Virtualization solutions will find venture funding

In 2008, investments in start-ups that target consumers are expected to remain significantly hotter than those in companies building enterprise wares, as has been the case for the last few years.

However, there are a few areas in corporate IT that should see some significant interest, according to Paul Maeder, founding partner with venture capital firm Highland Capital Partners.

One of these is virtualization.

“Virtualization across the board is already hot, and it’s going to get hotter,” says Maeder. Once applied mainly to servers in the data center, this technique will find more applications as enterprises look to get their arms around unruly IT systems. “It’s getting more segmented, it’s going to pop up in a lot of places, but ultimately it all amounts to the same thing; taking something that’s currently uncontrollable, labor-intensive and vulnerable to security breaches and making it safe and more economical to operate.”

Another trend Maeder predicts for 2008 is, at long last, the death of antivirus software and other security products that allow employees to install and download any programs they’d like onto their PCs, and then attempt to weed out the malicious code. Instead, products that protect endpoints by only allowing IT-approved code to be installed will become the norm.

“There are much better approaches to dealing with external threats, and those approaches are going to take over,” he says.

Antivirus products won’t disappear overnight, Maeder adds, but will slowly fade into the background as enterprises embrace this new model. “Ultimately it’s the enterprise buyers who are going to decide what the structure of the industry is, and they decide that through their buying habits,” he says.

A third trend predicted for 2008 by Maeder is the ability to work around closed wireless networks, much like Skype opened up the opportunity to bypass wired networks.

“Carriers so far have a hegemony of closed systems; they decide what applications go on a phone and what comes over the airwaves. That has resulted in very slow innovation, versus the rate of innovation on the open Internet,” he says. “I think entrepreneurs are going to find ways to bypass that, and once they do there’s going to be enormous innovation.”

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