War really is going out of style.

At least that’s what Joshua Goldstein, professor emeritus of international relations at American University, and Steven Pinker, a psychology professor at Harvard wrote in a New York Times op-ed piece last month.

Throughout the editorial, Goldstein and Pinker dissect the meaning of “war” today, its various categorizations, and the reasoning behind their sentiment that war has become passé. Among other rationales, the piece cites a lack of monetary gain as a key contributor, as the financial cost of war overshadows any acceptable gain:

“For centuries, wars reallocated huge territories, as empires were agglomerated or dismantled and states wiped off the map. But since shortly after World War II, virtually no borders have changed by force, and no member of the United Nations has disappeared through conquest.”

But is war really going out of style, or is the way it’s fought being changed?

As I wrote in a recent Threat Geek post, war is being redefined, not replaced. The battle for land in previous times has now translated into a fight over intellectual property, with nation states attempting to steal from each other using advanced, targeted cyber attacks. It’s not that war is passé, it’s that the landscape has changed. Land is no longer the primary motivator in global conflict, as the value of intellectual property has become, in many ways, priceless—just think of what China would pay for Pfizer’s next groundbreaking drug before it hits the open market.

Instead of bullets on battlefields, wars are being fought with keyboards over networks at a fraction of the price.

And it makes sense, doesn’t it? Why risk billions of dollars engaging in combat with a nation when you could steal their most valuable assets with the click of a mouse? Why thrust your country into global negative light, when you could be a faceless enemy attacking from thousands of miles away?

The perception that the United States has not been attacked by a foreign government since Pearl Harbor is false. Thousands of times each day, nation states like China and Russia are engaging in cyber warfare, trying to deploy advanced persistent threats (APTs) over American networks to gain access to our most crucial information. The United States has always been upfront in flexing its military muscle as a deterrent against potential threats, but when it comes to our capabilities in a cyber war, we have been secretive.

Maybe that’s about to change.

Recently, four-star General James Cartwright (a retired vice chairman of the Joint Chiefs of Staff) went on record as saying the United States needs to be more upfront about its cyber capabilities.

“You can’t have something that’s a secret be a deterrent. Because if you don’t know it’s there, it doesn’t scare you,” said General Cartwright.

It’s hard to argue with his logic of letting the world know of our offensive capabilities or employing a strong defense as a way to defeat cyber attacks. If a country is going to take a shot at U.S. interests, they are going to get hit back. Hard.

This is where Fidelis Security Systems and several other security companies can help to deal with these types of advanced persistent threats on a daily basis. In a way, network security companies are becoming the defense contractors of the future. What Raytheon and Lockheed-Martin were to the aerospace industry throughout the 1980s, has now been transferred to our shoulders. We can’t win the war for you, but we can equip you with the best weapons to help fight in the cyber war.

General Cartwright estimated that it could probably take hackers two to five years before they had access to disable a large percentage of the banking industry or the U.S. electrical grid. Even a smaller attack could undermine confidence in financial markets. It would appear to me that these threats are cyberspace’s version of the Cuban missile crisis.

Doesn’t sound like war is going anywhere, does it?

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In Forbes magazine’s annual piece about America’s most dangerous cities, published in October, the article leads with an anecdote from Detroit. Detroit has been a mainstay on such lists for decades, and last year, it led the nation in violent crimes with with 345 murders and 1,111 violent crimes reported per 100,000 residents.

According to the Detroit Police Department’s website, 327 murders have been committed as of Dec. 11, a 12 percent increase over 2010, which means we’re on pace to have another exceptionally violent year. (Interestingly, though Forbes put the 2010 murder total at 345 using data from a combination of sources, including the FBI, Detroit police put the 2010 murder total at 292. Given that the department has been under a federal consent decree since 2000 due to concerns over its use of excessive force and arrest and detention practices, I’m inclined to go with the bigger number.)

What gets lost in Detroit’s raw crime statistics are the innovative, tech-heavy, crime-fighting efforts of the Wayne State University Police Department—efforts that are now beginning to pay off. Along with installing cameras and using CompStat data to constantly refine deployment to ever-shifting crime hot spots, the department has embarked on an ambitious crime-mapping project with the university’s Center for Urban Studies.

WSUPD Chief Anthony Holt has also made it a priority to heavily engage his department with local business owners and security officers from all the major institutions in his jurisdiction, including the Detroit Institute of Arts, the Detroit Medical Center, Henry Ford Hospital, and the Detroit Public Library.

In a city where the police department at large is viewed as underfunded and overburdened at best and hopelessly inept at worst, Chief Holt’s strategy shows what’s possible in Detroit when cooperation and accurate data meet good old-fashioned community policing.

