Alnylam Pharmaceuticals, a Cambridge, MA-based developer of RNA-interference drugs, said today that it sees a new business opportunity in using its gene-silencing technology to increase the output of biomanufacturing processes. The company, which has already successfully licensed its RNAi technology for drugs, is looking to make additional money from its science by licensing it for manufacturing many types of biotech drugs.

The company (NASDAQ:ALNY) is presenting data today at its R&D day in New York that support the use of RNAi to silence certain genes in Chinese hamster ovary cells, which are used in biomanufacturing. Alnylam’s data show that the RNAi technology improved the viability of the cells by 40 to 60 percent, compared with untreated cells. The firm used RNAi to switch off certain genes that control metabolism in the cells, as well as genes involved in a cellular self-destruct mechanism.

An internal group at the company called Alnylam Biotherapeutics is advancing the application of RNAi technology in biomanufacturing. The firm, which plans to retain ownership of this use of the technology, says it could improve the production of existing biotech drugs, new biologics, and copies of biological treatments, known as “biosimilars” or “biogenerics.”

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“Ouch.” I’m sorry to say I didn’t write about the grand opening that drug giant Eli Lilly held in La Jolla yesterday for its new biotechnology center of excellence. I didn’t know about it.

I wrote last December about the difficulty of getting information from Lilly about the status of its plans to combine Applied Molecular Evolution and SGX, and suggested a more appropriate name for the facility might be “Lilly’s San Diego Biotechnology Center of Silence.” I was pleasantly surprised afterward when a Lilly media rep cordially reached out to provide contact information, and assured me that I’d be included when Lilly’s new eco-friendly center was opened. Oops.

It was my own fault, of course, for failing to spot the announcement that Lilly moved on the PR Newswire yesterday. What can I say? I got busy. Such is the nature of this business. The media demands a lot of hand-holding. (But then, Lilly did tell me I would be included.)

The center is officially known as the Lilly Biotechnology Center—San Diego. In its statement yesterday, Lilly says of the nearly 200 scientists based at the center, more than half are from AME, a local biotech that Lilly acquired in 2004 that specializes in biotechnology-based therapies built specifically from human proteins. Many of the rest are from SGX Pharmaceuticals, a San Diego startup that Lilly acquired in 2008 and merged into its discovery chemistry research and technology division.

I have to say I don’t have an excuse for this one either: In a speech in downtown San Diego today, Lilly’s chairman and CEO John C. Lechleiter declared that the engine of biopharmaceutical innovation is broken. In a statement released by Lilly, Lechleiter says, “At a time when the world desperately needs more new medicines—for everything from H1N1 to Alzheimer’s disease – we’re taking too long, spending too much and producing far too little.”

I’m sorry to report that I didn’t know about this in advance either.

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IRobot (NASDAQ:IRBT), the Bedford, MA-based maker of robots such as the Roomba for vacuuming and the PackBot for the military, revealed today that it has created a healthcare unit to focus on developing robots that help seniors live independently in their homes. Technology veteran Tod Loofbourrow is heading the new healthcare unit as its president and will report directly to iRobot CEO Colin Angle, according to the company. Angle is expected to discuss the company’s healthcare strategy today at the TEDMED conference in San Diego.

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[Corrected and updated, 10/28/09, 12:40 p.m.; see page 4.] Back in 2002, it must have sounded like a good idea for Orange, a fast-growing European wireless provider known more for the simplicity of its services than for their sophistication, to open an R&D center in Boston, where it could hire a troop of brainy engineers, consultants, and startup entrepreneurs to come up with ideas for new high-tech services that would continue to fuel its growth.

In practice, though, an array of barriers meant that Orange Labs—which settled near MIT in Cambridge, MA, and became home to what one former employee calls “the most talented, most passionate group of people I’ve ever worked with”—never really fulfilled its potential. Eventually, it lost the pull it needed within Orange and its parent company, France Telecom, to keep growing. And after a seven-year run, the lab will close its doors tomorrow.

France Telecom’s decision to shutter Orange Labs Cambridge is ostensibly part of a corporate consolidation effort—there’s another Orange laboratory in South San Francisco, and in tough economic times it’s hard to argue that any European company needs two U.S. research centers.

But several former Orange Labs members tell Xconomy that the Cambridge facility’s demise was so long in the making that it could perhaps have been predicted from the start. It was rooted, these sources say, both in cultural differences between the lab’s American engineers and their British and French overseers, and in textbook organizational frictions and rivalries that prevented most Orange Labs initiatives from maturing into products that could be deployed to actual Orange customers. Just as important, the former employees say, Orange’s San Francisco lab developed far stronger political connections to the France Telecom leadership, making it obvious which of the two labs was more likely to survive any cost-cutting round.

