So long . . .

Those of you who were becoming regular readers of Colorado Tech Times earlier this year may have noticed the sudden lapse in postings several months ago.

I realize it’s a bit belated, but I’d like to finally offer some explanation for my sudden vanishing act.

No, it wasn’t a case of Fat Tire overdose (see my last post, below).

In May, I accepted a job as senior writer for the Loomis Group, a San Francisco technology PR firm. Since then, I simply haven’t had the time to make further posts to this blog. And considering some other duties I’ve taken on since then, that doesn’t appear likely to change anytime soon.

Oddly enough, the blog continues to draw readers – as many as 50 a day. So even though I’m no longer posting additional material to this forum, I’ve decided to leave the site and its postings online as a reference for those seeking information about Colorado’s technology industry.

It was fun. I’d love to do it again sometime when time permits. But for now, you’ll have to look elsewhere for news on Colorado’s burgeoning tech sector. For starters, I’d suggest checking out some of the links along the right side of this page.

Best,

- Russ -

Colorado’s craft beer rules!

Some readers may argue that brewing beer isn’t really a high-tech occupation.

To that I can only say: Bah humbug!

My college roomate and I tried brewing our own back in the late 1970s — cooking the ingredients on the kitchen stove, bottling it in previously used Hamm’s bottles and aging it in a closet. The disastrous results convinced me that brewing is truly a complex, highly technical process.

And besides, how many software programs, semiconductor designs and computer systems do you think would ever have been completed without frequent sessions of “beer therapy?”

In any event, Coloradans have reason to be proud of our homegrown craft brewing industry.

The Boulder-based Brewers Association (see http://www.beertown.org/) this week released a list of the country’s top 50 “craft brewers,” a term that refers to the smaller, independent and traditional breweries that have become the fastest growing segment of the U.S. brewing industry. The association reports that sales of craft beer in U.S. supermarkets grew 17.8% in 2006, compared with just 10% for wine and a mere 2% growth for “ordinary” domestic beer from the industry’s big four producers (Anheuser-Busch, Miller, Coors and Pabst).

Colorado, it turns out, is home to five of the 50 largest U.S. craft brewers. Only California, with seven top-50 brewers, has more. (If all the smaller brewers are counted, Colorado actually has closer to 100 commerical micro-breweries)

Fort Collins’ New Belgium Brewing Company Inc., maker of the extremely popular Fat Tire beer, ranks as the third-largest U.S. craft brewer in terms of 2006 sales. Actual sales figures were not disclosed as part of the rankings, but a Denver Post article last July reported that New Belgium brewed about 370,000 barrels of beer in 2005, while Inc. magazine reported last year that the progressively managed, eco-friendly company had 2005 sales of about $70 million.

Following is a list of Colorado’s Top-50 craft brewers, and their rankings:

      Company…………………City……….Rank

_______________________________

• New Belgium…………………Fort Collins……3
• Rock Bottom Brewery…..Louisville……..24
• Flying Dog…………………….Denver…………29
• Odell Brewing……………….Fort Colllins….31
• Breckenridge Brewery…..Denver………….36
• Boulder Beer…………………Boulder…………41

Source: Brewers Association

_______________________________

“Beer made by small, independent and traditional breweries is definitely an American success story,” says Paul Gatza, Director of the Brewers Association.

With just under 1400 small breweries the segment eclipsed 6.7 million barrels in 2006. The fastest growing craft beer sector in 2006, with a 16% sales increase, was microbreweries (those under 15,000 barrels a year). Total craft beer industry sales have grown 31.5% over the past 3 years.

The Denver Post reported that brewers contribute $3.7 billion a year to this state’s economy, although the bulk of that no doubt comes from the Coors and Anheuser-Busch operations here.

Nonetheless, my hat’s off to all the dedicated beer makers whose bubbly brews make our lives — and the technology industry — so much better (when consumed in moderation). I plan to open an ice-cold Fat Tire a few hours from now in celebration.

Simtek’s Q1 sales slip

Colorado Springs-based Simtek Corp. (Nasdaq: SMTK) expects to report sequentially lower sales during the year’s first fiscal quarter, for which full earnings results will be announced April 27.

The non-volatile memory chip company announced this week that it expects Q1 2006 product revenue to be about $8 million, 12% less than the record $9.1 million mark reached during last year’s fourth quarter.

Despite the decline, the company’s projected Q1 sales would be 70% more than last year’s first quarter. Simtek — which reported its first quarterly profit in nearly six years during last year’s fourth quarter — nearly tripled its annual revenue during 2006 to $30.6 million, compared with $10.4 million in 2005.

The past year has been eventful for Simtek, which was founded in 1987 and struggled for years to develop a niche market for its unique nvSRAM technology, which allows memory chips to retain stored data when their power is shut off, while also operating at extremely fast speeds.

Last October the company completed a 1-for-10 reverse stock split, paving the way for a Nasdaq stock listing this January 10.

In December Simtek acquired the nvSRAM business of Germany’s Zentrum Mikroelektronik Dresden (ZMD) (which originally licensed the technology from Simtek) for $10 million in cash and stock, and began shifting ZMD’s chip customers to its own nvSRAM chips. In January it raised $11 million in a private share placement, with most of the proceeds used to pay for the ZMD deal.

The company also filed for 10 patents in January, and announced plans to open a design and business-development center in San Diego.

Simtek employs about 45 people in Colorado Springs. Its chips are used in computer servers, GPS navigation systems, robotics, copiers, avionics, radar, “smart” weapons and other products.

Among its competitors is Colorado Springs-based Ramtron Corp. (Nasdaq: RMTR), which uses a different technology, ferroelectric random access memory (FRAM), to produce non-volatile chips.

Wind-energy stock tips

Colorado features prominently in an article this week on wind-power transmission stocks in the AltEnergyStocks.com blog.

Written by investment advisor Tom Konrad, who also serves as treasurer for both the Colorado Renewable Energy Society and Ratepayers United Colorado, the article identifies several companies (though none in this state) that could benefit from increased demand for transmission facilities. That’s assuming, of course, that the current boom in wind power and other alternative energy sources continues.

The article mentions Colorado’s recently passed Senate Bill 100, which requires regulated electric utilities to identify — and develop plans to remedy — areas of high wind-energy potential where a lack of transmission capacity could hinder development. Gov. Bill Ritter signed the bill into law two weeks ago, along with House Bill 1281, which requires state utilities to obtain at least 20% of their electricity from renewable energy sources by 2020.

The AltEnergyStocks blog also ran an article last week on stocks that could benefit from wind turbine supply constraints. Investor’s Business Daily mentions some of the same stocks in a similar article today.

Turbine makers such as GE Energy are reportedly booked solid with orders well into next year, despite the industry’s aggressive plans to expand production. Denmark’s Vestas Wind Systems, for instance, announced plans last month to build its first U.S. wind turbine blade factory in Windsor, Colo., near Fort Collins.

Surging demand for wind energy may pose a challenge for utilities and potential wind farm investors, but for transmission equipment suppliers, as well as Vestas, GE and other turbine suppliers, the good times appear to be just beginning to roll.

Denver hosts Green Grid meeting

Denver will play host next week to the first technical summit of The Green Grid, a non-profit consortium dedicated to advancing energy efficiency in computer data centers.

Energy use is a growing concern for Google, Yahoo, Microsoft and other big computer users, which are building huge data centers around the globe to handle soaring demand for broadband Internet services. Google engineer Luiz André Barroso has predicted, in fact, that energy costs may soon surpass the cost of computing equipment for large users.

The April 18-19 Green Grid event is expected to bring together leading technical experts from founding companies AMD, Dell, Hewlett-Packard, IBM, Intel, Microsoft, and Sun Microsystems. Longmont-based Copan Systems, Inc., a privately held maker of energy-efficient disk storage sysytems, was one of nearly 30 additional new members announced this week, including Brocade Communications, Cisco, Juniper Networks, Novell, QLogic, Texas Instruments and others.

This will be the first event for the organization since its launch this February. The two-day summit’s three main goals are: how to define and measure data-center efficiency, how to build more efficient data centers and how to improve the efficiency of daily operations.

EE Times reports that one possible solution the group may debate is shifting data centers from AC to DC power. While Intel has been touting that idea recently, Google has been pushing another approach calling for the computer industry to replace a wide variety of multi-voltage power supplies with standard, more efficient 12-volt power supplies.

For more information, see the Green Grid website: http://www.thegreengrid.org/.

NREL prizewinner: solar at ‘critical’ stage

Lawrence Kazmerski, director of the U.S. Department of Energy’s National Center for Photovoltaics at the Golden-based National Renewable Energy Laboratory (NREL) sees the U.S. solar energy industry at a “critical stage,” with future progress dependent on continued government and university research.

Kazmerski — who spoke Thursday at the University of Delaware after receiving the Karl Böer Solar Energy Medal of Merit and a $40,000 prize — says the energy department’s recently unveiled Solar America Initiative was a major turning point for solar energy in this country. Last month the DOE announced it would provide up to $168 million for 13 industry-led solar energy research projects.

“It’s kind of like Nixon going to China,” he said in an article reported by the university’s daily newspaper. “A lot of people would not associate President Bush with renewable energy and anything like this, but he did make this initiative, part of which is in solar.”

Kazmerski said the new initiative positions the United States to be “a major player” in developing affordable solar energy technology, but notes that federal funding for solar technology development is just starting to recover from years of cutbacks. Last year’s $139 million merely brought the level of federal solar research funding even with what it was in 1982.

“Photovoltaics is at a tipping point, and right now it’s at a very critical stage [in] what happens and how fast this technology disseminates,” he said.

Kazmerski joined NREL’s predecessor, the Solar Energy Research Institute, in 1977 and has been director of its photovoltaics center since 1999. He also has been an adjunct professor at the University of Colorado, Colorado School of Mines and the University of Denver.

He said he plans to donate the money from the award to start a program for university students to conduct research at NREL.

Sorry, tech visas are all gone

An article in yesterday’s Electronic News notes that the fiscal 2008 U.S. quota for H-1B visas — which allow scientists, engineers, computer programmers and other skilled workers from around the world to to work here for limited periods — was filled in just two days.

Visa applications were accepted starting April 2, and within two days the U.S. Citizenship and Immigration Services (USCIS) received about 150,000 applications — more than twice the maximum 65,000 new visas alotted for the entire upcoming year. An additional 20,000 applicants with a US-earned masters or higher degree are considered exempt from the cap, but the USCIS is not sure yet how many of the initial rush of applicants met that criteria.

Meanwhile, I’d estimate that close to one-fourth of the enrollment in my children’s Colorado schools these days are the children of illegal Mexican and Central American immigrants (that’s just the illegals — the total Latino school-age population is closer to 40%). These are not, for the most part, the children of H-1B applicants.

You can’t blame these families for wanting to come here, where the jobs are plentiful and the quality of life is far better than in their own poverty-stricken countries. Yet this influx of illegal immigrants is putting a real strain on our schools, health care and law enforcement systems.

You have to wonder what U.S. immigration policies (or the lack thereof) are trying to accomplish.