“All of these activities have resulted in a major reduction in crime,” Holt said. “Crime overall in Midtown is down 15 to 25 percent, break-ins are down 29 percent, and … Next Page »

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University of Washington professor Shwetak Patel, best known for his work on developing sensor networks that can be used to monitor power use in buildings, has been named a MacArthur Fellow—the award commonly known as the “genius grant,” which comes with a $500,000 cash prize that recipients can use however they want.

Patel, 29, is well-known around the Pacific Northwest innovation community as a researcher, teacher, and entrepreneur—last year, his company Zensi was purchased by Belkin for undisclosed terms. Now, a lot more folks are going to learn about his work.

There’s a bit of theater involved in the MacArthur Fellow awards. Winners are nominated without their knowledge by someone who is asked to serve as one of the award’s rotating board of nominators. If all goes as planned, winners don’t know they’re even up for consideration until someone from the foundation calls to deliver the news. (Patel was nominated by Henry Levy, chairman of the UW’s computer science and engineering department.) The money is paid out quarterly over five years.

In July, Patel was also named a Microsoft Research Faculty Fellow, after being nominated by the university. That honor noted that Patel’s sensor research was being used not just for energy efficiency, but also in “elder care, home safety, and the creation of new approaches for natural user interfaces.”

Patel was traveling as the awards were announced and couldn’t be reached for any comment. Ed Lazowska, the UW’s Bill and Melinda Gates chairman of computer science and engineering, called Patel “an incredibly creative young person” and “the sweetest guy in the world.” Patel works jointly for the computer science and electrical engineering departments, and leads the school’s Ubiquitous Computing Lab.

“The ‘sustainability sensing’ that Shwetak is doing will have huge impact. You can determine exactly how much power each device in your home is consuming, from a single inexpensive device that you plug into any wall outlet,” Lazowska wrote in an email tonight. “He also has extremely low power sensors whose batteries can last for decades—you can toss a few under your refrigerator and it alerts you if your ice maker starts leaking on your hardwood floor, before damage is done.”

As Jeremy Jaech recently wrote in an Xconomy guest column, “Patel’s sensors are hidden inside a wall or under a water heater to detect and alert a homeowner, or an insurance company, when a sensor detects water leaks, fire or carbon monoxide. These sensors will be able to save the lives of many homeowners, and save insurers hundreds of millions of dollars; water damage claims now surpass fire claims and natural disasters and are very expensive to settle.”

This is the second MacArthur Fellow connected to the UW’s computer science and engineering department—Lazowska notes that Yoky Matsuoka was named a fellow in 2007 for her work in neurorobotics.

Here’s a video from the MacArthur Foundation about Patel, which is from this profile page about him.

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Whether you’re part of the Boston-Cambridge technology community, or just an interested observer, you’ve probably been to the Microsoft New England Research and Development Center (known affectionately as NERD) at least a few times in the past year. But do you know what Microsoft is actually working on there? I didn’t.

Until last week, that is, when I visited Microsoft Research New England, one of the main groups at NERD, housed near Kendall Square. The tower at One Memorial Drive rises majestically from the banks of the Charles River, but it guards its secrets closely. Jennifer Chayes, the managing director of Microsoft Research New England, which occupies the 12th floor, reveals the projects her group is working on slowly. But she does reveal them.

OK, it’s an open research lab with hundreds of visitors and collaborators from academia and industry, so secrecy isn’t the culture here—at least, not amongst the research community. But from the lab’s opening in 2008 until now, Chayes, an expert in discrete mathematics, networks, and game theory, has said very little to the technology and business media about what her teams have been working on—and what it all has to do with Microsoft’s (NASDAQ: MSFT) business. And that’s just fine, because I’m about to tell you.

Microsoft Research New England is three years old this month. Although the full-time research staff has doubled in size since inception, it’s still a fairly small operation—12 staff researchers (including deputy managing director Christian Borgs), another dozen postdocs, a half-dozen software development engineers and support staff, and any number of students and interns. Their research breaks down into six main areas—computer science (including algorithms, cryptography, machine learning and vision, and security), computational biology, economics, mathematics, networks, and social media. (Microsoft declined to say how much it has invested in the lab so far.)

It’s not a typical lineup for a Microsoft research lab, of which there are six worldwide, including the mother lab in Redmond, WA. “Our lab has gone into certain areas that haven’t been nearly as emphasized by the other [Microsoft Research labs]. Most of them are fantastically strong in mainstream computer science disciplines,” Chayes says. “One of the reasons for opening the lab here was because we wanted to help advance the state of the art at the boundaries between computer science and other fields. And Cambridge is a place—of course it’s very strong in computer science—that’s phenomenally strong in other fields.”