Orange Labs' facility on Second Street in Kendall Square, Cambridge, MA

But while Orange Labs Cambridge may not have fulfilled its creators’ hopes, it will leave a lasting footprint on the Boston technology scene. Developers at the lab prototyped services such as push-to-talk, mobile photo sharing, localized search, and app-like “widgets” long before any of these technologies became standard on mobile phones. The lab provided a home, at its height, to about 60 brilliant hardware and software engineers, including many graduates of MIT and other local universities. And it acted as a springboard for entrepreneurs who have gone on to play other important roles in the mobile industry—the most prominent being Orange Labs’ founder and first director, Rich Miner, who later co-founded mobile software startup Android, helped transform the Android operating system into an industry standard before and after the company was acquired by Google, and now runs Google Ventures.

Still, there’s a sense that the lab could have accomplished much more. “If I were to summarize the ultimate legacy that the lab had for Orange and France Telecom, I would say ‘missed opportunity,’” says Iliya Rybchin, who was a program manager at Orange Lab from 2002 to 2004 and is now overseeing digital development projects at publisher McGraw-Hill. “The fact that [France Telecom] wasn’t willing or capable of tapping into that talent pool, with that amazing level of innovation and insight and passion, is frankly unfortunate, because the kinds of things that we were producing in the lab really had the potential to be transformative in the industry.”

Officials at France Telecom have not responded to Xconomy’s requests for comment on the shutdown, nor has Orange Labs CEO Frank Bowman.

The story of Orange Labs starts with Orange itself, formed in 1994 by a consortium of British and French companies. Industry insiders describe the early Orange as a scrappy, innovation-focused, startup-style company that …Next Page »

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The Department of Energy this morning announced that FloDesign Wind Turbine of Wilbraham, MA, and five other Massachusetts startups and laboratories are among the 37 companies and organizations awarded research and development grants under the department’s new Advanced Research Projects Agency-Energy (ARPA-E) program. FloDesign has tentatively been awarded $8,325,400 to advance its research on radical new designs for electricity-generating wind turbines.

The other local winners include 1366 Technologies of Lexington, MA, Agrivida of Medford, MA, FastCAP Systems of Cambridge, MA, the Massachusetts Institute of Technology, and Sun Catalytix, also of Cambridge. Massachusetts organizations won $33.3 million in all, or 22 percent of the overall funds awarded, making the Bay State the largest recipient by far of the ARPA-E funds. United Technologies Research Center of East Hartfort, CT, was awarded $2.25 million, bringing the New England total to nearly $36 million.

“I think the fact that Massachusetts organizations received over 22 percent of the money allocated by the DOE is clear testament to how fast the region’s cleantech cluster has grown, and to how much of an economic impact it will provide in the future,” says Nick d’Arbeloff, president of the New England Clean Energy Council, a Cambridge, MA-based non-profit working to boost the region’s cleantech economy. “Companies like FloDesign, 1366, Agrivida and Sun Catalytix represent the future of high technology in the Commonwealth.”

[Update 10/27/09: Massachusetts also has a plausible claim as the home to the top grant winner in the competition, Foro Energy, which will receive just over $9.1 million. As Xconomy reported last night, the Littleton, CO-based startup, which is developing a new drilling technology for tapping geothermal energy deep in the Earth, was originally launched in the Boston area and is funded by Waltham, MA-based North Bridge Venture Partners.]

FloDesign CEO Stanley Kowalski says his company learned about its award this morning in an e-mailed letter from the Energy Department.

“It will accelerate to market what is inherently a risky endeavor,” Kowalski says. “Or at least, it’s been risky in the past because of the many false starts by others. This will allow us to put the proper money into research and development, which is the most capital-intensive phase, and will hopefully help us to get out to market with a reliable turbine.”

FloDesign is building and testing wind turbines with an unusual tube-like design reminiscent of a jet engine. The company says this design allows it to capture more of the energy in wind than a conventional free-bladed wind turbine can. Though the startup has tried to remain stealthy, it has been in the spotlight almost since its beginning—it won a $200,000 grand prize in the MIT Clean Energy Prize competition in May 2008, and later scored an investment from prominent Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers.

FloDesign shared a copy of its notification letter from the Energy Department, which said the company’s application was “among those of the very highest scientific and technical merit, and is part of an ARPA-E portfolio of high impact projects that have great potential to revolutionize the U.S. energy sector.” A total of $151 million was handed out to the 37 organizations on today’s list, who are all finalists in a competition launched last spring as part of a $400 million boost to Federal energy spending contained in the American Reinvestment and Recovery Act, colloquially known as the stimulus bill.

The $8.3 million awarded to FloDesign is the third-largest amount awarded today, after Foro Energy’s $9.1 million and an award to Dupont of Wilmington, DE, of $9 million.

The ARPA-E grant will make a big difference to FloDesign, Kowalski says. “It’s a sizeable investment, and I think it’s indicative of where we are and the capabilities of the team we’ve got on board,” he says. “We continue to recruit world class talent and we certainly have a radically different turbine that nobody has ever attempted to commercialize in the past. The support from ARPA-E will allow us to fund that appropriately for the R&D effort that’s approaching.”

1366 Technologies was awarded $4 million in the competition. Agrivida will get $4.6 million, FastCAP Systems will get $5.3 million, MIT will get $6.9 million, and Sun Catalytix will get $4.1 million. The full list of awardees is here; the Department of Energy said it selected the 37 winners from an initial pool of more than 3,600 concepts, from which the department requested 300 full applications. The exact amount of each award will be determined in final negotiations between the department and the winning organizations.

