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Experts Peering Ahead to 2001 See Israel Still Strong in Infrastructure

[ISRAEL] If there are any lessons to be learned from 2000 when making predictions for the coming high-tech year, it is that there are no sure-fire prophets in this business. All the "Best Startup" awards in the world don't help when the money begins to run out and its time to downsize, perhaps down to size zero.

All we could do, then, is talk to those watching the industry and select a few companies that they, and we, think look interesting. We have focused on those with technologies that appear to fill the gaps between today's Internet and tomorrow's world of always-on, movies-to-your-cellphone connectivity.

"Voice over IP is very hot," said Joshua Segal, investment bank WR Hambrecht and Co's Israel-based representative. "The broadband infrastructure field will continue to be a hot field, but in terms of content, it is really too early for interactive television and the like."

Despite the recent "shakeout" in the field, Segal highlights optical networking as an area to watch in 2001. As for peer-to-peer networking:

"The industry needs a successful profitable model before it can justify the hype," said Segal.

Hype is an essential part of the lifecycle of a new industry sector, said Daniel Meron, technology analyst at Israeli investment bank Nessuah Zannex.

"Mobile Internet is somewhere between hype and actually doing it," said Meron. "Six months ago, WAP was the biggest thing, but now you need to develop something people really need. Broadband access was really hyped a year and a half ago and now we see things happening, but a lot of broadband access companies are going down."

He agrees that Internet telephony is coming into its own.

"I think that it is going to get stronger, because a lot of the hurdles such as the standards and the technologies are now behind us," he said. "Voice over IP is an example of something is going to get bigger and bigger and usage is going to increase."

Meron said the strongest part of Israeli knowledge is in infrastructure. This mainly concerns communications but also security software, software testing and imaging, he said.

In a year's time, when we are older and wiser, we may look back at this list and laugh, but meanwhile here are israel.internet.com's "Ten to Watch" in the coming 12 months, in purely alphabetical order. Whether you agree or disagree, or have your own suggestions, tell us what you think.

  1. Actelis Networks
    While everyone is talking fiber, Actelis Networks, established in 1998, is aiming to squeeze out optical fiber-grade performance from existing copper lines, saving the expense of laying new networks. The company has among its investors New Enterprise Associates, US Venture Partners and Vertex Management.
  2. Atrica
    In contrast, Atrica is pinning its hopes on a fiber-filled future. Founded in 2000 by ex-3Com employees and with $16 million in funding from 3Com, Accel Partners, Benchmark Capital and others, Atrica is developing optical Ethernet platforms for next generation metropolitan area networks (MAN).
  3. eZaro
    As the pipes grow, so will load on the server. Seven-month old eZaro is developing a software platform to distribute the load by exploiting unused network resources. The company, with founders from Gilat Satellite and a research manager who also heads the Israel Internet 2 project, received $2 million from STI Ventures in September.