DEMO start-ups go for the cloud

Even with an innovative idea, raising venture capital is tough these days

Sixty-five companies will debut products at DEMO this week, with a heavy focus on cloud computing.

Sixty-five companies will debut new, innovative technologies at DEMO Spring 2010 in Palm Desert, Calif., this week, and not surprisingly there's a heavy focus on cloud computing

"The cloud is big -- every part of the cloud is getting mined or exploited," says DEMO conference chief Matt Marshall.

While DEMO products are typically consumer-focused, there are numerous products that will be useful to business folk. For example, start-up FathomDB is unveiling a relational database that runs in the cloud, with pricing based on capacity. "The price point is going to be really low," Marshall says.

25 awesome tech products at DEMO

Another company called Gwabbit, which appeared at last year's DEMO with an e-mail contact management system for Outlook, is back at DEMO a second time to introduce a cloud service that automatically syncs contacts across multiple systems.

"Not only is it grabbing your contacts, but it's handshaking from the cloud to the various services you have as a user," such as LinkedIn and Facebook, Marshall says. "It's handshaking with each one of these to keep the cloud live and synced with all your contacts and changes."

A DEMO company called Teneros also focuses on social networks, but with an enterprise angle. Its software, called Social Sentry, lets businesses monitor employee activity on sites such as Facebook and Twitter. The service tracks only public posts, with the idea being to make sure employees aren't releasing sensitive information.

Teneros is likely the most advanced company at DEMO, having raised almost $100 million from investors, Marshall says. Marshall, who is in his first year as the head of DEMO, is naturally bullish on the lineup of companies he's chosen. "I was getting excited as I was going through the list," he says. "There are just so many damn awesome companies."

But this is a tough time for start-ups looking to raise venture capital, notes Jeff Crown, president of DEMO presenter VenueGen. The start-up has built a 3D virtual meeting platform with $2 million from angel investors, and is trying to raise a $5 million round to expand the company.

"It's never really easy to launch a company," Crown says. "At the end of the day, anybody who invests in a company is going to invest in the team, people who have there and done that."

Venture capitalists are looking for companies that are both targeting a rich market, and have already demonstrated progress in winning over customers, Crown says. "The venture capitalists want to see customers, revenue and traction, and that's a little bit different than in the past when they were willing to fund prototype and research ideas," he says.

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Copyright © 2010 IDG Communications, Inc.

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