The 37 ARPA-E winners hail from 17 states. The department said that 43 precent are small businesses, 35 percent are educational institutions, and 19 percent are large corporations.

In a statement on the awards, Energy Secretary Stephen Chu said, “After World War II, America was the unrivaled leader in basic and applied sciences. It was this leadership that led to enormous technological advances. ARPA-E is a crucial part of the new effort by the U.S. to spur the next Industrial Revolution in clean energy technologies, creating thousands of new jobs and helping cut carbon pollution.”

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Some tech companies seem to be at their best when things are at their worst. Those are the ones you really need to keep an eye on, especially in a recession. Isilon Systems is one of those companies.

The Seattle-based data storage firm (NASDAQ: ISLN) is announcing its third-quarter earnings this afternoon, and it will be interesting to see how well its products are selling across a wide range of industries—everything from movie studios and media companies to financial institutions and biomedical research organizations. I recently sat down with Isilon’s founder and CEO, Sujal Patel, for a wide-ranging interview about the nine-year-old company’s technology and business strategy. It makes for a pretty compelling case study of a tech startup’s growing pains, and how it has bounced back from adversity to become a leading player in a crowded and competitive field.

In case you don’t know all the twists and turns in Isilon’s history, here’s a quick recap. Patel, a former engineer at Seattle-based RealNetworks (NASDAQ: RNWK), co-founded Isilon in January 2001. The basic idea was to provide cheaper and more efficient data storage for companies needing to host or deliver video, music, and other multimedia content that requires a lot of storage space. In his previous role as chief architect of RealNetworks’ media delivery software, Patel had seen many customers struggle to upgrade their storage capabilities. So there was a real problem to solve. But the tech bubble had collapsed, so customers weren’t necessarily in the mood to buy. Patel says he “pretty much timed the worst spot of the decade to start a company.”

What’s more, there were already about 250 venture-funded storage companies out there, Patel says, and about 50 of them sounded just like Isilon. Patel says he built his business plan around solving the specific problem Real’s customers had, and “how that problem would be pervasive across all mid-range to large enterprises over the next decade.” To start with, he set an incredibly narrow customer focus on photo-sharing and streaming media websites, and media companies.

Isilon’s technology approach was to cluster together a large number of storage “bricks”—each one includes disks, memory, processing, and networking—into a single storage unit. It was a novel approach in the field of network-attached storage, which today is a $4 billion industry with big players like NetApp, EMC, and Hewlett-Packard. Isilon’s technology requires solving some very tough software problems, but the payoff is better storage performance that is also cheaper and easier to manage, for companies dealing with huge amounts of unstructured data. “We can build one gigantic network drive, and we can scale it as the customer’s needs change over time,” Patel says.

Venture capitalists were sold. In August 2001, Isilon closed an $8.4 million funding round …Next Page »

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Orange Labs in Cambridge, MA, France Telecom’s East Coast research outpost, will reportedly close down as of October 30. Scott Kirsner of the Boston Globe first reported the story this morning; a France Telecom spokesman told him the Cambridge lab duplicates the functions of other Orange labs in France, Japan, and Silicon Valley. Michael Cappelletti, the Cambridge lab’s director of operations, tells Xconomy that he can’t comment on the report. “The information has not been officially published,” Cappelletti says, but “It has been publicly discussed.”

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From the seas to the stars, Microsoft Research is trying to increase its impact. The Redmond, WA-based computer science research organization is releasing new software tools aimed at helping scientists manage and visualize huge amounts of information, and make discoveries in fields as diverse as astronomy and oceanography. The announcement of the free tools, called Project Trident, is being made today at the 10th annual Microsoft Research Faculty Summit in Redmond.

Everyone knows information overload is a huge issue. Just try being a scientist these days. With increasing amounts of data available from the Internet, satellites, telescopes, cameras, gene sequencers, and networked sensors, researchers—and organizations in general—are looking for ways to cut through the deluge and focus faster on doing the analysis and getting results, rather than sorting through data.

It’s also a problem faced by big companies, financial analysts, and medical institutions. So, ultimately, Project Trident is not aimed at spearing purely scientific research problems—it’s software that also could yield big results for business down the road. “If we look back at the challenges faced in business, scientists were facing them years if not decades before,” says Roger Barga, a Microsoft researcher and principal architect on Project Trident. “We’re getting an early look at what our business customers will expect in their products in 3-5 years. It’s pushing another Microsoft [Windows] platform into new areas.”