Clearly there are legitimate questions that need to be addressed about the efficacy and aims of the H-1B program, which if not properly regulated could depress wages and cost the jobs of U.S. scientists and engineers.

On the other hand, our universities simply aren’t turning out enough top-notch graduates in these fields, at least not graduates with U.S. citizenship, and the only way many of our companies are getting by is by recruiting foreign scientists and engineers.

Boulder venture capitalist Brad Feld, for one, says he’s constantly trying to find enough qualified software developers for companies he’s investing in. “There is just no reason why there should be a quota on this type of H-1B visa,” he writes in his Feld Thoughts blog.

What’s more beneficial to the U.S. economy — skilled scientists and engineers who boost the productivity and innovation of our knowledge-based economy, or the mostly uneducated throngs that pour across our southern border in search of menial labor?

Why are the best and brightest applicants limited to a relative trickle, while the doors are thrown virtually wide open for millions of the world’s poor, huddled masses?

Immigration is a complex, emotional issue that could emerge as a major factor in next fall’s presidential elections. And I don’t pretend to have all, or even most, of the answers.

But it’s time for us to begin dealing rationally with the nearly insatiable desire of foreign nationals to work here, and U.S. companies’ eagerness to employ them. Surely we can be smarter and more deliberate about harnessing that supply and demand, and directing this remarkable influx of human talent towards goals that further the best interests of the United States.

AirCell still expects in-flight cellular service

Despite yesterday’s Federal Communications Commission (FCC)  decision not to lift a ban on cellphone use on airliners, Louisville’s AirCell LLC is still hoping to offer in-flight cellphone service in the not-too-distant future.

In a Wall Street Journal article yesterday, AirCell’s CEO Jack Blumenstein says that U.S. airlines should soon begin offering in-flight Internet service, instant messaging and wireless email. And while government approval of cellphone service is now stalled, “the likelihood of cellphone service on airplanes coming into play is still very high,” he says.

Privately held AirCell, founded in 1991, paid $31.3 million at an FCC auction last June for three megahertz of radio frequency spectrum to be used for in-flight Internet service. Both the FCC and the Federal Aviation Administration (FAA) have approved the company’s Internet service, but not its propsed cellphone service.

The FAA reportedly is concerned that cell phones and other portable electronic devices could interfere with navigational and communications systems, while the FCC worries that airborne cellphone signals could overload networks on the ground. The Journal reports, however, that some 30 countries have now given telecom approval for in-flight calls, although air-safety reviews are still ongoing. Quantas, Emirates and Ryanair are reportedly hoping to begin offering in-flight cellular service before the end of this year.

Meanwhile, AirCell is constructing a network of 80 to 100 ground towers across the U.S. that could eventually provide both voice and data in-flight services. It is reportedly pitching the service to multiple airlines, although no customers have been announced. The company, which currently provides satellite phone service to private jets, holds a U.S. patent on technology to allow in-flight use of both GSM and CDMA cell phones.

AirCell’s North American air-to-ground broadband system is scheduled to debut in early 2008, allowing airline passengers to surf the Internet, use e-mail, and connect to corporate networks using WiFi-equipped laptops, handsets and other devices. It reportedly costs $100,000 to equip each airliner, although the process is relatively simple, and can be done by maintenance workers overnight.

Boeing spent $1 billion several years ago to launch its Connexion in-flight Internet service, but closed the business last year after users balked at paying steep charges of $10 per hour, or $27 per 24-hour period. AirCell’s Blumenstein says his company plans to charge no more than $10 a day to passengers, who also will be able to use their memberships in existing WiFi service programs like T-Mobile, iPass and Boingo.

CU prof questions private equity profits

During a week when Kohlberg Kravis Roberts & Co. agreed to pay $25.6 billion for Greenwood Village-based First Data Corp. — the second- biggest leveraged buyout ever — some are questioning whether private equity firms are paying their fair share of taxes.

And one of the voices speaking in favor of increased taxation is University of Colorado Law School Associate Professor Victor Fleischer.

An editorial in Monday’s New York Times cites a recent paper by Fleischer presenting several arguments against the current U.S. practice of taxing private equity “performance pay” as capital gains, rather than as ordinary income. The distinction is important because capital gains are taxed at a modest 15% rate, less than half the rate of most other corporate and personal income.

Reuters, Bloomberg and Wall Street’s Dealbreaker blog also have picked up on Fleischer’s blog comments regarding the Blackstone Group’s proposed public stock offering, which is controversially structured to allow it to keep its favorable tax rates.

Private equity certainly looms as a large and tempting target these days. But what bothers most critics is not so much the favorable tax rate on the returns from “at risk” money used to fund the buyout deals. What really draws their ire is the industry’s customary “two and twenty” — a hefty 20% of deal profits and 2% of funds under management — that private equity managers collect for their services. Those fees also are taxed at the favorable 15% capital gains tax rate, rather than as ordinary income.

“This quirk in the tax law allows some of the richest workers in the country to pay tax on their labor income at a low rate,” writes Fleischer.

Private equity investors such as KKR, Blackstone, the Carlyle Group and Texas Pacific Group, having raised hundreds of billions of dollars in cheap capital in recent years, are now pouring it into a flurry of acquisitions at a record-setting pace. There’s much debate about whether deal values are getting too high, and about the ultimate social impacts as hundreds of companies are privatized, broken up, downsized and re-sold, often for huge profits.

Those issues aside, however, one reason for the recent private equity boom is almost certainly the favorable tax treatment these deals, and their architects, receive.

The New York Times editorial calls for Congress to address the issue of private equity’s “preferential” tax rate. And Sen. Charles Grassley (Rep.-Iowa) is reportedly considering just that. British lawmakers also are considering tax changes to collect a bigger share of private equity profits.

Fleischer, writing this week in the Conglomerate business law blog, says he’s “agnostic” about whether the preferential capital gains rate on private equity investment capital is appropriate. “But I certainly agree that allowing that preferential rate for capital gains on returns to human capital (i.e. labor income) is excessive,” he says.

Buckets of cash for Photobucket?

The blogosphere and the mainstream press are abuzz with speculation about the expected sale of Denver-based photo-sharing startup Photobucket Inc., and how much the fast-growing company may be worth.

Michael Arrington’s TechCrunch blog reports that Photobucket has hired investment bank Lehman Brothers to explore a possible sale of the company, which he says could be worth $400 million or more. Pretty amazing for a company with less than $10 million in sales last year.

Arrington hasn’t disclosed the source of his revenue data and projections for the company, which leads some to suspect the bankers may have leaked the data to help prime the market for a sale. His data, which includes no profit/loss information, indicates that Photobucket’s sales climbed from $4.4 million in 2005 to $9.3 million in 2006, and should reach $32 million this year. About 74% of Q4 2006 sales reportedly came from advertising.

Commentators at ValleyWag, HipMojo and the Daily Deal’s blog doubt that Photobucket can sell for as much as $400 million. Blogger Simon Brocklehurst, on the other hand, sees potential for an even higher price. “If pushed into it by a bidding war, I’d say that someone might be prepared to pay north of $600M – maybe even up to a $1B,” he writes.

So exactly who and what is Photobucket?

The company — which has its technology, development and operations functions in Denver and a business and sales office in Palo Alto, Calif. — basically allows people to store a limited number of photos and videos online for free, or larger amounts for $25 yearly. The stored images can then be linked to from anywhere on the Internet, and are especially popular with users of social media websites such as MySpace and Facebook.

Photobucket’s website currently reports 39 million registered users (it’s reportedly aiming for 60 million by year-end), 17.6 million unique site visitors per month and 7 million images uploaded daily.

In an effusive article last week, Fortune senior editor David Kirkpatrick called Photobucket “the most important site on the Internet that hardly anybody understands.” Critics worry the company could be hurt if MySpace and Facebook were to stop accepting its links. But Kirkpatrick sees that as an improbable prospect, which would likely provoke a “user revolt.”

Co-founders Alex Welch and Darren Crystal were software engineers at Denver’s Level 3 Communications, Inc. before starting Photobucket in 2003. CEO Welch, 30, earned a business administration degree from Colorado State University. Chief technical officer Crystal studied electrical engineering at the University of Texas and was a network engineer for computer maker Dell Inc. before joining Level 3.

The two used savings, credit cards and money borrowed from Welch’s parents to start the company in Crystal’s basement. Welch writes in a recent article for the eventuring website of the Ewing Marion Kauffman Foundation that they got early financing from a neighbor’s friend at Guaranty Bank in Longmont, after venture capitalists turned them down. Later venture funding eventually came from New York’s Insight Venture Partners and MenloPark, Calif.-based Trinity Ventures

Red Herring magazine reported recently that Welch has a previous connection with photography. He used to work for a Colorado rafting company, taking pictures as boats floated by. Today his company operates the world’s largest photo-sharing site, which as of February employed about 60 people, including 45 in downtown Denver.

Secure64 Software attracts attention

Greenwood Village-based Secure64 Software Corp. continues to attract impressive press coverage for its Internet security software.

Last week the company was featured in a Wall Street Journal article describing how the latest computer processor chips from Intel and AMD offer new ways to protect servers from computer viruses and other attacks. The article quotes Colorado State University computer-science professor Daniel Massey, who has been running the Secure64 software for more than a year, as saying: “nobody can get into this box.”

Another article this week in SEO/SEM Journal examines, but does not confirm, the company’s claim to offer the world’s only “genuinely secure” operating system. Other recent coverage of the company has appeared in Network World, c/net and The Register.

Secure64 claims that its $9,995 Secure64 DNS software — the initial version of which runs only on Itanium-based Hewlett-Packard Integrity rx2660 computers — can withstand denial-of-service attacks while still responding to more than 100,000 legitimate queries per second.

The software, which has several patents pending, protects domain name system (DNS) Internet directories while allowing users to manage email, web access and e-commerce services.

It’s no accident that Secure64’s first products target HP’s Itanium-based servers. The company’s chief technology officer, William Worley, was an HP Fellow and chief scientist and one of the key architects of Itanium technology, which was developed in Fort Collins.

The company, which started in 2002 and now has 23 employees, has raised $7.5 million in angel funding and reportedly plans to seek $5 million to $10 million in additional funds soon.

Springs group seeks more biotech buzz

When it comes to biotech, Colorado Springs tends to be overshadowed by the bigger life-sciences industry clusters up the road in Denver and Boulder. But the Springs’ biotech industry appears to be building momentum.

This week a new chapter of the Colorado Bioscience Association (CBSA) launched in Colorado Springs, with support from the University of Colorado at Colorado Springs (UCCS) and the Colorado Springs Economic Development Corp. (EDC).

The group, which met for the first time Wednesday, aims to provide support to existing bioscience companies, help recruit new ones and work with UCCS to commercialize new technologies.

“With over 25 bioscience companies already here and more in the pipeline, we will continue to invest in this industry,” says EDC CEO Mike Kazmierski. “We see it as a vital part of our future.”

Colorado Springs bioscience companies include, among others: Aspire Biotech, HemoGenix, Nextgen Pharmatechnologies, Analytic Development Corp., and Pyxant Labs Inc.