Take empirical economics. Susan Athey, the renowned Harvard economist (and Microsoft consultant), heads up a year-old group in the lab that’s focused on analyzing huge datasets that Microsoft has access to—things like online advertising trends and performance, search-engine user behaviors, Xbox Live networks, e-mail and instant-messaging patterns, healthcare trends, and so on. Chayes pitched the idea for the economics group to CEO Steve Ballmer in December 2009, and he said to go for it.

The group’s goal is to find patterns in databases that could make various systems more efficient. Little did they know this would lead to the lab’s first technology to become a Microsoft product. … Next Page »

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Infineta Systems of San Jose, CA, said today it has closed a $15 million Series B funding round led by new investor Rembrandt Venture Partners. Existing investors Alloy Ventures and North Bridge Venture Partners also took part. Infineta makes switches that facilitate the movement of data within and between data centers; it has now raised $30 million all told.

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San Diego-based Proximetry, which I profiled last summer, today named Andres Carvello as executive vice president and chief strategy officer. In its statement today, Proximetry says Carvello was previously the chief information officer at Austin Energy and chief architect of the first fully deployed smart grid in the United States. He will be responsible for setting Proximetry’s technology strategy in electricity, oil and gas markets, public safety, telecommunications, and transportation industries.

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This deal is all about combining Internet optimization and WAN optimization to accelerate enterprise adoption of hybrid cloud networks. Got that?

Let’s try to deconstruct this considerable jargon. Cambridge, MA-based Akamai Technologies (NASDAQ: AKAM) and San Francisco-based Riverbed Technology (NASDAQ: RVBD), two big players in IT performance management, are announcing today a unique strategic alliance. The companies are collaborating on a new product—due out in early 2012—that involves Akamai’s software running on Riverbed’s “Steelhead” networking appliance (for corporate wide area networks) and Riverbed’s software running on Akamai’s servers. Financial terms of the partnership weren’t disclosed.

The point of the collaboration is to get the right networking software running physically close to cloud providers (like Amazon, Rackspace, Microsoft, or AT&T) all over the world—and to do it for different data types (text, video, and so forth). The bottom line is Akamai and Riverbed are trying to help customers and corporations run their applications, online and over their corporate networks, in a faster and more seamless way than what’s currently available.

“Nobody else can do this now,” says Neil Cohen, senior director of product marketing at Akamai.

People often make a distinction between a “public” cloud, like Amazon Web Services (pay-as-you-go data storage and computing power) for startups, and “private” clouds, which use hardware and software from the likes of IBM, Cisco, and VMware to work with data behind a firewall. Yet, in reality, customers may have to use a hybrid system of public and private clouds on a regular basis.

The Akamai-Riverbed partnership suggests just how blurry the line between public and private clouds is becoming. Akamai’s software for making data transfer efficient over the Internet, combined with Riverbed’s equivalent software for wide area networks inside companies, is intended to help business users access files, run applications, and do whatever else they need to do in a speedy way, regardless of whether their data is on a private network or in a public cloud.

Meanwhile, other cloud-computing tech companies like VMware, Amazon, and Microsoft are creating “enabling technologies, but they don’t solve the performance problem,” Cohen says. “The end user experience is key.”

To that end, Akamai is known for its content delivery networks—servers and software that route Web content to people’s computers swiftly and reliably. But almost 60 percent of Akamai’s revenue in its most recent quarter came from what it calls “value-added services,” such as advertising decisions and application performance (on top of the content delivery). Today’s partnership with Riverbed is further evidence that Akamai is evolving toward a broader model of helping businesses access data and run applications over any cloud network.

“This is different,” Cohen says. “We want to get the market thinking about understanding that enterprises now have control over what used to be uncontrolled.”

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Anybody concerned with the future of entrepreneurship in the Seattle area would have been buoyed by the enthusiasm at the University of Washington‘s annual business plan competition last week on the waterfront. Nearly 40 teams were whittled down to a “sweet 16″ by a horde of judges, but I picked out five that caught my eye while winding through the hive of activity.

Check out my story for the debrief, which covers some interesting little startups—everything from smartphone-driven kit robots to small wind turbines that look like insect wings. Not all of the companies I highlighted moved on to the competition’s next round, but I don’t think we’ve necessarily seen the last of them.

