Andreessen A "Lifer" at Loudcloud?
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Internet wunderkind Marc Andreessen says he would like to be at his startup Loudcloud "5, 10 or 20 years." (And that's good old-fashioned calendar years, not Internet time).
Andreessen, who helped define the Internet revolution as part of team that created the first Internet browser (Mosaic) and his co-founding Netscape, told a packed hall at the San Francisco Marriott hotel Thursday that he is "extremely committed" to his startup Loudcloud. Asked if he was a serial entrepreneur, Andreessen, whose invested in several Internet ventures, said, "I hope not."
Following the company's recent IPO, Andreessen and Loudcloud CEO Ben Horowitz took advantage of the first day out of the SEC-imposed quiet period to talk about Internet trends and their company's prospects at an event put on by the Churchill Club.
Loudcloud (Nasdaq:LDCL) helps companies outsource their Web operations through a combination of automated software solutions it's developed and third party hosting services. The company has filed over 30 patents related to its technology.
Andreessen listed many reasons for the recent industry downturn, including the perceived Y2K crisis of 1999. "Y2K was responsible for a lot of the growth in IT buildup," said Andreesen, "but now we've made the transition of companies retooling and all of a sudden they're not anymore." He think very few startups that aren't already public will survive. "And there's no M&A activity because no one knows what to set the price at."
But for established Internet companies battling through the current downturn, Andreessen sees a silver lining ahead. "Those companies funded to survive should emerge battle-tested, and stronger than ever," he said. "There should be less competitors and less kamikaze pricing going forward -- and employees happy to have jobs."
While conceding the near term industry prospects don't look good, he was quick to note that there is still business out there. "It's not like no one is buying anything. Sun and Cisco are a long way from zero (sales)." Andreessen also poked fun at the New Economy lingo of company's being labeled a "play" as in a "security play" or a "storage play" or being in the communications "space." Says Andreessen: "The way Wall Street looks at it now, you're either generating cash, or not, or plan to over some reasonable period of time. There are no plays or spaces anymore."
Loudcloud was probably the most significant tech IPO of the past few months. CEO Horowitz attributes the successful IPO (in that it was able to happen at all; the offering had to be re-priced downward before going out) to Loudcloud's list of blue chip customers that include Ford, USA Today, Blockbuster and News Corp. "We showed we can do infrastructure work cheaper, more reliably and in an automated fashion,""said Horowitz. .
He also conceded that sales cycles have now take much longer (six to nine months) than in the heady days of Let's do it! "Internet time." Which is to say it's more like the earlier cycle of selling enterprise software, pre-Internet bubble.