 11 confirmed. We want an even dozen. Do you have what it takes?

The setting: It’s our third annual flagship conference, XSITE, at Babson College on June 16, and the startup “Xpo” goes from 4:00-5:00 pm. The format: Three-minute pitches from our lineup of dynamic entrepreneurs, emceed by Katie Rae of TechStars and Project 11 Ventures. What’s at stake: Exposure to our audience of several hundred investors, executives, entrepreneurs, students, faculty, and service providers; some nice prizes for audience favorites (more on that soon); and beer, lots of beer.

Here are the criteria (which, admittedly, are quite broad):

—Early-stage startup in information technology, healthcare/biotech, or cleantech/energy.
—Potentially transformative in its industry.
—Dynamic founder who will light up the room.
—Hasn’t taken much outside funding yet (seed round or small Series A at most).
—Hasn’t been written up extensively in the media (except Xconomy and maybe one or two others), and hasn’t demoed at a major conference yet.

Given the short notice, this will probably be a New England-based company/entrepreneur. But heck, if you can get here from Seattle, San Francisco, Wichita, Moscow, or Beijing, we want to hear from you too; this is a wild-card entry, after all.

If this sounds like you, drop us a note at editors@xconomy.com or write me personally at gthuang@xconomy.com, and tell us about your company and why you want to present at XSITE. If you make our Top 5 list, we will provide a free pass to the whole conference. (And even if you think we already know you, you should write in, because in all the excitement we might have temporarily forgotten.)

Here are the 11 startups confirmed for the Xpo so far (most are based in Boston or New England), so you can see how the competition stacks up:

—Altaeros Energies (Alain Goubau)
High-altitude wind turbine. Yes, we’re talking about a tethered, helium-filled blimp that hangs out at 2,000 feet.

—CoolChip Technologies (William Sanchez)
Air-based heat sink for cooling CPUs, servers, and data centers in an efficient way.

—Ginger.io (Karan Singh)
Health and wellness monitoring via mobile phones, to help people analyze and visualize trends in their behavior.

—OsComp Systems (Pedro Santos or Jeremy Pitts)
A new kind of compressor to make natural gas cheaper and more efficient.

—PoKos (Timo Platt)
Point-and-chat social networking. As my colleague Erin puts it: Yes, that stranger across the bar can text you. No, it’s not as scary as it sounds.

—Proper Cloth (Seph Skerritt)
Online customized dress shirts for men. Based in New York City.

—REBIScan (Justin Shaka)
Handheld vision scanner to detect amblyopia or “lazy eye,” the leading cause of preventable blindness in children.

—Smarterer (Jennifer Fremont-Smith)
Online skills testing for jobseekers, recruiters, and human resources.

—STELLAService (Jordy Leiser)
Third-party rating service for online retailers. Based in New York City.

—Strohl Medical (Heather Keith)
Portable stroke detection device for emergency room doctors.

—WaySavvy (Michael Raybman)
Online travel site trying to make it incredibly easy to book a trip.

So let us know if you are a young, exciting startup and want in on the Xpo. We’re looking forward to seeing you all on the 16th.

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