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The hottest startups are targeting the enterprise

Mark Siegel, managing director, Menlo Ventures, | Feb. 13, 2013
While some of the most successful consumer Internet companies are capturing the headlines today, more than 70% of venture exits in the last two years valued at over $500 million have been in the enterprise sector.

Big data

The growth in data is the other phenomenal, exponential wave we are riding. Five exabytes of data are now created every 10 minutes, compared to every two days just two years ago, Google's Eric Schmidt was quoted as saying in 2010. Five exabytes is 5 billion gigabytes, an amount equal to the data crated from the beginning of human evolution until 2003.

Technologies like Hadoop, developed and made available as open source from Yahoo, Google, Facebook and Amazon, are becoming a new layer of commercial infrastructure to cheaply and efficiently store, search, and analyze information in volumes and at speeds never before imagined.

We will see many new investment opportunities in vertical analytic applications. For example, Menlo Ventures portfolio companies like Comprehend Systems, DataXu, eXelate and ParAccel are using "big data" for applications in clinical trials, online advertising and financial analysis and seeing huge demand for the new capabilities they offer.

I cannot remember another time in 16 years in venture capital when there were so many disruptive technologies coming to maturity at the same time. Certainly, these profound shifts in computing technologies do not happen often, but it does seem like they are occurring on a more rapid cycle.

If this is true, then there will continue to be an abundance of opportunity for emerging growth companies. But it also means they'll need to develop difficult, defensible technology very efficiently, and grow to scale and profitability more rapidly than ever before.

 

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