Also making tech news in the past week or so on Xconomy:

—We dove into the venture and angel investment deals for March, and found a pretty large haul for companies: About $53 million in equity financing, spread across several sectors. I was struck by the prominence of two fairly hardcore tech plays at the top of the monthly list. Vancouver, WA-based nLight Photonics had the biggest single financing, worth $11 million. And coming in third on the list was $6.9 million for Physware, which makes software for designing computing infrastructure.

—Showing once again that big money doesn’t just flow to trendy consumer Internet startups, Seattle’s ExtraHop Networks reeled in another $14 million financing round. The company has been around since 2007, and was founded by a pair of alums from Seattle’s F5 Networks. You can read this longer piece for more detailed explanations of what the company does, but in a nutshell, ExtraHop software helps businesses manage their IT infrastructure more efficiently.

—Seattle’s PopCap Games continued its march toward an IPO with the purchase of ZipZapPlay, a San Francisco-based social gaming company. The acquisition gives PopCap, which makes “Bejeweled” and “Plants vs. Zombies,” a social-game outpost in the Bay Area. As Xconomy’s Greg Huang noted, PopCap has been making a big push toward taking its games to social platforms, particularly Facebook—an interesting move that puts it into a bit of a horserace with Zynga, the red-hot maker of “Farmville” and other Facebook-based games.

—We had a pair of strong guest op-eds, including an open letter from Sparkbuy CEO Dan Shapiro, who dug into the recent news that TechCrunch founder (and part-time Seattle resident) Michael Arrington was throwing off his previous ethical constraints and investing in tech startups again. Shapiro says that’s a bad idea—and that’s speaking as a product guy, not a tweed-jacketed media critic.

—Our other guest column, from Taft Kortus of Moss Adams, explored the landscape ahead for merger and acquisition deals, and how the possible heating up of the IPO market could affect the environment. One of Kortus’ more interesting points was that investors might be able to wring some valuable intellectual property or talent out of the large companies that have been on acquisition binges lately, since not all of the startups that get gobbled up wind up finding a fulfilling new life inside the machine.

—Finally, a bit of media news—even if it’s about a competitor. Rebecca Lovell, the well-connected executive director of the Northwest Entrepreneur Network, is leaving that gig after just over two years to take a business operations job with startup tech-news site GeekWire. It’s an interesting move for Lovell, and I noted that it’s another sign of the thriving ecosystem for online media startups in the Seattle area.

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As this week’s massive failure of Amazon Web Services cloud-computing infrastructure continued to roil the Web today, a few things were sadly clear. Perhaps most striking of all: Major service providers and websites—companies with enough money and talent to avoid the problem—didn’t spend nearly enough energy planning for the inevitability of a breakdown.

Yes, it’s probably asking too much for many small startups to double up their cloud-computing spending to prepare for what has been, up to now, a very rare outage from one of the biggest players in IT infrastructure. But what about the service providers that harvest money from that long tail of little companies?

Exhibit A is San Francisco-based Heroku, the hugely popular development and hosting platform that relies on Amazon’s service. When Amazon went down, Heroku went with it—taking along more startups than it had to, if the middleman had hedged its bets more effectively. It’s possible that Heroku had plans to move in that direction eventually, but that obviously that hasn’t happened fast enough to avoid a devastating outage.

That’s not to excuse Amazon’s meltdown or spotty communication with affected parties, which has magnified the problem. But remember that Heroku is no scrappy little startup—the company was purchased just a few months ago by Salesforce.com (NYSE: CRM) for more than $200 million.

“For someone like Heroku, which literally hundreds of startups use—Heroku should start thinking about, ‘OK, what can we do to spread the risk?’” says entrepreneur Shyam Subramanyan, whose San Francisco Bay Area startup list.ly was shut down by the outage. “A lot of people are paying them money.”

Scott Sanchez from CloudNod.com pointed to Los Gatos, CA-based Netflix as a good example of a large company making sure it had redundant protection. “They’re charging half the world $9.95 a month. It’s important for them to stay available, and they invested in the proper architecture. And they didn’t have to point any fingers,” Sanchez says.

On the other side of the coin were companies like popular content-aggregation website Reddit, which was still in a bare-bones mode Friday afternoon because of Amazon’s cloud problems. Reddit, … Next Page »

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It has been a ridiculously busy week for EMC—and for everyone else, it seems. For starters, the Hopkinton, MA-based data storage giant (NYSE: EMC) announced record quarterly revenues for the third quarter of 2010. Yesterday the firm hosted its fourth annual innovation conference from its center in Cork, Ireland—which amounted to a company-wide session on strategy and research, the largest of these gatherings to date, involving 15 EMC facilities worldwide. And in other news, the rumor mill has been buzzing with talk about EMC being a possible acquirer of Seattle-based storage firm Isilon Systems (NASDAQ: ISLN), in a deal that reportedly could be worth upward of $2 billion.