For more CBSA information, contact Executive Director Denise Brown, Tel: 303-592-4073, or http://www.cobioscience.com.

Revolutionary running shoes?

Inside Triathlon magazine has an interesting interview this week with Danny Abshire, co-founder and owner of Boulder’s Newton Running, which is trotting out a new line of running shoes at this weekend’s Ford Ironman 70.3 race in Oceanside, California.

The company claims that its shoes — named for Sir Isaac Newton and his laws of physics — return an average of 58% of a runner’s energy to their stride compared with typical running shoes’ 42% energy return. In development for a decade, they use a so-called “active membrane” that stretches on impact and then returns to its original shape, pushing “actuator lugs” in the soles outward and returning energy into forward propulsion.

Most runners, however, will have to adjust their technique from landing heels first, to landing on their forefoot, which the company contends is how we all naturally run when barefoot.

Newton’s running team of elite triathletes claims to be running faster and covering more ground since switching to the new shoes.

Four models are available initially, in limited sizes and quantites, through Newton’s website, www.newtonrunning.com, and at Abshire’s Active Imprints shop in Boulder. Prices range from $155 to $175 a pair.

AeA issues U.S. tech warning

Today, for the second time in two years, the American Electronics Association (AeA) issued a strident call for U.S. education reform, greater investment in basic science and technology research and a more lenient visa system to encourage the world’s best and brightest engineers and entrepreneurs to come here to pursue their careers.

In a report entitled “We are still losing the competitive advantage” (see full pdf copy here, or executive summary here), the Santa Clara, Calif-based organzation noted that although awareness of America’s lagging tech competitiveness appears to have increased, very little actual progress has been made.

Congress introduced numerous bills during the last session calling for visa reform, increased R&D investment and improved science, technology, engineering, and math education. But as the report notes: “Not one of these bills was passed or ever seriously debated.”

In a letter accompanying the report, AeA CEO William Archey and Chairman Timothy Guertin describe the United States as “the proverbial frog in the pot of water, oblivious to the slowly rising temperature of a world catching up to us. Today, the heat is still rising and we are still in the pot. There is hope that we are finally feeling the heat and are poised to do something about it. Hope, but not certainty.”

Numerous signs of declining U.S. competitiveness are evident right here in the Mile-High state.

AeA recommendations

Today’s AeA’s report on U.S. competitiveness offers two tiers of public-policy recommendations, ranked in order of priority.

The first tier suggests immediate changes that already have been introduced in various bills and appear to have widespread bipartisan support. The second tier is more challenging, having generally not yet been introduced as legislation, or having the same degree of bipartisan support. Nonetheless, the group describes these longer-range measures as “equally critical” to long-term American competitiveness.

1st Tier Recommendations:

• Dramatic improvements in U.S. education
  • Improve K-12 math and science instruction
  • Sustain, strengthen, and reauthorize the No Child Left Behind Act
  • Promote undergraduate and graduate science, technology, engineering, and math education
  • Create a Human Capital Investment Tax Credit to promote continuous education
• Support and increase research and development
  • Increase federal funding for physical science, engineering, math, and computer science basic research through the National Science Foundation, the National Institute of Standards and Technology, the Department of Energy, and the Department of Defense
  • Strengthen the R&D tax credit and make it permanent
• Enact High-skilled visa reform
  • Lower barriers for high-skilled individuals to get temporary work visas
  • Give green cards to all U.S.-educated master and doctoral students

2nd Tier Recommendations:

• Create a more business-friendly environment in the U.S.
  • Reduce the “onerous and disproportionate” tax that small- and medium-size companies incur by complying with Section 404 of the Sarbanes-Oxley Act
  • Address rising health-care costs through initiatives such as electronic medical records
  • Fully fund the U.S. Patent and Trademark Office to reduce lag time between patent filing and approval
• Engage proactively in the global trade system
  • Advance free and fair trade policies and agreements and conclude the Doha Round of global trade talks
  • Renew the President’s trade promotion authority
  • Promote stronger worldwide enforcement of intellectual property protection
• Promote broadband diffusion
  • Offer industry incentives to promote broadband diffusion
  • Ensure affordable broadband access for every American within five years

A parting thought from the report:

“When one of America’s strongest competitive advantages in the global marketplace is a knowledge-based economy, it does not bode well for the future when the United States neglects the infrastructure that supports its wealth creation.”

A modest milestone

Today Colorado Tech Times attracted its 1,000th viewer, and surged right on past that modest milestone.

Obviously that’s still a long, long way from catching up with the blogosphere’s leading sites, some of which reportedly attract millions of readers. But the growth thus far has been steady and encouraging, with readership now approaching 100 viewers per day.

That’s not so bad, I suppose, for something launched scarcely a month ago with zero capital expense, zero advertising and publicized only by a bit of email networking and word of mouth. Granted, there’s also been no income thus far, and it’s yet to be seen whether, or for how long, I’ll be able to continue doing daily blog stories on top of my paid freelance magazine work.

For now, I’d have to say the jury’s still out on Colorado Tech Times. Virtually all of the feedback has been positive to date, and I’m still having fun writing about an interesting, vital subject in such a new, unfiltered medium.

On the other hand, I hope to eventually get some sponsorship and be able to, as they say, “monetize” the project. So there’s much I still need to learn about the subject of making money in the blogosphere.

Wish me luck, and stay tuned for further developments.

- Russ Arensman -

Digital TV shift to hit the rural West?

EE Times writer Dylan McGrath notes in an article yesterday that the looming shift from analog to digital TV transmissions — currently scheduled for February 2009 — could impact rural and difficult-to-penetrate mountain communities in the West that depend on translators to re-broadcast weak signals.

While some of you big-city folks out there may be worrying that the shift to digital will render your older analog TV tuners useless without a converter box, the article suggests that many of us living out in the sticks could lose broadcast TV signals entirely. That’s because the FCC currently exempts translator stations from the costly mandate of having to convert to digital transmissions.

Such a mandate could be a somewhat moot point anyway, since many translators are operated by local governments and non-profit community groups, which may not be able to afford the $5,000 to $25,000 conversion cost.

So what’s the impact likely to be in places like my own Glenwood Springs? Not much.

Nearly everyone here already relies on either Comcast cable or Dish and DirectTV satellite services. The nearest Grand Junction TV signals are too weak and fuzzy to be worth watching, and Denver TV signals are non-existent on this side of the Continental Divide.

Similarly, most other American viewers are likely to view the shift with a big yawn, since most now get their TV from either cable or satellite services. A Neilsen Co. study released this month reports that the average U.S. home now receives 104.2 TV channels — up from 18 in 1985 and 61 in 2000. And you can bet those channels aren’t being delivered via the good old rabbit-ears antenna.

My sympathy to those still watching free broadcast TV. But for the majority of us who long ago got used to paying $50-plus a month for TV service, the coming shift to digital TV should be pretty much a non-event.

WisperTel reaches south

Evergreen’s Wisper Telecommunications, Inc. has acquired KLNT Enterprises LLC, which provides wireless Internet service under the name BroadSpoke in and around southwest Littleton and Morrison. Acquisition terms were not disclosed.

The deal marks yet another expansion for WisperTel, which earlier this month bought Broomfield’s Path / Broadband Services, Inc., allowing it to expand into Denver’s northwest suburbs.

WisperTel uses pre-WiMAX and WiMAX broadband wireless technology to provide broadband services to suburban and rural communities that tend to be under-served by other Internet providers. The service uses low-power radio signals to send and receive Internet data at speeds of up to seven megabits per second from small antennas mounted at users’ homes or offices.

The company now provides service to nearly 4,000 subscribers over a 3,000 square-mile area.

Fuel cell company acquired

Broomfield-based fuel cell maker Mesoscopic Devices LLC has agreed to be acquired for $12.4 million in cash and stock by Protonex Technology Corp.

Southborough, Mass.-based Protonex, which sells portable, low cost fuel cell systems to the U.S. military and commercial customers, expects the deal to enhance its technology portfolio, accelerate product development and open new markets.

Mesoscopic’s technical team will now focus mainly on its industry-leading solid oxide fuel cell (SOFC) technology, which uses solid-state materials to generate electricity directly from chemical reactions. SOFC fuel cells operate at higher temperatures than conventional membrane-based fuel cells and can use widely available propane, gasoline and diesel as fuel.

The acquisition, scheduled to close this weekend, is contingent upon Protonex raising additional funds from institutional and strategic investors in a secondary stock offering. The company is seeking to raise $15 million to $25 million by selling new shares. Following that, Mesoscopic’s owners are to receive $3.2 million in cash and the balance in new Protonex shares.

Protonex (PXT.L) raised $16.2 million last July with an initial public offering on the London Stock Exchange’s Alternative Investment Market. The Mesoscopic purchase is its first strategic investment since going public.

Protonex lost $5.7 million on revenue of $2.3 million during 2006. Privately held Mesoscopic Devices reported a profit of $100,000 and revenue of $3.2 million during 2006.

Earlier this month Protonex was awarded awarded a $3.5 million contract to develop a 250-watt portable fuel cell power source for the U.S. Army. The contract was the company’s largest to date, and brought the value of its total government contracts to more than $11 million.

Ready or not, gender-selection has arrived

Denver Post columnist David Harsanyi poses the question today: “Would you pick the gender of your child if the technology was available?”

Dave’s question may be slightly premature for most of us, but not because the technology doesn’t exist.

 

For more than a decade Fort Collins-based XY Inc. has been assisting in the conception of a wide array of sex-selected cattle and horses. More recently the company’s patented sperm-sorting technology has been applied to cats and dogs, dolphins, elk and even water buffalo.

This month the company announced the birth of the world’s first dogs to have their sex selected prior to conception. The resulting litter of black Labrador puppies — three female and two male — was a partly successful effort to produce more females, which are preferred over males for service-dog work because of their intelligence and calm temperament.

The mixed litter shows the current limits to XY’s technology, which can significantly increase the odds of a specific gender being conceived, but does not offer a 100% success rate. Yet the company typically guarantees at least a 90% accuracy rate in cattle and horses, where the technology has been rigorously field-tested in breeding for many years.

XY — which began in 1996 as a joint venture between Cytomation Inc., and Colorado State University — describes itself as the global leader in sex-selection technology for “non-human mammals.” Other vendors, however, are plunging ahead into the tricky field of human sex-selection for profit.

As Harshanyi notes, numerous fertility clinics in Colorado and elsewhere already offer gender-selection services, which mainly rely on selecting embryos with the desired gender during in-vitro fertilization. Sperm-sorting technology, at least theoretically, does away with the need to destroy viable embryos, by assuring that only sperm with the desired gender traits are given a chance to procreate.

Human sex-selection opens a Pandora’s box of ethical and legal issues, which for reasons of time and space I won’t try to sort through now. For a a look at some of the ongoing debate, check out Jennifer Lahl’s recent post about the “Top Ten Objections to Sex Selection” at The Human Future blog, or the International Center for Technology Assessment’s assertion that “a new eugenics age” already has begun.