Project Trident started around 2006, when Barga began collaborating with legendary Microsoft researcher Jim Gray (who was lost at sea in January 2007) on tools to help oceanographers make sense of volumes of data on things like temperature, salinity, and the physics of seafloor hydrothermal vents. “There’s a clear understanding of the science and how to put instruments in the ocean, but there’s a gap in how to convert data streaming in from the ocean to useful analysis,” Barga says. “Jim had this vision of …Next Page »

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EMC has joined the growing ranks of major information technology companies boosting their R&D presence in Kendall Square, creating EMC Research Cambridge, a small research arm near MIT. It has already moved the headquarters of RSA Laboratories to the new outpost, and has signed on as a corporate sponsor of the MIT Media Lab. The company made the announcements today as part of XSITE, the Xconomy Summit on Innovation, Technology, and Entrepreneurship, where EMC senior vice president and chief technology officer Jeff Nick is taking part in a keynote session called Investing in Innovation.

But while the EMC move in some senses follows on the heels of Google and Microsoft, both of which have set up shop in Kendall Square in the past couple of years, the company says it has had an R&D presence in Cambridge for at least a decade, and has long worked with Boston area universities and startups on a variety of efforts. Now, EMC says, it is not only moving closer to the action and deepening ongoing relationships and initiatives, but also prototyping a different model of research and advanced development.

Only a few researchers will be permanently housed in the new lab. Instead, the company plans to rotate through a series of staff members on a regular basis—not just researchers and engineers, but also representatives from various business divisions—with the aim of coupling staff members closer to the leading edge of technology on several fronts. EMC Research Cambridge will also link into the existing EMC Innovation Network, which ties the company’s research and advanced technology groups and university partners around the world into collaborations that include the company’s research arm in China, its Santa Clara (CA) Incubation Lab, and other groups.

In this way, the Cambridge lab represents a model of how to extend research by utilizing existing resources in more effective ways, not adding staff, says Burt Kaliski, director of the EMC Innovation Network, which is part of the CTO’s office. “In the world we operate in today, the Web 2.0, globalized world, we’re looking for ways to leverage the potential that exists inside and outside the company to make us a more effective company and understand technology trends that are driving and disrupting information infrastructures,” Kaliski says. “Because we are a virtual team, we’ll have touch points in many areas.”

The director of EMC Research Cambridge is Rob Masson, a five-year veteran of EMC who has spent the last two years in the Advanced Technology Ventures group (also in the CTO’s office). I met with him and Kaliski in the new lab, at 11 Cambridge Center in Kendall Square. (VMware, in which EMC owns a majority stake, also has an R&D lab a short walk from EMC Research Cambridge.) They explained that …Next Page »

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Scene: An abandoned brick building along the Connecticut River. The image dissolves, then reforms to show a new, ultra-modern factory in its place. Move to interior shot of computers and server banks. Brilliant academics ponder the future. Highly trained young professionals walk purposefully, the future alive in their eyes.

I have no idea whether the scene depicted above is accurate. But that’s the vision planted in my mind by the announcement earlier this month that the state of Massachusetts and a coalition of corporate and academic institutions—MIT, Boston University, the University of Massachusetts, Cisco, and EMC—had banded together to plan a High Performance Computing Center (HPCC) for Holyoke, MA.

Xconomy broke the news about the HPCC on June 9. The general idea is that a state-of-the-art “green” data and computing center in Holyoke, cooled by the Connecticut’s waters and powered by affordable, renewable hydropower, will establish Massachusetts as a leader in next-generation computing technologies and bring jobs and dollars to the depressed Holyoke region. The center would presumably house the networked servers and storage systems needed to address complex research problems in fields from genomics to climate modeling, as well as various commercial projects. “The potential for breakthrough technologies and research is enormous,” said Governor Deval “the Govinnovator” Patrick in a statement, “and both the center and this collaboration will undoubtedly serve to lift up the City of Holyoke and regional economies throughout Western Massachusetts.”

That’s the essence of the coverage to date. But, of course, that is only the beginning of the story—since the plan hasn’t even been finalized yet. I was especially interested in the corporate angle to all this, since corporate innovation is an issue I’ve spent a book or two exploring. And while to date this column has dealt mainly with entrepreneurs, venture capitalists, and startups, innovation really does happen in big companies, too. And so, against the backdrop of the envisioned High Performance Computing Center in Holyoke, this is a look at such an attempt.

My guest for today’s column is Jeff Nick, SVP and chief technology officer for EMC. The story he tells isn’t just of a data storage and management company wanting to spur the construction of an advanced computing center to grow its current businesses. Rather, Nick laid out a multi-tiered strategy of how EMC plans to combine its shorter-term business ambitions with efforts to explore the future in virtual computing, cloud computing, data management, security, and more within the confines of the fully operational, fully commercial data center.

At a high level, Nick characterized the project as offering “three dimensions of opportunity” for EMC and its R&D strategy. The first lies in the opportunity to test new techniques involving the center’s physical infrastructure, what Nick calls “ping, power, and pipe.” (”Ping” is a new term for me that Nick says refers to the way cables are physically laid down to network computers together.)

Systems infrastructure, as opposed to the physical infrastructure, is the second area of opportunity EMC’s chief technology officer sees. This covers areas such as virtualization—the specialty of VMware, a California company that is majority-owned by EMC—and cloud computing, the domain of EMC’s Cloud Infrastructure and Services Division.