Amid all this activity, EMC chief technology officer Jeff Nick took some time to talk with me last week about the company’s broader innovation strategy—tackling aspects that are internally and externally focused, home-grown and acquisition-based. Like IBM (NYSE: IBM), one of its main competitors, EMC is known as an aggressive acquirer of companies, using new businesses to further its technology and attack new markets—witness its recent purchases of Mozy, Greenplum, and Data Domain. But it’s also known for pursuing some pretty interesting in-house initiatives aimed at turning cutting-edge research into technologies and services that its product groups can use.

Unlike big tech companies such as IBM and Microsoft (NASDAQ: MSFT), EMC doesn’t have a big traditional research organization charged with advancing the state of the art in technology. Instead, EMC pursues more of a virtual model—an “innovation network” (run by Burt Kaliski, formerly of RSA) that consists of virtual centers as well as a few physical research facilities, and collaborations and partnerships with academic researchers at places like MIT, Harvard University, Carnegie Mellon University, Stanford University, University of Michigan, and Tsinghua University in Beijing. The topics of its R&D projects include things like scalable file systems, Internet cloud security, and data availability on peer-to-peer networks.

In our recent chat, Nick didn’t deviate too much from his message about EMC’s innovation network and conference, but I did get him to open up a little about how the firm balances its in-house R&D with its acquisition efforts, how it works with and thinks about startups and smaller businesses, … Next Page »

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Network technology provider Sonus Networks (NASDAQ: SONS) of Westford, MA, announced today that it has brought on Raymond Dolan as president and CEO, effective immediately. The Westford, MA-based company revealed in May that its chief executive  and director Richard Nottenburg planned to step down from his post by March 2011. Dolan has held positions at companies in the networking, mobile, and telecommunication technology spaces, including Qualcomm, Flarion Technologies (which was later acquired by Qualcomm), NextWave Telecom, and BellAtlantic/Nynex Mobile.

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Nathaniel Borenstein is a man you either love or hate. Or both. There’s nothing in between. If you have more than 24,000 unread e-mails in your inbox, like I do, you curse the day he was born, even if you enjoy being able to communicate with friends and business contacts in real-time, for free.

Borenstein is one of the fathers of modern e-mail systems. Currently based in remote northern Michigan, about a three-and-a-half hour drive from Detroit, he is an original designer of MIME (Multipurpose Internet Mail Extensions), the standard protocol for Internet e-mail that supports different kinds of character sets, non-text attachments, header information, and other crucial (if boring-sounding) features. As of three months ago, he is also chief scientist at Mimecast, a U.K.-based company that is making waves in the U.S.—and has been expanding its presence in the Boston area.

Mimecast makes e-mail management software, primarily for mid-market and medium-size corporations. The goal of the software is to make e-mail systems and archives easier to manage, more efficient, and more secure. It also lets you do things like track detailed information about e-mails across different networks and nodes, so customers have a clear record of when a given message was sent, and exactly where it was received.

The company was formed in 2003 by a pair of South Africans, Peter Bauer (the firm’s chief executive) and Neil Murray (chief technology officer). They first introduced their product in the U.K. in 2004 and set up headquarters in London. In 2008, Mimecast came to North America with a very small team that has grown to about 50 people, including a growing office in Waltham, MA. The firm has 220 employees worldwide.

Mimecast says it has some 3,500 corporate customers, amounting to 700,000 users and about 11 million mailboxes. “We’ve grown pretty substantially,” says Mary Kay Roberto, the company’s senior vice president and general manager in North America. “Last year we doubled the business, and we’ll probably grow by 70 to 80 percent this fiscal year.”

Borenstein, 53, is key to the company’s growth strategy. At Mimecast, his domain includes intellectual property management, e-mail standards work, and research and development. He was previously an IBM Distinguished Engineer, a faculty member at the University of Michigan and Carnegie Mellon University, and a founder of First Virtual Holdings (an online payment system acquired by DoubleClick) and NetPOS (an Ann Arbor, MI-based e-commerce startup).

“It takes a lot of discipline for a company of this size to do anything but the short term,” Borenstein says. “I’m trying hard to put half the time into seeing where we can go. This is the right place to … Next Page »

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Livemocha is ready to kick some language learning butt—at least according to chief executive Michael Schutzler. The Bellevue, WA-based startup is already the largest online language learning community in the world, with over six million members from over 200 countries actively studying some 38 languages—not bad numbers for a 3-year-old company. But this isn’t enough for Schutzler, who has his eyes set on beating popular language learning software company Rosetta Stone.

