What is the computer industry's greatest challenge in the next three to five years?
If you look at the personal-computing industry, only a fraction of the world has participated in this arena. I think it's a huge, huge unit market. Companies like Dell, Microsoft and Intel -- they're the primary members of that environment. It's an unfortunate situation that only Intel and Microsoft really make money. The rest, with Dell as an exception, don't make any money. I think the challenge for Intel and Microsoft is to find some other platform in which to grow, other than the personal computer.
What do you make of the upheaval in the business-software industry, of Oracle's hostile bid for PeopleSoft, and of so many other players merging or struggling? Is it changing the way venture capitalists approach and think about start-ups in this market?
Things constantly evolve in capabilities and directions that didn't exist before. Why would software be any different? There will always be new ideas that large entrenched companies don't think of.
What about the claim by [Oracle chief executive] Larry Ellison that the industry will consolidate around a few big players, namely Oracle, Microsoft, IBM and SAP?
I'm in the Marc Andreesen camp against the Larry Ellison-Hasso Plattner camp. If you look at their offerings, neither has a flagship product in the customer relationship management market -- 10 years later. So I think they are like all big companies, filled and riddled with not-invented-here. They are unable to recognize innovation and they are very late to do what they claim they're going to do. DiCarta, iMany -- there are all these small, flourishing companies started in late '90s that are doing very fine, thank you very much. That said, Oracle is interesting and one of my favourite companies.
Why?
Because we financed it and made a lot of money. But also, I'm a great admirer of the kind of raw-boned entrepreneur that Larry Ellison is. He is willing to speak out even if he's wrong occasionally.
Are you adjusting your expectations at all for some of the software companies you've invested in, such as Aceva, diCarta and Traiana?
We will continue to start software companies in categories like the one diCarta is in that are differentiated. The whole thrust of our conviction is that the future is an evolutionary future. New applications are going to emerge and customers will want to do new things.
What about Germany's SAP? It seems to dominate the global market.
It's an interesting company, located intellectually in central Germany. It has the historic flexibility of the Teutonic character. They do it their way, and the customer has to do it and buy it the way they make it. They are a "do it my way or forget it" company and the prices are astronomically high. They're hard to do business with, and when in doubt they deal in FUD [fear, uncertainty and doubt]. SAP is the noisiest non-participant in the business.
However, the founders are largely out of that company. It will be interesting to see how or if they change with those guys gone. The same with Microsoft when Gates and Ballmer are gone.
Which technology CEO do you most respect?
Steve Jobs. Steve has managed to simultaneously run two entirely dissimilar companies -- Pixar, and he is also running the resurging Apple. I've long been a great admirer of his.
Which company or technology is most underrated but has or will have a huge influence?
I've always been mystified by the critically important disk drive industry, without which the PC is a useless device. You have to be brilliant in electronics, you have to be brilliant in magnetics and you have to be brilliant in mechanics to get all that memory capacity in a very little place and do it for next to nothing. That market has never been rewarded financially for its brilliance. Yet the contribution is huge. Cell phones, handheld products, PCs... they all go nowhere without that fundamental storage capability.
Has anyone learned any lessons from the dot-com bubble?
We should look at the people in the public markets. They never learn the lesson. The game is rigged in their favour. But yes, there was a flaw in the companies people financed. Will we make mistakes again? Yes. But we'll make different mistakes. The people that started all those dot-com companies? That's over. Most people will remember not to make that mistake again.
I got to Silicon Valley in 1959. Nothing is revolutionary; it's evolutionary. Look the sequence of Intel microprocessors. It's all predictable. The nature of silicon and software and storage go hand in hand. In the case of software, you just have to be more clever about the nature of the application. So all these things kind of tick along, feeding off each other.
Talkback
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