One thing’s for sure, though. Where there’s demand, a market is certain to follow. And many would-be parents appear eager to choose the gender of their offspring.

Companies such as The Fertility Clinics — with locations in Los Angeles, Las Vegas and Mexico — advertise aggressively on the Internet and reportedly are attracting well-heeled customers from around the globe, who gladly pay $20,000 for in-vitro gender selection.

Sperm-sorting technology, still considered experimental by the FDA, reportedly costs $4,000 to $6,000, not including in vitro fertilization. The New York Times says that one Virginia clinic has produced more than 900 pregnancies, with a 91% success ratio for parents who wanted girls, and 76% for those who wanted boys.

So move over dogs, cats, horses and dolphins. Ready or not, the brave new world of human sex selection has now arrived. Can designer babies be far behind?

Lawmakers kill math/science bill

In at least a temporary setback to the state’s technology industry, Colorado lawmakers on Thursday killed a proposed bill that would have required all high school students to take four years of math and three years of science before graduating. Many schools now require only two years of each subject.

Although few if any tech executives spoke in favor of the bill, SB-131, the presidents of the University of Colorado and Colorado State University supported the bill, saying that state high schools are graduating students that do not meet their universities’ entrance requirements, much less those of top-tier schools such as Stanford and Harvard.

The bill’s sponsors — Sen. Josh Penry, R-Grand Junction and Rep. Rob Witwer, R-Genessee — noted correctly that the United States is losing its edge in engineering and science to other countries, particularly China and Japan. They contend that raising high school math and science requirements would help reverse that trend.

Opponents, however, argued against what they saw as a piecemeal approach to revising school standards one or two subjects at a time, and worried that other programs such as art or foreign languages might be shortchanged.

Clearly, both sides of this argument have merit. If we expect to prepare our future generations to succeed in a global economy, we simply must raise the bar in education.

But Colorado has traditionally given local school districts a great deal of control over curriculum and other priorities. That’s not something to be dismissed lightly.

There’s also the problem of legislators creating yet another unfunded mandate for state public schools, which already are struggling to recover from years of inadequate funding, while also trying to comply with numerous existing state and federal program and testing requirements.

Perhaps the statehouse isn’t the best place from which to be increasing high school math and science requirements. But that doesn’t mean the change doesn’t need to be made.

Rep. Nancy Todd, D-Aurora, is sponsoring an alternate bill, HB-1118. It would require the state board of education to adopt minimum high school graduation guidelines, which local districts would then be expected to use to establish graduation requirements tailored to their own communities’ specific needs.

Let’s hope the legislature sees fit to support this more flexible approach.

Venture capital hot spots

Boulder edged out Salt Lake City in a recent ranking of the top U.S. second-tier cities for venture capital investment.

The two cities took the top spots for the number of VC deals completed from 2003 through mid 2005. The rankings were part of a Federal Reserve Bank of Boston study (pdf copy here) of how venture capital investments are distributed outside of the traditional VC hot spots of Silicon Valley, Boston, New York City, Texas, and Los Angeles.

Highest-performing
U.S. Secondary Cities

1 Boulder, CO
2 Salt Lake City, UT
3 Westborough, MA
4 Ann Arbor, MI
5 Norwalk, CT
6 Providence, RI
7 Southborough, MA
8 Stamford, CT
9 Melbourne, FL
10 New Haven, CT

Source: Initiative for a Competitive
Inner City. Cities ranked by number
of private equity deals per city.

Actual deal numbers were not disclosed, so there’s no way to tell how much of a lead the two cities had over other locales.

The rankings were in an article that focused mainly on the economic importance of venture capital, and how New England secondary cities can attract more of it.

The authors — Prabal Chakrabarti and Carole Carlson — identified six factors that help top secondary cities attract more venture capital than their peers:

• Clusters and Networks. “Geographic concentrations of interconnected companies, specialized suppliers and service providers” in particular fields were deemed the most valuable factor, along with personal networks and professional societies.
• Investor Presence. Also key was having an already established investor presence, including “angel” investors.
• Historical Returns. Not surprisingly, the ability to attract reason-
  able returns on investments was important, while below-average returns were found (duh!) to deter investment.
• Intellectual Capital and Technology Transfer. There was a strong correlation between deal flow and the presence of national research universities.
• Community Attractiveness. Quality of life also was strongly correlated with the ability to attract venture capital.
• Accessibility. Direct transportation links to major funding centers was important in helping VCs find and vet deals, as well as serve as company board members and mentors.

The good news for Boulder is that it appears to have plenty of the “secret sauce” needed to attract serious venture capital players.

The bad news? All secondary cities combined received just 13% of the deals and 20% of total investment dollars, despite having 51% of the U.S. population, 49% of the number of business establishments, and 38 percent of the U.S. payroll.

So don’t uncork the champagne yet. There’s plenty of work still to do if Boulder — and the rest of Colorado — hope to break into the ranks of the country’s truly top-tier VC capitals.

Boulder baseball breakthrough?

Baseball season’s just around the corner, and a press release from Boulder’s RevFire Corp. is on the wires today, touting the RevFire training and evaluation tool for pitchers. The company’s patented system enables precise and reliable measurement of the spin rate of pitched softballs or baseballs.

Many baseball teams use radar guns to measure the speed of pitches. But until now there were no tools to measure spin. Strong spin is required to put ‘movement’ on a fastball or to throw effective curveballs, sliders, sinkers, or screwballs.

RevFire has developed a handheld monitor to precisely measure both the spin rate and speed of pitched balls. The monitor does not need to be pointed, and can be held by a coach or placed anywhere within 40 feet of the catcher.

The company’s $398 system relies on specially constructed leather-covered balls that are official size and weight with yarn-wound cores, but cannot be hit by a bat or used in games (presumably because that could damage the embedded chips inside). The RevFire balls cost $40 each and have black stitching to distinguish them from typical red-stitched game balls.

No word from the company on whether any of the pros are using the system at spring training camps, but a recent Northern Colorado Business Report article reports that Oklahoma State University has purchased the RevFire system for its softball team.

RevFire quotes Mike White, a member of the USA National Men’s Fastpitch Softball team as saying that he envisions spin rate measurements becoming “as common in judging pitchers in the future as MPH is today.”

RevFire founder and president David Marinelli is a former design engineer for AT&T Bell Labs and Ball Aerospace. He says that the highlight of his baseball career was pitching for his St. Linus grade school team in Dearborn Heights, Michigan “many years ago.”

Cable Labs stymies broadcasters

Louisville-based Cable Television Laboratories, Inc. is enabling cable TV operators to make what one analyst calls “an end run” around local broadcasters by developing new set-top boxes that will let viewers watch programs broadcast by local TV stations, as well as their usual cable TV programs.

Cable Labs, a research group supported by the nation’s cable companies, says the new boxes will let consumers tune in local broadcast channels currently not provided by their local cable company.

Sounds reasonable enough. But the Boston Globe newspaper reported yesterday that the move actually looks like a negotiating ploy to give cable companies more leverage with local broadcasters, who increasingly want to be paid by cable operators that carry their channels.

It’s a contentious issue because even though those signals are provided free to over-the-air viewers, cable companies are profiting by re-selling the signals as part of their services.

The boxes — which could go into production as soon as this year — should make it harder for local broadcasters to cut off signals to cable operators, as Baltimore’s Sinclair Broadcast Group threatened to do in several markets before this year’s Super Bowl game. The dispute was settled for undisclosed terms two days before the game.

Boulder innnovator’s insights

The Creative Generalist blog yesterday posted a fascinating interview with Adrian Chernoff, the Chief Creative Officer of Ideation Genesis, an innovation company based in Boulder.

Chernoff — a mechanical engineer whose varied career has included stints at General Motors, Disney, NASA and the Sandia and Los Alamos national laboratories — has generated 50 U.S. patents and 12 international patents. He’s worked on everything from new and improved rubber bands (Rubber Bandits™) to theme park rides to cars of the future, and says he’s currently developing a new drink product.

For some thought-provoking ideas on creativity, the process of innovation and the importance of patents, check out this timely article. Also, check out Chernoff’s Muzz.com website, which celebrates the contributions of people like the Muppets’ Jim Henson and inventor Nikola Tesla, whose ideas have changed the world.

New factories are always helpful. But let’s never forget that it’s creative, entrepreneurial individuals like Chernoff that will truly power Colorado’s tech economy into the next century.

Wind plant picks Windsor

Northern Colorado economic development officials breathed a sigh of relief Tuesday when Denmark’s Vestas Wind Systems (Copenhagen exchange: VWS) concluded months of negotiations with the announcement it will build its first U.S. wind turbine blade factory in Windsor’s Great Western Industrial Park, east of Fort Collins.

Construction of the $60 million factory will begin this spring, with production expected to start in early 2008. The plant should eventually have the capacity to produce 1,200 blades per year, while employing about 400 people.

The Greeley Tribune reported last week that worker salaries will average about $32,000 annually, and that the town of Windsor has agreed to waive $560,000 in development fees, plus 50 percent of its usual personal property taxes for 10 years.

A few years ago Vestas reportedly considered building the plant near Portland, Oregon — the site of its U.S. headquarters. But it settled on Colorado for a variety of reasons.

The Northern Colorado Business Report says the company was attracted here, among other reasons, because:
• It wanted to be close to the National Renewable Energy Laboratory’s Wind Technology Center (located between Golden and Boulder, near the former Rocky Flats nuclear weapons plant).
• The Windsor site offers rail access and a central U.S. location that’s amenable to shipping huge blades — measuring half the length of a football field — throughout North America.
• Colorado’s recent passage of Amendment 37, which will require large investments in wind farms and other renewable energy sources.
• An abundance of skilled aerospace employees, including some displaced from Lockheed Martin Corp.

Vestas said in November that it planned to open two plants in 2007 — one in the U.S. and the other in Spain. The Jutland-based company already operates plants in Denmark, Germany, India, Italy, Britain, Sweden, Norway, Australia and China.

On Tuesday the company reported a 2006 operating profit of $267.4 million on sales of $5.1 billion, a sales increase of 7.5 percent. The company reported booming customer demand, but said that component shortages continued to hamper production.

Analysts estimate that Vestas had 25% of the global wind turbine market last year, ahead of GE, Enercon and Gamesa Eolica, each with about 15%. The company reportedly lost market share during 2006 following the entry of Germany’s Siemens into the U.S. market.

Colorado biofuels center debuts

There’s no better way to look good these days than to associate yourself with alternative energy (and with good reason).

That’s why a cluster of Colorado government and business leaders flocked to the state Capitol steps in Denver this morning. They were there to announce a new collaborative biofuels venture intended to make the state a more significant player in the emerging field of converting biomass into fuels and other products.

The press conference was expected to draw a cluster of state and national — albeit mostly Democratic — political figures, including U.S. Sen. Ken Salazar, U.S. Rep. Ed Perlmutter and Colorado Gov. Bill Ritter. The governor’s press office promised the event would showcase “great visuals” of renewable energy technologies the joint venture could help bring to the public, such as flex-fuel and biodiesel vehicles and materials — including shirts, plastic cups, cellulose paper — produced from biomass.