“Our mission is to do this for every language, and our goal is to get every single person on the planet to converse in multiple languages,” he says.

While this may seem like a pretty lofty ambition, given that there are literally thousands of languages spoken throughout the world, Livemocha does have one advantage—it already has an established global community. Even though the company is based here in the states, this isn’t a U.S.-centric company. Ninety percent of Livemocha users, according to Schutzler, are based outside of the U.S.

Livemocha is structured quite differently from its rival, Arlington, VA-based Rosetta Stone (NYSE: RST). Rosetta Stone offers CD-ROM courses in 29 languages (and a few more in varying dialects)—most of which come in multiple levels, and run anywhere from $219 to $249 a pop. Instead of selling retail software, Livemocha offers a series of free and paid lessons accessible online, where it connects learners with native speakers around the world in real time—what Schutzler calls the centerpiece that differentiates it from the competition.

Every month Livemocha’s 6 million members help to build out its community by creating more than a million speaking and writing activities for each other, reviewing each others’ work. Its users generate an average of 35,000 exercise reviews every day—and they practice real time conversation skills with other users in the network.

“At any moment in time half the community is contributing in an editorial fashion, and the other half of the community is learning,” Schutzler says.”We’ve created this transformative language experience that makes conversation the real language.”

Rosetta Stone’s CD-ROM can’t do that, he says.

Michael Schutzler

“The investment in Rosetta Stone is massive, but the average time its users spend on it is only 2.5 hours, over 6 months,” he says.

Why is this? Because learning a foreign language is “really hard work,” especially for adults. So when the going gets tough, many give up. Livemocha has found a way to marry language learning course curriculum with community interaction, and this, he says, is what makes the Livemocha system more effective. While Schutzler declined to comment on the retention levels of Livemocha’s users, he did say that the engagement is much more pronounced because of the social nature of the community. He himself logs on to tutor others in the community in English and German, and is currently learning Spanish, and “refreshing” his Arabic.

“At the heart of what we do is conversation practice, and the only hope we ever have of learning and mastering a language is talking with a conversation,” Schutzler says. The company even has a growing number of members who are starting to make a living on Livemocha, through points earned tutoring other members, grading coursework, and creating new practice exercises.

Livemocha currently has 38 free languages available on its site—everything from commonly spoken languages such as Spanish, English, and Hindi, to the more obscure Catalan, Icelandic, and Latvian. And yesterday it rolled out its more advanced paid service, Livemocha Active Courses, in five … Next Page »

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It’s no surprise that many traditionally brick-and-mortar industries and activities are being improved or even replaced by Internet technologies. Wakefield, MA-based HubCast is looking to do the same thing for commercial printing, which is far more complex than the few clicks required for printing an essay off of a personal computer, say.

Traditionally, commercial printing has been a “very manual, antiquated process,” says HubCast founder and CEO Toby LaVigne, whose family has been in the printing business for four generations. He says that for companies looking to put out marketing materials—from catalogues to brochures to posters—working with traditional printers bears some similarities to serving as the general contractor on a kitchen remodeling job: lots of phone tag, voicemails, and ad hoc instructions. And it all has to be done during the course of workdays. Plus, if your printer is in one city and you wanted your material in another, you’d just have to ship it.

So LaVigne started HubCast to make printing commercial material far more akin to printing personal documents from your desktop. The startup got off the ground in 2007, with $8.1 million in Series A funding, from Commonwealth Capital Partners and Ascent Venture Partners. Earlier this year it rolled out a professional version, designed to give companies more printing inventory and preferred pricing from printers.

“The HubCast experience feels a lot more like having an Amazon account,” says LaVigne.

Here’s how it works: Companies can handle all their commercial print jobs through their online HubCast accounts, in much the same way that customers would shop in other forms of e-commerce. HubCast helps print “whatever companies use to communicate with customers for sales and marketing,” LaVigne says.

The HubCast service enables companies to store and manage the files they eventually want to send to the printers in the Internet cloud. They can dictate all the printing specifications via an online interface that would have traditionally been handled via multiple phone calls, and it doesn’t have to be within normal business hours. Printing customers can choose same-day, next-day, or five-day delivery for their products.

“You can literally place an order any time, day or night, from anywhere to anywhere,” LaVigne says.

Anywhere within the HubCast printer network, that is. LaVigne says HubCast has identified the top 135 cities by per-capita GDP across the globe to determine where the bulk of commercial activity happens, and is adding printshops in those areas as part of the HubCast network to take orders. For example, if you’re a Boston company that needs … Next Page »

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If Arbor Networks were a tree, its roots would be in Michigan. Its branches and leaves (and some of its caretakers) would be in Massachusetts. And its proud new owners would be in Texas and Washington, DC—with a lot to live up to.