These technologies will be both the undergirding for, and to some extent the subject of, the research projects envisioned for the new center. For instance, Nick says the HPCC will …Next Page »

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Where does technological innovation happen around Boston? What are the sources of new software and hardware creations? You’ve probably heard about Google and Microsoft moving to Cambridge in the past couple of years—but did you know Microsoft has two labs in Cambridge, not one? Or that another Silicon Valley company has a research lab just upstairs from Google in Kendall Square? Then of course there’s IBM’s social software lab, which gave us Wordle. And the aerospace robotics research lab on the 12th floor of a Cambridge office tower at One Broadway.

So far, my columns have been stories—with beginnings, middles, and ends—based on little things we reporters like to do, such as interviews, with plenty of quotes from the innovators, entrepreneurs, and venture capitalists I visit.

This week is different: for today’s column, I’ve done exactly no interviews. But I have done a good amount of research. This week, I decided to write about something I have been noticing for quite some time—the growing presence of non-university software and IT research and development labs in the Boston area, especially around Kendall Square here in Cambridge. At Xconomy, we’ve written about several of these labs and efforts piecemeal—like when Google came to town, or when Microsoft hired Reed Sturtevant to open a new advanced development lab at One Memorial Drive. We’ve even chronicled the decline of a once-world famous computer science lab, the Mitsubishi Electric Research Laboratories (MERL), which is still based on Broadway in Cambridge, not far from MIT.

But I’ve always wanted to wrap these up into a bigger article, with full details on each lab—how many people they employ, what areas of technology they specialize in, and so on. Truth be told, I haven’t gotten to that in this column, either. But I’ve made a start.

Below, with the help of our rising star intern from Boston University, Roxanne Palmer, and chief correspondent Wade Roush (who wrote many of the stories I mentioned above), I’ve mapped out the labs we know about. I’ve also added a few descriptions about the efforts when available. A few caveats: the list doesn’t include university labs, such as MIT’s Media Lab. Also, there is wide disagreement in IT, especially when it comes to software, about what can be considered R&D. I’ve tried to focus on labs or efforts that go beyond routine or normal product development to farther-out efforts that are riskier, more open-ended, and aren’t expected to bear fruit until a year or three down the road.

To see details about a lab and links to our stories, where available, you can either click on a little orange light bulb on the map below (these are creative R&D efforts, get it?) or browse the company list at this Google Maps page. If you go with the light bulb option, you may have to zoom in to see individual labs that are close together. For instance, both Google and VMware are housed in the same building at 5 Cambridge Center—but you only see one icon unless you get very up close and personal. The same is true for Aurora Flight Sciences and Conduit Labs, which are both at One Broadway in Cambridge.

A last caveat: this is a work in progress, and it’s not based on any exact science. So I’d love your feedback, both about labs I’ve included that maybe shouldn’t be here because the work is too short-term and routine, and about those I’ve missed (and I’m sure I’ve missed a lot). Either drop a comment below or write us at editors@xconomy.com.

View Boston Tech R&D Labs in a larger map

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Ceiling fans lolling high overhead, starfish in trawler nettings slung on one wall, funked-out wood floors, bar stools, round tables, comfy couches, a big bowl laden with fruit, huge windows overlooking the pier. No cubicles, just work areas with signs indicating where one company ends and another begins—and sometimes no signs at all. The whole place oozes creativity, hipness, young turks inventing the future.

This is the home of Dog Patch Lab, a startup incubator run by Polaris Venture Partners (Dog Patch occupies only a piece of the space I just described—more on that in a minute). Which itself is surprising, since it’s almost the antithesis of Polaris’s mainstream, East Coast image. If you’ve ever visited Polaris headquarters in Waltham, MA, the best you can say is that it’s just like all the other venture firms in the Bay Colony Corporate Center—modern, spacious, business-like.

You would not call it cool in any way.

But this is a side of Polaris we don’t see in Boston, for the simple reason that it’s in San Francisco—along the famous Embarcadero. I mentioned it briefly in my column about Boston VCs investing in social media. But, as your intrepid reporter out to bring to light new aspects of Boston’s innovation community, I stopped by on a recent West Coast trip to find out more about Dog Patch, how it works, and what its inhabitants are doing.

Polaris general partner Mike Hirshland and executive-in-residence Brian Grey set up my visit—although neither could be present for my tour. My host was Ken Thom, VP of operations for Social Media, which runs an ad network for companies making social applications. Social Media refitted the space on Pier 38, just south of the Bay Bridge, in late 2007—and now controls some 10,000-12,000 square feet. It sublets parts to other companies, mostly startups working on Facebook apps. And to Polaris.

Dog Patch, which got going about a year ago, started with four or six desks, says Thom, and then expanded to 10 desks. “Now Polaris has both of those rooms,” he says, pointing to one wing of the space that looks over the waterfront.

Click on image to see it bigger--and better.

All told, some 70 people occupy Social Media’s space. I’m guessing about 15-20 of them are Dog Patch denizens. Hirshland says Dog Patch currently houses four startups, plus a group run by Ariel Poler, previously of StumbleUpon and other companies, and co-founder of LOLapps, a former Dog Patch puppy (more on LOLapps below, although Poler was out during my visit and so I never connected with him).

