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Minor Starts $50M Software On-Demand Fund

Internet business entrepreneur Halsey Minor has set up a $50 million venture capital fund for piping applications over the Web as subscription services.

Minor said he established the On Demand Venture Fund as a "springboard" to accelerate the development and deployment of on-demand applications at a time when Internet-based software delivery has become extremely popular and CRM rivals salesforce.com and Siebel Systems position in the emerging market.

The attraction to the new paradigm, according to a statement, is that applications deliver the same functionality as traditional enterprise software applications but cost less. Moreover, they don't require the use of additional software or hardware.

Analysts are taking note of software on demand as well.

"Very simply put, adoption of software in an On Demand world is moving at such a rapid pace that it will catch many vendors, customers, and investors by surprise," Merrill Lynch claimed in a research report from February 2004.

Minor, current CEO at Web services service provider Grand Central Communications, founded CNET Networks, Vignette and Snap.com/NBCi. In 1999, Minor began his foray into online software delivery as a founding investor and board member in salesforce.com where he is the second largest shareholder in the company.

In an example of practicing what has been preached, the entrepreneur has used a combination of Grand Central and salesforce.com software to power an on-demand business intelligence start-up called Inside Scoop.

Using Grand Central's Integration On Demand platform, Inside Scoop integrates data in real-time from a variety of different data sources, packages that data together into a business process, and pushes the data to sales and marketing professionals through salesforce.com.

Because the application was developed on the Grand Central platform without purchasing software or hardware, Inside Scoop has relatively low operational costs.

"The birth of the On Demand technology model will be as important to global business as the birth of the Internet was for consumers," said Minor in the statement. "With the launch of the On Demand Venture Fund I am now providing the financial resources for a larger group of entrepreneurs to build and launch On Demand services."

VC funds proliferated for just about every sector of the high-technology space in the late '90s as the power and promise of the Internet grew. But the dot-com boom ended as quickly as it began in 2000 and funding for new projects dried up.

However, many believe there is a resurgence in VC funding. In the first half of 2004, 82 funds raised $5.8 billion, ahead of last year's pace, according to figures compiled by Thomson Venture Economics and the National Venture Capital Association (NVCA).