Earlier this week, Chelmsford, MA-based Arbor Networks, a maker of software for network security and management, said it is being acquired by Texas-based Tektronix Communications, which is owned by Danaher (NYSE: DHR), the technology conglomerate based in the nation’s capital. Financial terms of the deal weren’t disclosed, and at least at first the principals at Arbor and Danaher weren’t saying much beyond the platitudes that typically follow such a merger.

So I spoke with Arbor’s co-founder and chairman, Farnam Jahanian, and the company’s CEO, Colin Doherty, to hear about what the deal really means for Arbor, and to learn more about the company’s 10-year history. As I found out, its story is a pretty compelling case study of a university spinoff that got venture funding, got profitable fast, survived two recessions and a brutally competitive landscape, and emerged on the other side in a stronger position.

First, a few practicalities about the merger. Arbor will stay “whole and intact as an operating unit under the Danaher brand,” says Doherty. The company has 275 employees worldwide—about 90 in the Boston area, 90 in Ann Arbor, MI, and the rest in other locales like London and Singapore. Jahanian is exiting the company, while Doherty will stay on as president of Arbor, which will become part of Danaher’s communications and enterprise group (which comprises a half-dozen companies, including Tektronix Communications, Fluke Networks, and AirMagnet).

Arbor will provide its new parent company with deep Internet security knowledge—what Doherty calls a “security beachhead.” Now “they can detect, secure, and mitigate network security. It was a really good fit for them,” he says. And now, with Danaher’s size and influence, he says, “it’s a unique opportunity for us to change our model…and be part of a larger public vehicle.”

Arbor Networks was founded in 2000 by Jahanian, who is chair of computer science and engineering at the University of Michigan, and Rob Malan, who was Jahanian’s Ph.D. student at U-M and is now Arbor’s chief technology officer (he will stay on as CTO). The company’s core technology, based on Malan’s and Jahanian’s research, involves software that monitors entire computer networks—from data centers and Internet service providers to broadband customers and mobile interfaces—and protects them against all manner of security threats, most notably, denial-of-service attacks that can shut down big networks and popular websites. (Basically, this means there’s a good chance your Internet service … Next Page »

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Arbor Networks, a Chelmsford, MA-based developer of security and network management software, has agreed to be acquired by Tektronix Communications, the Texas-based firm now owned by tech conglomerate Danaher (NYSE: DHR). Terms of the deal weren’t announced, but it is expected to close next month. Arbor Networks was founded in 2000 by University of Michigan professor Farnam Jahanian and U-M PhD grad Rob Malan. It makes security software primarily for Internet service providers and data centers. The company has a growing presence in Ann Arbor, MI. Meanwhile, Tektronix Communications is affiliated with Tektronix, the Oregon tech institution that was bought by Danaher in 2007 for $2.85 billion. Back in 2004, Tektronix had acquired Texas-based Inet Technologies as its entry into networking software.

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Polaris Venture Partners, a $3 billion-plus venture firm, has found more capital to back technology and life sciences firms. The Waltham, MA-based venture firm has closed on $233.8 million of a planned $400 million for its Polaris Venture Partners VI LP fund, according to an SEC filing.

When people talk about the leading venture funds, Polaris Venture Partners usually finds its way onto their short lists. Terry McGuire, a co-founder and general partner of the firm, recently finished a term as chairman of the National Venture Capital Association. Under the leadership of McGuire and others at Polaris, the firm has racked up some wins over the past decade with its investments in such companies as Cambridge, MA-based Alnylam Pharmaceuticals (NASDAQ:ALNY), Cambridge-based Akamai Technologies (NASDAQ:AKAM), and the Lebanon, NH-based biotech GlycoFi (now part of Merck & Co.)

However, Polaris appears to have pared down the target for its latest fund from a previously reported $500 million to $400 million, VentureWire reported. Polaris, which also has an office in Seattle, raised $1 billion for its last fund in 2006. McGuire declined to comment on the new fund this morning.

Yet small, focused funds appear to be a way forward for venture firms, which struggled to deliver returns to investors over the past decade. Polaris has also looked to build stronger ties with the startup community through its Dogpatch Labs. Dogpatch provides early-stage entrepreneurs with cheap office space and access to a network of investors and other startups. Polaris launched the program in San Francisco in 2007 and expanded it to Cambridge and New York City last year.