I looked in on Threadsy, which seeks to unite consumers’ s e-mail, social networks, and other online messaging services. It occupies its own little room, up a half-level from Dog Patch. It turned out Threadsy was once part of the “kennel,” but had moved to its own space. I wondered if it had been funded by Polaris (that is not a requisite—read on). “Are you guys a Polaris company?” Thom relayed. “Not yet,” was the answering shout.

Next, I stopped by a mannequin wearing an AppJet t-shirt. AppJet, you might recall, was a Y Combinator company a couple of summers ago; it offers an easy-to-use online platform for programming Web applications. Those guys seemed very busy, so I didn’t interrupt, and the mannequin would not reveal other details.

AppJet mannequin

Mr. Tweet was a bit more chatty. CEO Ming Yeow Ng and chief engineer Yu-Shan Fung were out—so I spoke with Hamilton Ulmer, who claimed his title was village idiot. Mr. Tweet, he explained, is a people recommendation engine for Twitter. “We analyze who you follow and talk to, and from that we make recommendations about other people that you might be interested in following, people with your interests,” he says.

Across the aisle from Ulmer was Vikas Gupta, CEO of Jambool and former head of Amazon’s payments platform and flexible payments web service. He and three colleagues were all berthed at one table, two on each side. Five other employees work in Seattle. Jambool is best-known for its product, Social Gold, a currency/payment platform for social communities such as online games, virtual worlds, and social media sites. “Payments for the next generation of users online,” sums up Gupta.

He says Social Gold is already one of largest payment providers on Facebook and MySpace, but he declined to give any numbers. The company launched two years ago, but only raised its Series A round—roughly $1 million—about eight months ago, Gupta says. Polaris was not part of that round, which included Hit Forge, Charles River Ventures, and Bay Partners.

The last company I spoke with also had Seattle ties. I’d tell you the name, but …Next Page »

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Watertown, MA-based QD Vision, which makes solid-state lighting devices based on nanotech “quantum dot” technology, said today it has been awarded $700,000 from the U.S. Department of Energy for a joint R&D project with MIT electrical engineering professor Marc Baldo. The project’s goal is to make organic light emitting diodes more power-efficient and pleasing in appearance, the company said.

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Much has been made of the fact that Microsoft is moving about half of its Live Labs applied research staff to other divisions, such as product groups and Microsoft Research. The news, announced within Microsoft a week ago, has been met with criticism from outside observers, who lament the reduction of one of the company’s most innovative groups (some would say its most innovative group). But there is another side to this story.

Live Labs was founded in January 2006 by Microsoft technical fellow Gary Flake, in a partnership between MSN and Microsoft Research. Its main goal was to accelerate innovation in Internet technologies like search, data mining, and distributed computing. Live Labs has been best known for developing visual interface technologies like Seadragon, a zooming application for all sorts of visual information, and Photosynth, which lets you create striking 3-D virtual environments from a series of photos.

According to the Live Labs blog, the current restructuring sends various team members to MSN, Windows Mobile, Microsoft Advertising, and Live Search. “Contrary to recent whispers and tweets, we are not shutting down, disbanding, dismantling, or anything of the sort,” the blog said. “In the coming weeks and months we’ll bring you updated developer tools, new ways to use Seadragon, and much more.”

Microsoft hasn’t said specifically what will happen to Photosynth and other favorite technologies from Live Labs. But the broader question on many people’s minds is whether the innovativeness of Live Labs will be crushed by plugging staff members into shorter-term product development instead of applied research.

Ed Lazowska, a University of Washington computer science professor and Microsoft watcher, has a very different take. “I think this re-org is great in terms of the company’s competitiveness and innovation potential,” he says in an e-mail. “The people from Live Labs who were doing research are now …Next Page »

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Last Thursday, we hosted a fantastic event on energy innovation at K&L Gates in downtown Seattle. The panel discussion—moderated by Michael Butler of Cascadia Capital and featuring Mark Aggar of Microsoft, Jesse Berst of Global Smart Energy, Jeremy Jaech of Verdiem, and Linden Rhoads of UW Tech Transfer—did not disappoint in its edgy treatment of energy issues in the Northwest (you can read the previews here). The panel touched on Seattle’s software expertise, policy and funding issues, and the near- and long-term commercial opportunities in cleantech.

For my money, though, the short company intros at the tail end of the program stole the show. Kirt Montague of Prometheus Energy gave a rousing talk on how his company is capturing methane from landfills, gas wells, and wastewater treatment plants and converting it into liquid natural gas for fuel. Chris Wheaton of EnerG2 followed with the story of his startup (”My name is Chris and I’m a recovering IT addict”) and how it’s diving into the energy storage market with ultracapacitor materials technology. Finally, David Grieger of Vu1 used props to show how his company has reinvented the light bulb, making it cleaner and more efficient.