The new private-public venture is called the Colorado Center for Biorefining and Biofuels (C2B2).

Unfortunately, the C2B2 acronym already is being used by Columbia University’s Center for Computational Biology and Bioinformatics, as well as a U.K.-based Internet consulting firm.

Nonetheless, the project, which Chemical and Engineering News reports took nine months to organize, should provide increased funds for numerous Colorado-based academic and U.S. government researchers who are working to accelerate the development of biofuels and biorefining technology.

University of Colorado chemical and biological engineering professor Alan W. Weimer will serve as the venture’s executive director. CU academics will be joined by researchers from Colorado State University, the Colorado School of Mines and the Golden-based National Renewable Energy Laboratory (NREL).

Founding private-sector partners include Chevron Technology Ventures, ConocoPhillips, Dow Chemical Co. and Shell Global Solutions, which reportedly will pay $50,000 annually for royalty-free, nonexclusive rights to jointly developed intellectual property.

The project marks the second time in recent months that NREL and the three state universities have agreed to work together in developing renewable energy technology. In February, CU, CSU, the School of Mines and NREL agreed to create a “collaboratory” for cooperative renewable energy research in the state. The Colorado Renewable Energy Collaboratory is intended to help state research institutions compete for private and public research projects to increase the production and use of energy from renewable resources.

The new biofuels center project is welcome and well-intended, and the companies deserve credit for their participation. But don’t expect cheap Colorado-grown biofuels to solve our energy needs overnight. The Rocky Mountain Institute suggests that biofuels, along with with more efficient cars, are at best likely to displace 3.7 million barrels per day of crude oil— one-fifth of forecasted U.S. consumption — by 2025.

Springs’ Intel loss is China’s gain

Chip-making giant Intel Corp. (Nasdaq: INTC) still hasn’t confirmed this week’s announcement by China’s government that it has won approval for a new $2.5 billion chip fabrication plant in northwest China. But the story’s now been reported by nearly every major news organization, including China’s official Xinhua “People’s Daily” newspaper, so the chances of the deal being consummated seem increasingly likely.

The news comes less than two months after Intel announced plans to sell its Colorado Springs semiconductor plant, which the company bought in 2000. Up to 1,000 workers may be laid off if a buyer is not found that wants to continue operating the plant. Intel briefly flirted with further expansion in the Springs in 2002, before dropping plans to buy land for a second production plant near the city’s airport.

Intel in Colorado Springs

Meanwhile, Intel announced a couple of weeks ago that it will spend up to $1.5 billion to re-tool its Rio Rancho fabrication plant, or fab, near Albuquerque, N.M., to produce chips using its next-generation 45-nanometer technology.

What’s it all about? Why is the world’s largest chip-maker apparently getting out of Colorado, while expanding and opening new facilities elsewhere?

Under pressure
Intel, whose sales declined nearly 9% last year, is coming under increasing competitive pressure from arch-rival Advanced Micro Devices Inc. (NYSE: AMD). And with a relatively new CEO — Paul Otellini — at the helm, Intel is re-thinking many of its product and manufacturing strategies. It’s announced plans in recent months to lay off more than 10,000 workers, while diversifying into new markets, such as NAND flash memory chips, and bailing out of communications chips and other areas that have been less successful than it had hoped.

So what do China and New Mexico have that Colorado doesn’t?

In the case of China, the attraction clearly is easier access to the world’s biggest potential consumer market, which boasts several hundred million increasingly affluent middle-class buyers. China also has become the electronics manufacturing capital of the world, consuming some $37 billion worth of chips last year. And despite its lingering reputation as a backwards Third World locale, China’s universities are turning out many thousands of bright, disciplined and relatively low-cost, engineers every year, making it an attractive recruiting spot.

As for New Mexico, Intel’s Fab 11X there is one of the company’s largest and most advanced facilities, equipped with state-of-the-art clean-room and automated materials-handling equipment. A few years ago it was the first Intel plant upgraded to handle the latest 12-inch silicon wafers. Intel has been operating in New Mexico since 1980, and now employs more than 5,000 people there.

What Intel has in New Mexico is deep roots, as well as a massive multi-billion-dollar investment in leading-edge production facilities.

Aging facilities, little investment
Its Colorado Springs fab, on the other hand, dates back to the early 1980s, when it was built by Mostek, before being sold to United Technologies, then Rockwell, then Intel. Although the aging facility has been updated several times, it was never designed for today’s latest manufacturing technology.

Colorado Springs made sense for Intel nearly a decade ago when the company was seeking lower-cost U.S. locales outside of Silicon Valley to recruit new talent and build chips, while trying to avoid over-dependence on its operations in New Mexico and Arizona. Since then, however, the company has begun shifting more of its manufacturing investment abroad, first to Ireland and Israel, then to Vietnam, and now China.

Farewell to U.S. chip manufacturing?
Chip making in the U.S. is simply less viable than it used to be, especially with foreign governments willing to offer billions of dollars in tax breaks and other incentives to attract new factories, plus access to barely tapped pools of workers who’ll work for far lower wages than Americans.

A handful of companies, including Texas Instruments, are still building new chip fabs in the U.S. But for the most part, the industry’s future manufacturing expansion will take place overseas. Even much of the chip design still being done here will soon be heading abroad.

The lesson for Colorado — and other U.S. states that wish to remain players in the $260 billion chip industry — is to focus on retaining as much of the marketing, finance, administration, logistics and other support operations as possible. Even more important is to do whatever it takes to foster and nurture the development of new fabless chip companies.

Sure, we should try to hang onto the manufacturing facilities we already have, for as long as we can. But don’t count on them staying forever. For most chip companies, manufacturing has become just another commoditized service to be outsourced. The headquarters is still what counts.

As long as Colorado and other regional U.S. semiconductor centers remain attractive places to live for those who run the industry’s established companies — and the entrepreneurs and financiers who launch new chip ventures — we still have a chance of staying in the game.

Ascent Solar soars on Norsk buy

Shares of Littleton’s Ascent Solar Technologies, Inc. (Nasdaq: ASTI) were one of the hottest items on the Nasdaq stock exchange on Wednesday, soaring 89% on news that Norway’s Norsk Hydro ASA (NYSE: NHY) bought 23% of the Colorado company for $9.2 million.

Ascent — which is developing thin-film copper-indium-gallium-diselenide (CIGS) photovoltaic cells that can be manufactured on flexible, low-cost plastic substrates — also gave Norsk Hydro an option to purchase another 12% of its shares later this year, subject to stockholder approval.

Ascent plans to build a 1.5 megawatt (MW) per year pilot manufacturing plant in the Denver area in 2008. By 2010 it aims to begin large-scale production from a 25 MW plant.

Smart Money writer Will Swarts, whose article on Ascent yesterday was headlined “One Day Wonder,” notes that the company’s market cap soared from $25 million on Monday to $34 million in just two days.

At this morning’s peak share price of $9.43, the company’s market cap briefly flirted with the $50 million mark before settling back to $43 million (@7.99 a share) by the end of the trading day.

Still, it’s not too bad for company that spun off last year from Littleton government contractor ITN Energy Systems Inc., went public in July at $5.50 a share (raising $16.5 million) and has languished at $2 to $3 a share until this month.

The solar energy industry — which got a boost last week from the US Energy Department’s plan to provide up to$168 million in development funds for 13 solar energy projects — suddenly has become one of Wall Street’s darlings.

But investors would do well to exercise caution, and avoid being swept up in what New York Times writer Matt Richtel on Wednesday referred to as the next “watt-com” boom.

Array BioPharma strikes license deal

Boulder’s Array BioPharma Inc. (Nasdaq: ARRY) agreed this week to license the exclusive worldwide rights to its toll-like receptor (TLR) program to San Diego’s VentiRx Pharmaceuticals Inc.

Financial terms were not disclosed, but Array will receive an equity stake in VentiRx as well as an upfront payment, potential milestone payments and royalties on product sales. Array also gets an option to acquire a 50% ownership in all VentiRx clinical oncology products developed under the deal.

TLRs are proteins that recognize microbes that have breached physical barriers such as the skin or intestinal tract. They are believed to play a key role in activating immune system responses. VentiRx plans to build upon Array’s research to develop novel drugs that either activate or block TLRs in the body. TLR-based drugs are considered a promising approach to treating a variety of ailments, including cancer, hepatitis, lupus and other autoimmune diseases.

Array is focused mainly on developing drugs for the treatment of cancer and inflammatory disease. The company has identified several promising drug candidates, some of which have been licensed to AstraZeneca and Genentech for further development and testing.

The company, which reported a $45 million loss on sales of about $40 million during the year ended Dec. 31, was founded in 1998 and employs nearly 300 people, including more than 220 scientists. Banc of America analyst David Witzke recently identified Array shares as his top biotech pick for 2007.

Ramtron boosts memory

Colorado Springs-based Ramtron International Corp. (Nasdaq: RMTR) has quadrupled the storage capacity of its ferroelectric random access memory (FRAM) chips to 4 megabits (Mb), and has reached a manufacturing agreement with Texas Instruments (TI) to produce the new devices.

FRAM chips are one of several competing “non-volatile” memory technologies, which can retain stored data when their power supply is turned off. Ramtron has been developing FRAM memory for 20 years. But it only started commercial production of the chips a few years ago, and then at relatively small storage capacities of 1 Mb or less. The latest flash memory chips, in comparison, can store up to 16 Gb, or roughly 4,000 times more data than Ramtron’s new 4 Mb chips.

Ramtron’s new 4 Mb chip

Nonetheless, Ramtron’s chips have found a number of niche markets in recent years — including electric utility meters, auto navigation and entertainment systems, printers and specialized disk drive controllers — where users are willing to pay a premium for fast, durable, power-efficient non-volatile memory. The company says it has now shipped more than 150 million FRAM chips.

Last year, Ramtron’s sales grew 18% to $40.5 million, while gross profit margins increased to more than 50%.

Although Ramtron initially planned to manufacture its own chips, it long ago sold its production facility in the Springs, and has relied on third-party manufacturers, including Japan’s Fujitsu Ltd., to build its chips. This week’s deal adds TI as an additional supplier.

TI and Ramtron have been working together since 2001 to develop a process for making FRAM chips with circuits as small as 130 nanometers. While Ramtron continues to produce stand-alone FRAM memory chips, TI has licensed the technology with plans to eventually embed blocks of FRAM memory within other kinds of logic chips.

Ramtron CEO Bill Staunton says that besides the 4 Mb chips, his company plans to use TI’s manufacturing line to produce samples of “at least one additional product” during 2007.

SpectraLink tender offer begins

Audio conferencing systems maker Polycom Inc. (Nasdaq: PLCM) today launched an expected tender offer to acquire Boulder’s SpectraLink Corp. (Nasdaq: SLNK), following last week’s expiration of the Hart-Scott-Rodino antitrust waiting period for the deal.

The $220 million cash offer, which calls for Pleasanton, Calif.-based Polycom to pay $11.75 per share for all of SpectraLink’s outstanding shares, was announced last month and is expected to close during this year’s second quarter.