Wade, who leads Xconomy’s tech coverage in San Francisco, covered the recent growth of Dogpatch’s Cambridge offices in April. At the time, Dogpatch hosted about 100 entrepreneurs at its three locations.

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Sonus Networks (NASDAQ:SONS), a Westford, MA-based provider of telecommunications network products, says that its director and CEO, Richard Nottenburg, plans to step down from his posts by March 2011. Nottenburg, a former Motorola executive who has helmed Sonus since June 2008, will help the firm’s board find his successor, according to the company. He’s led the company through a corporate restructuring plan, which included the layoffs of 50 employees in December 2008 and 93 workers in August 2009, cutting its overall work force by about 14 percent. The plan helped reduce the company’s annual loss from $116.2 million in 2008 to $4.9 million in 2009.

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Camiant, a Marlborough, MA-based developer of technology that manages applications on mobile and broadband networks, will be acquired by Morrisville, NC-based mobile data management company Tekelec for $130 million, the companies announced today. The deal with Camiant, whose website lists its investors as North Bridge Venture Partners, Matrix Partners, and Pilot House Ventures, is expected to close within a week. Tekelec also acquired Montreal, Canada-based subscriber data management company Blueslice Networks for $35 million, a transaction that closed May 5.

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Last week was a pretty good one for Nick Hanauer. When I visited his office, he was basking in the glow of the mid-afternoon sun—and the afterglow of President Obama’s signing of the much-ballyhooed healthcare reform bill. (Yes, he’s a staunch Democrat.)

But I wasn’t there to talk politics. Hanauer is one of the Seattle area’s most successful investors and businessmen, and one of its most influential thinkers. He is a founder of Second Avenue Partners, an investment group focused on early-stage companies. He was the first non-family investor in Amazon.com (and a board advisor until 2000); the founder of Avenue A Media (which became aQuantive and was sold to Microsoft for $6.4 billion in 2007); and an investor in such diverse companies as Insitu (sold to Boeing for some $400 million in 2008), Newsvine (sold to MSNBC.com in 2007), Market Leader (formerly HouseValues), Modumetal, and Qliance.

He is also a political activist, a die-hard science buff, and an amateur astronomer. And he’s giving the opening keynote today at our Xconomy Forum (“What’s Your Breakthrough Idea?”) at the University of Washington at 1:30 pm. He will set the table by discussing where “breakthrough ideas” fit into the overall taxonomy of startups and entrepreneurship, and he’ll give examples of some transformative ways of thinking from his own experience.

To whet my appetite, and those of our readers, I sat down with Hanauer for an extensive and wide-ranging chat. I should have known better; it was like partaking in a 15-course dessert buffet just before the main meal. But it was vintage Hanauer—talking in depth about not conforming to societal expectations and how to think creatively about new ideas and metaphors, reflecting on why venture capital doesn’t work as a sector, quoting famous philosophers, and discussing the one area in which he would seek omniscient advice if he could. All of that sprinkled with insights from Amazon, Insitu, and other prominent companies.

Here is an edited transcript of the first part of our interview:

Xconomy: You’ve talked about the importance of new metaphors in thinking about potential breakthrough ideas. What do you mean by that?

Nick Hanauer: OK, here’s a non-business example of what I mean by that: The entire edifice of modern economic theory—Chicago school, efficient-market hypothesis, market fundamentalism, that has dominated our political discourse for 30 to 40 years—is based on the understanding of the world as a linear system. Modern economic theory requires the system to be linear in order to make the numbers add up. It requires humans to be rational calculators of their self-interest. The only way it works is if you assume every human can make an instantaneous net present value calculation about what they should do at every moment. What that does is it creates this idea in your mind that the market is this perfectly efficient machine.

The dominant narrative has been that markets are perfectly efficient. If it’s perfectly efficient, then the market is always right. And if it’s always right, you also have to believe, among other things, that the rich deserve to be rich, and the poor deserve to be poor. How could it not be, if the market is always right? You have to believe that any civic intrusion into market constructs is an abomination, because the market is always right. These things have to be true if that’s your metaphor for understanding how the economy works. But if you understand the economy for what it is—it is a complex, adaptive system. Our market isn’t just like an ecosystem, our market is an ecosystem. It’s complex, it’s adaptive, and it is shaped by the evolutionary forces identical to the forces that are at work in Puget Sound.

X: So what’s the breakthrough here?

NH: If you understand the market in that way, then it forces you to reckon with it like a giant garden. In that garden, we get to make choices about what’s going to grow, what we’re going to eat, and so on. All of a sudden, a civic intrusion into that structure doesn’t become an abomination, it becomes … Next Page »

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