The Xconomy Seattle shop has been pretty busy lately, so I’m just getting around to posting my thoughts on the event. This will be the opposite of comprehensive, so if you want the details, you’ll have to show up next time. Here are my top five big-picture takeaways:

1. It’s not just about the Northwest.
A premise of the event was to come up with steps the Seattle community can take to build leadership in energy. But as UW’s Linden Rhoads pointed out, “We also need to look away from Washington state and think about what will make really disruptive things happen as a nation.” Mark Aggar added, “Microsoft is used to having a global partner network. Proximity has never been a barrier to collaboration.” (From this, I took away that if Microsoft decides to fully invest in cleantech, it could be a powerful ambassador for the sector.)

2. It’s not just about software—but in the short term, it is.
OK, all of the panelists came from (or are still in) the IT industry. They acknowledged the most disruptive technologies may come from materials, biofuels, or other areas. But in the next five years, Verdiem’s Jeremy Jaech said, “With IT, let’s start by capturing how much [energy] is wasted. It’s technology that’s all available today, and it’s an untapped market….Let’s start with conservation.” Jesse Berst of Global Smart Energy disagreed somewhat, saying, “Conservation and efficiency isn’t the next big thing. …Next Page »

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On Monday, Microsoft announced it had appointed Maria Klawe, the president of Harvey Mudd College, to the company’s board of directors. Klawe’s appointment makes Microsoft’s board 10 members strong again, after longtime director Jon Shirley (a former Microsoft president and chief operating officer) stepped down last November. I had the opportunity to speak with Klawe yesterday about her new role, and what she brings to the Redmond software company.

Klawe (pronounced “Claw-vay”) has been president of Harvey Mudd, an elite college in Claremont, CA, focused on science and engineering, since 2006. Before that, she was dean of engineering at Princeton University. She had previously spent 15 years at the University of British Columbia in various leadership roles, including head of the department of computer science and dean of science. For good measure, she also spent eight years at IBM Research. (And for any math geeks out there, her Erdős number is 1.)

A highly respected mathematician and computer scientist, Klawe has done seminal research in areas like multimedia, functional analysis, human-computer interaction, and gender issues in information technology. University of Washington computer scientist Ed Lazowska, who has known Klawe for 30-plus years, touts her smarts and leadership. “She’s impatient and persistent in the best senses—she wants things to be done right, and she wants them to be done right now,” he writes in an e-mail. “She’s very strong on gender equity, which will be good medicine for Microsoft—although she’s by no means a one-issue person. Her only idiosyncrasy is that she paints watercolors during meetings.”

Klawe has a disarming modesty about her, though she says she was “difficult” and “arrogant” growing up (hard to believe now). Having followed her research over the years and talked with her a couple of times, I think it’s fair to say Microsoft is gaining a wealth of perspective on computing, basic research, and consumer-tech trends among young people—mainly through Klawe’s deep connections to student life at her school. She also has plenty of connections to Microsoft and the Seattle area, and some compelling thoughts on local innovation.

Here are edited excerpts from our conversation:

Xconomy: So tell us about your new role as a board member of Microsoft, and what it means to you.

Maria Klawe: I just started as a director. They voted me in on Monday, so I’m not assigned to any specific committees yet; it’s the middle of the year. So I have the generic responsibilities of a director. I attended my first board meeting on March 9. I’m absolutely thrilled about it.

X: How did the board appointment come about? Who were your connections, and had you been thinking about this for a while?

MK: Two things happened independently. I was thinking about the next role to play externally that would be a good learning opportunity for me, and good for the college. I discussed it with my board chair, and said, ‘I want to be on the board of a technology company.’ I made a list of three companies: Microsoft, Amazon, and Intel, in no particular order. Google already had two university presidents on its board. So that was on my to-do list for the next few years. I hadn’t actually told anybody else that was what I wanted to do.

The next thing that happened: I know people at Microsoft Research, foremost among them Rick Rashid [senior vice president and head of research]. I got an e-mail from Rick in October asking if we could talk by phone. Given our schedules, it wasn’t until halfway through November that we talked. He said, ‘Microsoft is thinking about putting an academic on its board, and your name has come up.’ Rick thought for sure I wouldn’t be interested; he seemed sorry to be the one to have to ask me. I said, ‘Actually, it’s on my to-do list, to go on a corporate board.’ He said, ‘Really? If you are interested, you should meet with Brad Smith [senior vice president and general counsel for Microsoft] and Bill Gates.’ It just so happened I was going to be in Seattle the next week. Lo and behold, on November 19, I had a meeting with Bill Gates and Brad Smith.

X: I’m guessing the meeting went pretty well. (No word on whether any watercolor paintings came of it.)

MK: As a university president, you want to talk about your college. For the first 45 minutes, Bill just asked me about Harvey Mudd. Towards the end of the hour, he said, …Next Page »

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Enclarity, a healthcare IT company based in Aliso Viejo, CA, announced today it has closed a $5.5 million Series C round led by Bellevue, WA-based Ignition Partners and Boston, MA-based Bain Capital Ventures. The funds will be used for R&D and product development. Enclarity makes software that helps companies manage healthcare provider information and records.

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It was a relatively busy week for deals in the Northwest, with plenty of action in software, biotech, and alternative energy.

