Where are they now?

We look back at 50 start-ups to watch, 1998-2003

We look back at 50 start-ups to watch, 1998-2003

In the past five years, the 50 start-ups we’ve designated as those “to watch” — 10 per year — have done it all: garnered sizable investments, pulled off mega IPOs and landed big buyouts by established network vendors. Of course, we’ve seen some shattered dreams, too.

Hundreds of millions of dollars — $216 million since 2002 — have been spent making the technology ideas conjured up by these start-ups into deliverable products. We’re still waiting to see the fruits of some of these labors, as a couple of our picks (namely, Procket Networks and Maranti Networks) still haven’t said much about their impending products, much less shipped any. And we’ve seen some of the effort come to naught, as four start-ups folded amid tightening economic conditions, with at least one more, Surgient Networks, on the verge of collapse.

Still, far more of the start-ups — 58% of our picks — remain in business, four as publicly traded companies, including NW200 No. 125 Akamai Technologies, No. 95 Foundry Networks and No. 162 Red Hat Software. And one-third of our picks became the target of acquisition. Just late last year, IBM grabbed Access360 for its access-rights management software and Yahoo announced its intent to acquire Inktomi for its search capabilities.

As to those still operating independently, many remain in start-up mode, still establishing a name for themselves. But others have become well-known in their respective fields — industry watchers appreciate Bowstreet for its XML-based e-business software, Ecora for IT risk management software and ForeScout Technologies for intrusion prevention. And more than a half-dozen of the start-ups have reshaped themselves. SilverBack Technologies is no longer a management services provider but a management tool vendor. Top Layer Networks is now a security vendor rather than an enterprise switch maker. NoWonder stopped being an online technical support site and became a provider of collaborative CRM software called ePeople.

Adaptability is clearly a good characteristic for a start-up these days, as is patience. Start-ups today must grow slowly and smartly, exercising business acumen to outlast this period of minimal IT spending and funding shortages.

For details on the status of any company, click on the company name.

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Copyright © 2003 IDG Communications, Inc.

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