Polycom, which reported sales of $682 million last year, is best known for its speaker phones that are widely used for corporate conference calls. Spectralink, which lost $39 million on sales of $145 million during 2006, makes wireless phones, base stations and servers for hospitals, retail, warehouse and industrial settings. Polycom officials are eager to add SpectraLink’s wireless capabilities to their existing product line.

Spectralink, founded in 1990, has been a leader in WiFi telephone systems, which make calls via the standard 802.11 wireless networks found in many offices and homes. Demand for WiFi phones is growing as the market for voice-over-Internet protocol (VoIP) begins to take off, especially among business users.

SpectraLink employs about 300 people in Boulder, and 600 worldwide. No word from the company on how local employees will be affected, as yet-another Colorado tech company is sold.

Spectralink CEO John Elms is expected to leave the company after a transition period. Elms also serves as chairman of the Mountain States Council of the AeA (formerly the American Electronics Association), the nation’s largest high-tech trade group.

WisperTel expands again

Evergreen-based Wisper Telecommunications, Inc. has acquired Broomfield’s Path / Broadband Services, Inc., which offers wireless Internet service in the northwest Denver metropolitan area, including Arvada, Broomfield, Golden, Lafayette, Louisville, and Westminster. Financial terms weren’t disclosed.

The deal marks another big expansion for WisperTel, which was started in 2001 by CEO Barry Pier — formerly with US West, MCI and Western Wireless — to provide wireless Internet access to Evergreen, Conifer and other underserved communities in the foothills west of Denver.

In 2004 WisperTel bought Quicksilver Connect Inc., nearly doubling its customer base to about 2,000 subscribers. Since then the company has continued expanding up the Interstate 70 corridor to provide service in Idaho Springs, Georgetown and Summit County.

The company says the Path deal, its fifth acquisition to date, increases its coverage area to 3,000 square miles, and boosts its customer base to nearly 4,000 subscribers.

WisperTel received $2 million last June from an unidentifed Denver investment group. Previous financing included a $700,000 credit line from Silicon Valley Bank.

After the bank financing last April, CEO Pier told the Denver Post that WisperTel was negotiating to buy four smaller wireless Internet service providers. Pier says via email today to “stand by for ongoing announcements.”

Besides Internet service, WisperTel also offers voice-over-Internet protocol (VoIP) phone services through an arrangement with Las Vegas-based CommPartners.

Blog for dollars? Not that way . . .

Call me old-fashioned, but the practice of writing sponsored posts about various products and brands strikes me as just plain sleazy.

The Los Angeles Times’ Josh Friedman reports that thousands of bloggers are now writing sponsored posts touting such diverse topics as diamonds, digital cameras and drug clinics, and paid for by marketing middlemen such as PayPerPost Inc., ReviewMe, Loud Launch and SponsoredReviews.com.

The funny thing is how little at least some of them are being paid. Blogger Colleen Caldwell, for instance, admits to being paid all of $12 to build buzz about the opening of a Fox Faith film.

The marketing folks see no problems with any of this. Of course not. After all, what’s the difference between blog product placements and “placing” bottles of Heineken beer in the latest Matt Damon movie or Reese’s Pieces in ET? It’s all entertainment, right?

For what it’s worth, you’ll never see this blogger dropping names of sponsored products and brands on these pages. I’d rather get a real job first. The blogosphere’s got enough credibility problems without people selling their souls — cheaply.

(P.S. Advertisers, on the other hand, are most welcome to sponsor this site!)

NREL scores with DOE PV projects

Golden’s National Renewable Energy Laboratory (NREL) is back in the news as a participant in several of the 13 solar energy projects selected Thursday by the U.S. Department of Energy (DOE) for some of the first funds actually made available as part of President Bush’s Solar America Initiative.

NREL is a partner in six of the project teams, which collectively will negotiate for up to$168 million in FY 2007-09 funding, subject to appropriation from Congress.

Each team selected for negotiation formed a Technology Pathway Partnership — made up of companies, laboratories, universities, and non-profit organizations — aimed at accelerating the commercialization of U.S.-produced solar photovoltaic (PV) systems.

A wide range of projects were selected, including development of several thin-film and organic PV technologies, solar modules with built-in power inverters, roofing products with integrated PV elements, systems for concentrating PV power, thinner solar cells and automated manufacturing systems for PV cells.

The DOE expects the 13 projects to pave the way for a ten-fold increase in the annual U.S. manufacturing capacity of photovoltaic systems, from 240 megawatts (MW) in 2005 to as much as 2,850 MW by 2010. The agency says the program’s success should allow the U.S. industry reduce the cost of solar-electricity production from current levels of 18-23 cents per kilowatt-hour (kWh) to 5-10 cents per kWh by 2015, making it competitive with other forms of energy production.

PV panels at Lake Powell, Utah                        (NREL photo)

Earlier this week NREL signed an $870,000 licensing deal to transfer PV technology to Longmont-based PrimeStar Solar, Inc. (see story below).

Denver snags Keiretsu Forum chapter

The rapidly expanding Keiretsu Forum, the nation’s largest group of so-called “angel” and venture capital investors, is about to launch its newest chapter in the Mile High City.

The 6-year-old group, which now includes 12 chapters and more than 500 accredited investor members, has scheduled its first meeting March 27th at the offices of Exclusive Resorts in downtown Denver. Attendance is by invitation only. Interested parties should contact Steve Murchie at (Tel: 720-506-4454, or smurchie@keiretsuforum.com.

Since its 2000 launch in San Francisco, the Keiretsu Forum has expanded into Los Angeles, San Diego, the Pacific Northwest and Boise, Idaho. In November it launched its first international chapter, in Beijing, China. Forum members have invested more than $100 million in 135 companies in technology, healthcare/life sciences, consumer products, real estate and other high growth industries.

Not to be mistaken for the apparently dormant Colorado Internet Kieretsu — a once-thriving organization of Colorado Internet entrepreneurs — the San Francisco-based Keiretsu Forum brings budding entrepreneurs together with potential investors at monthly meetings with the goal of providing early-stage funding for promising startups.

The Keiretsu Forum is far from alone these days. Other West Coast-based angel investing groups have emerged in recent years, including Silicon Valley Angels, Life Science Angels and the Band of Angels.

Last March, John Dilts, formerly the president of the Keiretsu Forum’s Los Angeles chapter, launched another new group, Maverick Angels. That Los Angeles-based group has since expanded into Silicon Valley.

So what does the proliferation of angel investing groups tell us? Is a new cooperative VC business model emerging? Or could it be that the world’s awash in excess capital looking potential investments? Should we be concerned that the VC industry is once again getting a bit frothy and over-enthusiastic?

I’d love to hear from a few early-stage entrepreneurs about whether things are getting easier for Colorado tech startups. Is there ample VC capital out there these days for quality business plans? Will the Kieretsu Forum’s arrival make a positive difference?

Real D buys Boulder’s ColorLink

Boulder-based ColorLink, Inc. has been purchased by one of its leading customers, Beverly Hills, Calif.-based Real D. Financial terms of the deal were not announced.

ColorLink — a privately held photonics company founded in 1995 by Gary Sharp (now the company’s chief technology officer) and former University of Colorado engineering professor Kristina Johnson — has developed a variety of polarization and color-management optical products, and holds numerous optics-related patents. Its recent products include polarizers that convert existing digital projectors to 3-D, and patented film-based filters that improve low-light vision in sports eyewear, sunglasses and ski goggles.

Real D is leading the charge to introduce three-dimensional projection equipment and movies to the entertainment industry. The 6-year-old company has deployed more than 700 three-dimensional movie projection systems in 14 countries and expects to have 1,000 screens in operation later this year.

Carmike Cinema, for instance, has committed to install 500 Real D screens by the end of 2007. Real D charges about $50,000 upfront and $25,000 yearly for each 3-D theater installation.

It also supplies stereoscopic technology to organizations such as NASA, Pfizer, BMW and Boeing for 3-D visualization uses. Viewers must wear special glasses to see movies and other images in 3-D.

The acquisition includes ColorLink’s R&D campus in Boulder as well as its manufacturing facilities in Tokyo and Shanghai. Real D also gains ownership of ColorLink’s patent portfolio, which covers optical, liquid crystal and light-based technologies.

“We have been working closely with ColorLink’s team for several years, and their approach to light management and design is truly revolutionary,” says Real D President Joshua Greer.

ColorLink will become a REAL D subsidiary, and ColorLink CEO Leo Bannon will become Real D’s chief operating officer. No word yet on how ColorLink’s Boulder employees will be affected.

For those keeping count, that’s two more Colorado tech companies purchased in the past week (see Picolight story below). It’s no fault of the entrepreneurs selling out, who have to make rational investment-exit decisions. But it’s hard to build a thriving, sustainable local tech economy when our best and brightest invariably end up taking orders from headquarters on the West Coast.

ERP category doomed?

Since the 2003 sale of Denver’s J.D. Edwards & Co. to PeopleSoft Inc. Colorado no longer has a significant homegrown player in the enterprise resource planning (ERP) software business.

That may be a good thing.

Julie Smith David, an associate professor of information systems at Arizona State University’s W. P. Carey School of Business writes in the school’s latest newsletter that “ERPsystems — those monolithic software packages that evolved to tame companywide data — may be heading the way of trilobites and dinosaurs.”

The problem, says Davis, is that once an organization goes through the massive time and effort to install an ERP system, it becomes quite rigid, compromising their ability to rapidly adapt to changing situations. Also, the article notes, ERP upgrades are expensive and no longer deliver as much bang for the buck.

Davis and other industry experts weighing in on the topic see on-demand platforms, or software-as-a-service solutions, as likely alternatives to today’s ponderous ERP systems. “ERP is at a breaking point,” she says. “For the first time in a long time, it’s vulnerable to other options.”

PeopleSoft’s $1.8 billion friendly purchase of J.D. Edwards was overshadowed later that year by Oracle’s hostile takeover bid for PeopleSoft. The lengthy dispute dragged on until January 2005, when Oracle concluded the $10.3 billion deal and fired thousands of former PeopleSoft employees.

Oracle and SAP are now the industry’s dominant companies, followed by IBM and Microsoft. Niel Robertson’s Parallax blog mused recently, however, about why the “Most Important Battle in IT” is now for fifth place.

Severance tax boost proposed

I can’t take credit for it, but after my “Education gap” post last week (see below) called for increasing Colorado’s mineral severance tax to boost revenues for the state’s woefully-funded higher education system, someone actually may be trying to do something about it.

Today’s Glenwood Post-Independent reports that the Associated Governments of Northwest Colorado (AGNC) — which represents several western Colorado counties — will ask Gov. Bill Ritter to create a blue ribbon committee to draft changes to the state’s severance tax and federal mineral leasing distribution.

What’s not clear yet is whether this will turn into yet another grab for existing tax revenue, or a long-overdue increase in the state’s overall severance tax rate, which is needed to bring Colorado into line with neighboring Rocky Mountain states.

