Top Business Themes in 2007

By Harvey Mathews, president, SAO

How will this year's top business themes affect your business going forward?

Venture capital in Oregon
Over $200 million in venture capital was invested in Oregon-based start-up companies in 2007, up from just over $100 million in 2006. Jive Software, MyStrands, Ensequence and others enjoyed significant investments this year – and are putting this money into hiring developers in Oregon. All of this is without significant local investment by the $155 million dollar Oregon Investment Fund, which we hope to see get involved locally in 2008.

Patent law changes
Massive changes to patent protection were announced by the US Patent Office this summer, causing coronary issues for many in the software community. These changes could have limited the enforceability of patents and how broadly inventions could be claimed, required searches and justification of patentability, and limited continuations. These changes were recently stayed (read Ariel Rogson’s update), meaning that the final decision regarding these changes won’t be determined in 2007. Keep your attorney on speed dial…

Sustainability
It’s not new, but the region’s reputation for supporting sustainable companies finally met this year with state policy changes that make Oregon a hotbed of activity for solar, wind, wave and other companies to start, move and grow. Oregon software companies such as GreenPrint, Ecos Consulting and OpenSourcery are finding their niche in this category.

Acquisitions
Prosight, Saber, Kronos, Corillian and Tektronix were acquired by larger companies in ’07. Results of these acquisitions ranged from full integration within the parent company (usually meaning local layoffs) to completely freestanding new business units (Saber & Kronos are great examples).

Big corporate layoffs
Intel, Tektronix, Nautilus and Encompass TeleServices were among the tech-oriented businesses laying off hundreds of Oregonians in 2007. The SAO worked with many of those who found themselves among the “riffed” to find local jobs that match their skills.

Software as a service
The tipping point really occurred for software applications delivered to users from a “licensed computer” to a “software as a service” (SaaS) model. Per-user pricing, monthly payments, web-accessibility, scalability, revenue predictability, higher company valuation and easy updating were among the many reasons for companies small and large to adopt this model in 2007.

Dance of the giants
Large companies with an Oregon presence made big strategic plays this year: Google fully staffed its The Dalles facility. Microsoft fully funded the Microsoft Innovation Center at PSU. Intel beat back AMD. HP dominated Dell. IBM, Novell, Oracle and others consolidated funding behind the Linux Foundation (see below). Currently big plays are being made in the social networking space by some of these big dogs.

Open source goes south
The Open Source Development Lab merged with the Free Standards Group to become the Linux Foundation, with a center of operations in San Francisco and a mission to “promote, protect and standardize” Linux. Linus Torvalds and many of the developers still call Oregon home, but the organizational center of gravity has definitely shifted to California. That said, the OSU Open Source Lab in Corvallis has become the de facto leader in facilitating open source communities and the development and distribution of open source software.

Social networking
MySpace, Facebook, YouTube, LinkedIn and many other social networking sites dominated our consciousness this year. Big topics included how they can be used for business development, their influence on hiring practices, the legal implications for their use in hiring and what to do when your teenager is completely freaked out when he realizes that the two of you are both on the same social network.