Is Time Running Out for Non Performing, Venture Funded Enterprise Search Vendors?
June 12, 2015
Gee, impatient venture capital firms, grousing partners hungry for a payday, and agitated stakeholders, are these usually cheerful folks worrying about getting their money back with a hefty profit? My hunch is that some who wrote checks might be thinking about a vacation at WalMart instead of a couple of weeks bouncing around Europe or looking at animals in Africa from a Land Rover.
Navigate to “Something Is Rotting under Silicon Valley.” The point of the write up is that the sunshine and unicorn crowd may be getting nervous. The write up points out:
Only seven VC-backed tech companies have gone public so far this year, with just one more (Fitbit) currently on the pricing calendar for June. At this rate, 2015 could go down as the slowest year for VC-backed tech IPOs since the throes of the financial crisis. Moreover, there have been only two strategic sales of VC-backed tech companies valued at over $1 billion (Lynda.com to LinkedIn and Virtustream to EMC).
Forget training (online and walking around the parking lot). The worry may be that some outfits which have sucked in tens of millions of dollars may have — gasp! — liquidity issues and a downward valuation.
The article states:
A less charitable rationale is that too few of these companies [VC bets] have imposed the tough internal discipline — particularly in terms of burn rate — that public equity investors demand. Either way, limited partners in VC funds aren’t getting paid.
What about search? With the implosion of the proprietary search sector and the vaporization of substantive news reports about bubbling sales and profits, the enterprise search sector looks like a The Man with No Man desert scene. The LinkedIn enterprise search groups are somewhat low key. Hello, is anyone there? The automated Paper.Li enterprise search paper is stuffed with information about Big Data. More importantly, Attivio has pivoted… again. Coveo whips the customer support thing. Lucidworks is promising to have a mission. The European enterprise search vendors are making little noise. When did you hear about Exalead, Intrafind, or the stub of Fast deep in the folds of Microsoftland?
My hunch is that this Fortune Magazine article has identified what may be a “Houston, we have a problem” moment for venture funded search vendors. Is there a fix? Nah, just use Elastic or another open source solution. Good news for those who need utility search. Bad news for the bankish MBAs who bet that certain investments would just spin cash.
Here’s another passage I noted in the article:
If I’m a venture capitalist, it might be time to stop staring at the sun and take a peek at the darkening clouds.
Yep, might be time to check out the actual weather, not the pretend environment in those PowerPoints.
Stephen E Arnold, June 12, 2015
Comments
One Response to “Is Time Running Out for Non Performing, Venture Funded Enterprise Search Vendors?”
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I somewhat share your opinion about VC-funded outfits – but Elastic are also VC-funded, so the future of Elasticsearch is also linked to this, especially as Elastic control the development process. Solr is under the non-profit Apache Foundation though, so is a little less dependent on the whims of VCs.