State Senator Gail Schwartz of Snowmass Village is reportedly pushing for a legislative committee to increase severance tax funding for higher education. But Garfield County Commissioner Larry McCown correctly warns that if legislators simply “raid” existing tax revenue to bolster higher education, it will take away funds that are much-needed to address the growing impacts of mineral development on the West Slope.

AGNC executive director Aron Diaz seems to be on the right track. “It is our hope that we can produce a positive and proactive committee that will look at making Colorado a more competitive environment that will actually meet or exceed current severance tax revenue projections,” he says. “We are not interested in simply looking for schemes that will further carve up the current distribution system.”

Right on, Aron.

PrimeStar strikes NREL deal

Longmont’s PrimeStar Solar, Inc. continues making progress towards its goal of starting commercial production of low-cost cadmium telluride (CdTe) photovoltaic (PV) modules, which generate electricity from sunlight.

Last week, PrimeStar announced an $870,000 deal to transition CdTe technology developed at Golden’s National Renewable Energy Laboratory (NREL) into commercial production. The company also announced it has leased a 16,000 square-foot facility near NREL in Golden to develop a pilot plant. NREL is operated for the U.S. Energy Department by Midwest Research Institute and Battelle.

CdTe is one of several new technologies trying to challenge mainstream PV cells, which are built on expensive polycrystalline silicon wafers. CdTe and other alternative approaches typically convert sunlight less efficiently, but offer the potential for lower cost and complexity, since their thin-film cells can be built atop conventional glass or even plastic. NREL’s CdTe cells have been shown to convert up to 16.5% of solar energy into electricity, well above the 10% efficiency of most other thin-film approaches (though less than the 20% efficiency of industry leader SunPower Corp.’s silicon-based PV cells).

PrimeStar’s NREL connection pre-dates the latest deal. In December, the company recruited Ken Zweibel, a noted thin-film PV researcher and 27-year NREL veteran, as its president and chairman. Founded last year, the privately held company thus far has raised $6 million in seed funds.

Yet PrimeStar has plenty of company. Investors poured $242 million into solar energy projects during the first three quarters of 2006 according to Venture Power, an industry newsletter.

Others developing CdTe solar cells include First Solar, AVA Technologies and Solar Fields. Different thin-film technology approaches are being pursued by Japan’s Honda and Germany’s Wurth Solar, as well as startups Nanosolar, Miasole, and Heliovolt.

Isonics saves its listing

Golden-based Isonics Corp. (ISOND) is back in the good graces of Nasdaq, but it’s not out of the woods yet.

The company received notice from the stock exchange’s hearings department last week that it once again meets the market price requirements to continue its Nasdaq listing, after its shares closed above $1 for 10 consecutive days. This morning ISOND shares were trading at $1.75, well above the required minimum, but far from their $20-plus trading range of two years ago. Last July the company’s shares hit a low of 37 cents.

Isonics — which provides homeland security products, including explosive-detection devices, and a variety of semiconductor products and services — boosted its share price last month with a 1-for-4 reverse stock split. It also announced plans to sell its loss-making life sciences division, which provides isotopes to the health care industry for cancer imaging and treatment.

Two weeks ago, Isonics Chairman, CEO and co-founder James Alexander resigned, while two other company officials with board seats were replaced with independent directors. Former Lockheed Martin executive Christopher Toffales, who owns 10% of Isonics, replaced Alexander as chairman.

The company lost $16.6 million on sales of $23.7 million during its last fiscal year, ending in April 2006.

AMAT solar bid paying off

Applied Materials (AMAT) is beginning to see some return on last July’s $464 million purchase of Longmont-based Applied Films, which develops thin-film deposition equipment used to make photovoltaic cells, which convert solar energy into electricity.

The Santa Clara, CA-based company announced today that Moser Baer India Ltd. has selected it to develop and install a new production line in New Delhi, India for thin-film solar modules. The company claims this will be the solar industry’s first “Generation 8.5″ factory, capable of producing huge solar panels on glass sheets the size of a queen bed (7.2 x 8.5 feet).

The contract marks AMAT’s first deal to deliver a full solar panel production line, including chemical vapor deposition (CVD), physical vapor deposition (PVD) and laser scribing equipment, as well as factory software, automation and other supporting technologies. The Moser Baer facility should initially be able to manufacture enough solar panels each year to produce 40 megawatts of electricity, although company officials say they aim to expand its output by 2009 to 200 megawats per year.

The worldwide solar equipment market is expected to grow from about $1 billion in 2006 to more than $3 billion in 2010, by which time AMAT CEO Mike Splinter expects his company’s new solar business to be producing $500 million in annual revenue.

The purchase of Applied Films, which had more than 700 employees when acquired, is a key part of AMAT’s strategy to diversify beyond its core business of conventional semiconductor production equipment.

Why blog?

 

It may seem presumptuous to address that question barely a week after my first foray into the blogosphere. But the question seems pertinent this weekend as I read through the email comments I’ve received after launching this blog.

There’s been some kind words of praise: “insightful” and “impressive” says one new reader. “Cool” says another, who generously introduced me to FeedBurner’s (http://www.feedburner.com) Colorado technology and entrepreneurs blogger network. Others seem puzzled, but polite. And no one, thus far at least, has gone so far as to label this new venture what it ultimately may prove to be — a colossal waste of time.

Blogged out

The most thought-provoking comments to date come from my former Electronic Business magazine colleague Bill Roberts, a veteran business journalist who’s been around the block long enough to know a thing or two.

“Frankly I’m blogged out,” writes Bill. “There are too many blogs and too much blather. My fear is we as a culture are blogging on and on and not attending to the real problems we face. . . . I’m tired of blogs. Rome burns and we all blog…”

Hard to argue with that. Clearly there’s a shallowness and self-absorbed, self-referential quality about much of what passes for commentary and content in the world of blogs that’s downright irritating. Any medium that devotes this much attention to celebrities, pets, geeks, teen diaries and extreme political rants deserves to be treated with cautious skepticism.

A particular point of concern to those of us in journalism is how the opinions and “insights” of bloggers — most of whom conduct no original reporting or research — often are given equal weight to those of us who do this for a living, and often have spent years getting to know a particular subject.

Big, corporate-owned media certainly has its faults and biases, but the day it finally fires all the journalists and switches to the much cheaper option of bloggers writing about other bloggers is the day we’re all in very big trouble. (insert your own rant here about the First Amendment, the watchdog role of the Fourth Estate, the decline of modern civilization, etc.)

Corporate blogs

Yet it’s hard to ignore the sheer magnitude and momentum of this social media phenomenon. Blog search firm Technorati (http://www.technorati.com) is now following more than 70 million blogs, up from 50 million scarcely a year ago. And it’s no longer just teens and tech geeks that are blogging. These days even companies — running the gamut from IBM, Microsoft and HP to McDonald’s and General Motors — are posting blogs on a variety of topics.

And yes, you can apparently teach an old dog to blog. I recently came across a new blog (http://www.blogs.marriott.com)
from 74-year-old Bill Marriott, CEO of Washington, D.C.-based Marriott International, who in recent weeks has begun to comment on topics ranging from recycling, immigration, education and the Mormon Church, to his company’s 80 years in the hospitality industry.

It’s not clear whether Mr. Marriott is doing the actual writing himself, but the ideas seem to be his own. For investors, customers and competitors, Marriott’s blog provides new insights into this $12 billion company that runs nearly 3,000 hotels worldwide. It also helps to put a human face on a unique corporate culture that otherwise might be obscured by the usual corporate posturing, positioning and blather.

If Bill Marriott isn’t afraid to stick his neck out into cyberspace, why should the rest of us be?

Why blog? (continued)

So, getting back to the original question: Why blog?

In part, the motivation is little different from that of a merchant who posts a sign next to a busy highway. The Internet is now the world’s biggest and busiest thoroughfare, one that crosses all borders and time zones. Any professional or business person who fails to establish a presence there is missing an obvious opportunity. After all, if you don’t let people know you’re out there, they’re not likely to beat a path to your door.

For a self-employed writer and editor like myself, there’s at least the faint hope that making myself more visible online may eventually generate additional freelance assignments, new contacts and interesting article ideas.

OK, the truth is, I’m still waiting for the financial benefits to roll in. I suspect the payoff, if any, could be many months away. But the new blog has already sparked some interesting contacts and helped renew some old acquaintances.

“Man, what a blast from the past! what have you been doing since the late 80s?” writes a business editor who used to publish my freelance articles when I was editor of a weekly newspaper covering Vail and Beaver Creek. “I realize I owe you a phone call,” writes another editor who’s been missing my calls in recent weeks.

Filling a niche

There’s also the rationale of filling a niche, scratching an unsatisfied itch, even accomplishing a sort of personal mission. You see, I could just as easily have started a blog about skiing, parenting, environmental issues or local and state politics, all of which interest me and consume significant amounts of my time.

But after following and writing about Colorado technology and the state’s emerging information economy for well over two decades, I’ve developed a personal attachment to, and interest in, its success. I’d like to see this industry continue to flourish and provide jobs and (hopefully) clean industry for my kids and future generations.

As I wrote in my opening post, “all too often this state and region gets precious little recognition and attention in an industry largely focused on Silicon Valley (and Asia).” That’s a shame, because there’s been some great stories, colorful personalities and important contributions that have come out of this state and region. And the story is far from over.

I’ve long believed there is ample editorial fodder here for a strong regional tech-business publication. But finding a way to pay for it is a far bigger challenge. Most national business and technology publications are struggling to survive since the post-millennial tech wreck. And that’s despite having vast resources and advertising sales organizations to rely upon.

A broken business model

The traditional advertising-based publishing business model is broken, and publishers left and right are either failing or cutting back their investments in editorial content. The remaining journalists in the field are bombarded by literally hundreds of press releases weekly, and far more marketing and public-relations pitches than they could possibly find time to look into, even if the topics happened to be newsworthy.

As one of my journalist colleagues wrote recently:

Companies are using the Web to communicate with customers and prospects, so they don’t need to rely on magazines either for advertising or even for articles where they have no control over the outcome. Companies are realizing that they can communicate without the middle medium — but thankfully they also realize that they can’t just shove marketing crap down people’s throats. They know that customers are still looking for value in their information.

Yes, customers, and readers of all stripes, are looking for reliable, objective information sources. But increasingly they don’t want to pay for it.

Ahh, forgive me. I’m about to head off on another rant. . .

Turning the tables

The point is, blogging offers at least the potential to turn the tables on the tired old paradigm of publishing that’s developed over the past century. It’s an opportunity to break free of the capital-intensive system of printing presses and elaborate distribution systems controlled by a handful of self-interested publishers, far too few of whom still retain any sincere commitment to public service.

It’s a chance for virtually anyone with access to a computer and the Internet to say whatever they like, for better or worse, to anyone they can manage to interest. It’s a true marketplace of ideas, thus far mostly unfettered by regulation or economic restraint.

The blogosphere these days is the Wild West of publishing, and it’s providing a forum for literally millions of amateurs, idiots, charlatans and opportunists, as well as a growing number of thoughtful new voices.