—Seattle and San Francisco-based Twilio, a startup that provides cloud-based tools for building voice applications over the phone, raised its first institutional round of funding from Founders Fund and computing pioneer Mitchell Kapor. The amount was not disclosed. Twilio co-founder Jeff Lawson talked with me about the deal and how it will help the company expand its services.

—Seattle’s Principle Power, a wind energy startup, is in the process of raising $20 million to develop the world’s first floating wind farm in the deep waters off the coasts of Oregon and Portugal. Principle Power’s CEO, Alla Weinstein, wouldn’t say who the company’s strategic investors are, but she did say that no VC firms or Seattle investors are involved. The deal is expected to close in the second quarter of this year.

—Luke broke the exclusive story of Merck’s Stephen Friend raising $5 million in anonymous donations to pursue the vision of open-source drug development at a new Seattle nonprofit called Sage. The idea is to provide an open database of patients’ genomic profiles that researchers, doctors, and drug companies can access in order to make better drugs.

—Bellevue, WA-based Ignition Partners led a $10 million investment in Zenprise, a mobile-management software startup in Fremont, CA. Existing investors Bay Partners, Mayfield, and Shasta Ventures also participated in the round. Zenprise makes automated software to help businesses fix IT problems with smartphones.

—Seattle-based Arzeda, a University of Washington startup that designs custom-built enzymes, has secured commitments from OVP Venture Partners and WRF Capital to anchor its $12 million …Next Page »

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There’s a new tech-startup incubator in Seattle, and it’s called 8ninths. It doubles as an R&D lab, focused on social media and Web development software. The lab was established in September, and so far it’s still pretty stealthy. The principals aren’t talking to the press just yet, but their ideas and track record are intriguing enough to warrant a few words here.

8ninths is the brainchild of ex-Microsoft veterans Adam Sheppard and William Lai. Sheppard most recently worked in Ray Ozzie’s team as director of strategic business development for Microsoft Live Labs, an applied research lab within the company. Sheppard, a founding member of Live Labs, was responsible for branding, evaluating, planning, and proposing new opportunities and product strategies. His projects included Photosynth, a Web service that creates 3-D virtual environments from photos, and Deepfish, a zooming user interface for mobile Web browsing. No slouch himself, Lai spent 13 years focused on “intrapreneuring” in MSN, where he helped launch products like MSN Messenger and Microsoft Alerts.

The name “8ninths” comes from the assertion that 8/9 of an iceberg’s mass is hidden below the water’s surface. “We explore the non-obvious and the emerging,” says the 8ninths website. “Find new opportunities where others see none. Put ideas into practice and watch them evolve.”

Sheppard and Lai’s first startup out of 8ninths is called Lolligift. Launched late last year, the startup helps people organize and buy group gifts for holidays, weddings, office events, and the like. It combines social networking and personal recommendations with secure payment technology to make gift-giving more time-efficient and cost-effective.

We hope to tell you more about 8ninths’ newest projects soon—no word yet on investors or business models, or on what “incubator” really means in this case. In the meantime, Sheppard and Lai are well-known for their blogs about the Internet and social media. They have launched a bi-monthly newsletter called “Deep Dive,” in which they talk about interesting projects and trends they’re seeing, as well as their own projects. As they write on the 8ninths site (where you can sign up for their newsletter), “We explore the web, we show you what we find and tell you why you should care.”

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[Updated Feb. 25 with photos from TechFest 2009:]
Yesterday, I reported from Microsoft headquarters in Redmond, WA, on some high-level thoughts about the importance of corporate research from Craig Mundie, Microsoft’s chief research and strategy officer, and Rick Rashid, senior vice president and head of research. It’s TechFest week, which means tons of demos and meetings between Microsoft researchers, product groups, and top brass—see photos below and on the next page. (The event is restricted to Microsoft employees and invited guests.)

This annual event almost never happened. Rashid admits that TechFest was originally “something I wanted to avoid doing.” Before the inaugural fete in 2001, Rashid says, he had concerns about putting on such an extensive show. “I thought, ‘Boy, that’s going to be a lot of work. And who’s going to come?’” The first TechFest went on despite his objections, and the rest is history. I’ll give a rundown here of some of the most compelling demos I saw at TechFest 2009. They span the fields of Internet search, mobile imaging, advertising, and cleantech.

But first, another strategy issue. Given the economic climate that has resulted in Microsoft’s first major layoff, and the software company’s increasing competition with the likes of Apple, Google, and VMware, I wondered if there is more urgency these days to do research that pays off in products quickly—and whether that has led to any subtle changes in Microsoft’s research strategy.

The short answer is no. I talked with Hsiao-Wuen Hon, the managing director of Microsoft Research Asia, who previously spent many years in Redmond. “The issue Microsoft should worry about is the future, the technology,” Hon says. “That’s what we need to work on. The short-term stuff, the financial crisis, no. We want to be in the position to continue to worry about what we should worry about—R&D. The company has a firm commitment to that.”

As for any immediate adjustments, Hon says he’s been asked not to …Next Page »

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