Remember the mid-1990s, back in the early days of the World Wide Web, when thousands of odd and interesting websites were popping up around the globe? Remember people scratching their heads and saying: “Sure it’s cool, but how in the world can we ever make money off of it?” Then, within a few short years, we were caught up in the euphoria of the dot-com boom, and its subsequent, painful bust.

Many millions of dollars were poured into what were, in retrospect, remarkably, brazenly stupid ideas. But along the way a few good, well-timed and well-executed ideas stuck. Raise your hand if — like me — you shopped at Amazon, iTunes or Best Buy Online this past Christmas. Enough said.

Betting on blogs

The Internet has matured into a vast new economic arena, and the blogosphere is headed that way as well.

Will most of us make our fortunes there? Of course not. Only a handful of lucky, and sometimes prescient, pioneers ever reap the riches of any new era. But will we at least have a bit of adventure and a few amusing anecdotes to share with our grandchildren? Let’s hope so.

And for all those new bloggers who’ve never before experienced the thrill of seeing your words plastered across a magazine’s cover or the front page of the local newspaper, let me welcome you to the party. My friends, your day has finally arrived.

Education gap hits state tech ranking

Everyone knows how bogus rankings of “Top Tech States,” “Leading Venture Capital Locales” and the like can be – especially journalists like myself who’ve participated in creating such lists, and been complicit in helping to publicize them. The list-maker’s biased selection criteria or a single big deal or other anomaly often can push an otherwise undistinguished contender up the ranks or sink a usually strong performer.

But it’s still worth considering the implications for a state like Colorado when its ranking declines in an apparently credible study such as the one released this week reviewing how well U.S. states are transforming from the old “smokestack chasing” industrial economic model to a “new economy” approach of creating and retaining high value-added, high-wage jobs.

The 2007 State New Economy Index, issued this week by the Ewing Marion Kauffman Foundation and the Information Technology and Innovation Foundation, shows Colorado falling to No. 9 from No. 3 over the past five years.

Roger Fillion of the Rocky Mountain News reported Wednesday that the big reason for the state’s decline is a lack of support for higher-education funding. No surprise there.

Colorado education officals contend that our higher education system needs an additional $832 million this year just to meet the average state funding of their peers across the country – and that’s just to be average. As the Denver Post recently editorialized: “A new funding stream for higher education must be found.”

A likely source of funds is on display just up the road in Wyoming, which collected six times more severance taxes on oil and gas production last year than Colorado. The University of Wyoming’s Laramie campus has $200 million in construction projects planned or underway, while Colorado college presidents must go begging to the state legislature for enough cash to fix their leaky roofs. Meanwhile, Wyoming provides nearly four times more higher-education funding per student than Colorado.

What’s needed is an increase in the overall mineral royalty and severance tax rates, at least enough to make Colorado’s tax rates comparable to other Rocky Mountain states.

Adequate severance taxes are important not just as a new education funding source, but to mitigate the impacts being felt here on Colorado’s West Slope, where the gas industry is exploiting a vast store of non-renewable resources that will eventually be depleted, leaving behind scarred landscapes, polluted watersheds and a legacy of unmet social and infrastructure needs.

But enough of that soapbox topic for now. Surely I’m preaching to the choir here. By now, everyone in the tech industry understands the connection between education and the economy. Silicon Valley certainly understands the importance of its proximity to Stanford, UC Berkeley and CalTech.

When will Colorado realize that world-class universities are an essential underpinning for our long-term success in today’s emerging “new economy?”

More than education?

Of course, there’s more to tech competitiveness than simply better universities.

Ken Jarboe of the Washington, D.C.-based Athena Alliance reacts today to a recent Washington Post op-ed article by Microsoft’s Bill Gates on “How to Keep America Competitive.”

Gates calls for better math and science education, and an expansion of the H-1-B Visa program. But Jarboe raises concern about the consequences of that program, which some contend contributes to the the offshoring of U.S. engineering jobs.

Jarboe quotes an amusing anecdote from author Clyde Prestowitz, who in his recent book “Three Billion New Capitalists” recounts a conversation with his computer engineer son. Prestowitz questioned his son’s idea of leaving engineering to open a snowplowing operation in Colorado. But as his son replied: “they can’t outsource the snow.”

So what else counts towards competitiveness? Among other things, notes Gates, “government investment in research, strong intellectual property laws and efficient capital markets are among the reasons that America has for decades been best at transforming new ideas into successful businesses.”

Or as Jarboe concludes: “Time we start thinking more broadly. Deal with education and immigration policy. But let’s also start thinking about the 100 other things that need to be done. . . Partial solutions are not enough any more.”

Nicely put Ken!

Engineering scholarships, kudos to Seagate

While we’re on the subject of education, it’s worth noting Seagate Technology’s generous local scholarship program, offered for a third consecutive year, which provides scholarships of up to $2,000 for engineering students at Colorado State University and the University of Colorado at Boulder.

Incoming freshmen recipients will receive $2,000, and returning student recipients will receive $1,000, based on the following criteria: grade point average, financial need, community involvement and technical innovation/creativity.

Applications for the Seagate Scholarship Program are available on the company’s Web site. Completed applications will be accepted through April 12, 2007. Scholarship recipients will be notified in late April.

Call me crazy, but isn’t it about time for some actual Colorado-based tech companies to step up to the plate with scholarship funds to support our next generation of engineering talent?

Colorado biotech blossoming

Reinhardt Krause at Investors Business Daily notes the biotech industry is expanding beyond California and Boston to include new hotspots such as Colorado, Arizona, Texas, North Carolina and Minnesota.

Louisville’s Replidyne alone raised $62.5 million in venture financing in Sept. 2005. According to Venture One, that still ranks as the second-largest biotech deal outside of Calif. and Mass. Colorado biotech venture funding rose 38% to $158.6 million in 2006, according to PricewaterhouseCoopers’ “MoneyTree” survey.

State funding, though relatively minimal, is helping to bolster Colorado’s biotech industry. The Colorado Bioscience Association notes that, thanks to the approval of last year’s House Bill 1360, $2 million in state funds was recently awarded to 27 bioscience proof of concept projects at six Colorado universities and research institutions.

Adam Rubenstein’s Colorado Life Science Deal Flow blog reports that Lakewood-based CeraPedics closed a $12.25M private equity financing deal this week that will aid its development of products for the orthopedic bone substitute market. Adam’s blog notes significant progress at numerous other Colorado biotech firms that offer further reasons for optimism.

But lest we get too smug, it’s worth noting that the Mile-High state is hardly alone in chasing biotech investment. A post today from Seeking Alpha contributor H.S. Ayoub, for instance, details some of Florida’s efforts to parlay its aging population and huge healthcare infrastructure to grab a piece of the biotech pie.

Colorado’s fledgling biotech cluster, like much of the rest of the state’s technology industry, still has relatively shallow roots. Until this state produces a few homegrown Amgens and Genetechs with firmly established headquarters here – along with world-class university research centers – we’ll likely remain a technology feeder system for the industry’s established giants.

Looking for startup funding?

Looking for a way to fund that great new tech idea?

TechStars.org – a group of Colorado angel investors including venture capitalist Brad Feld and greeting card mogul-turned politician Jared Polis – is offering up to $15,000 in startup funding ($5,000 per founder, maximum of three founders) to 10 promising first-time entrepreneurial ventures.

Besides the money, selected companies will get free office space in Boulder for the summer while participating in a series of mentoring events with CEOs and experienced entrepreneurs. They’ll receive coaching and advice from a large group of industry veterans, as well as access to a free server, hosting, legal services, and more. The program, which runs from May 21 through Aug. 7, is intended to help participants produce a working prototype of their product or service that’s ready to take to the next level.

The catch? You’ll need to give up a 5% non-voting stake in your new venture.

The application deadline is March 31, 2007.

Westminster job fair scheduled

Rally Software Development Corp., an Agile software solutions provider, is hosting a high-tech recruiting event along with Gold Systems, Me.dium, Newsgator and StillSecure. The event will take place Wednesday, March 7 from 5:30 – 7:30 p.m. at the Westin Hotel in Westminster.

“Rally currently has positions open in every department,” says Rally CEO Tim Miller.

Rally’s web site: http://www.rallydev.com/
http://www.rallydev.com/recruiting_event.jsp

Offshore / nearshore, it’s still all about cheaper labor

An interesting article by San Jose Mercury News reporter Nicole Wong reports that large tech companies – including Sun, Intel and Hewlett-Packard – aren’t shifting customer-support jobs only to China and India, but also to closer “near-shore” locales such as Canada’s Nova Scotia, Mexico and Costa Rica.

The practice reduces some of the problems typically associated with providing support multiple time zones away from customers and companies’ home markets. In any event, many tech execs claim that they’re not really shifting U.S. jobs abroad – just expanding abroad with new jobs.

The Colorado connection? The Merc’s Wong cites a confidential 2005 HP memo listing Colorado Springs and Littleton, CO as sites from which customer-service jobs were to be shifted to Guadalajara, Mexico by mid-2006. No word from the company on whether the job shifts actually took place.

Picolight sold, another one bites the dust . . .

JDS Uniphase Corp. on Tuesday agreed to buy Louisville, CO-based Picolight Inc. for up to $125 million, subject to the achievement of certain revenue targets this year.

For JDSU, the deal strengthens its position in the fast-growing market for vertical cavity surface-emitting laser (VCSEL)-based transceivers, which provide low-power optical interconnections to link corporate data centers with high-speed metropolitan and wide-area networks. JDSU expects to record its first profit in a decade in the fiscal year ending this June.

For Picolight, it provides access to JDSU’s global marketing and manufacturing capabilities. It also provides the company’s investors a modest return on the nearly $120 million in venture capital they’ve sunk into the 12-year-old company, without the challenge and uncertainty of attempting an initial public offering. Picolight was founded in 1995 as a spinout of Vixel Corp. by Picolight’s CTO and Chairman Jack L. Jewell, a former AT&T Bell Laboratories researcher who has been awarded more than 50 U.S. patents.

But for the Boulder area – still digesting last week’s purchase of natural-foods retailer Wild Oats – the sale marks the loss of yet another promising local company. On the plus side, at least PicoLight’s 130 employees at the Colorado Tech Center are expected to keep their jobs.

Colorado has long been a fertile environment for promising startups. Technology entrepreneurs have founded, and sold, dozens of local companies, including such notables as McData, Storage Technology, Exabyte, J.D. Edwards, Conner Peripherals and PrairieTek. But few, if any, have managed to remain independent for long.

Will Colorado ever have a homegrown Cisco, Intel or IBM, or are we fated to always be the farm team for Silicon Valley’s “big league” technology giants?

Hello world!

Welcome to Colorado Tech Times. This is my first post.

Thousands of bright, dedicated and talented people contribute to Colorado’s burgeoning tech economy. But all too often the state and region get precious little recognition and attention in an industry largely focused on Silicon Valley (and Asia). This blog will attempt to rectify that situation, in at least some small way.

I’ll try to call attention to promising, young companies trying to make their mark here, as well the industry’s giants, many of which view the region as an attractive operating environment and recruiting ground.

Please share your thoughts and suggestions, and thanks for checking this out!