Israel Innovation 2.0

Inside Israeli Technology

Globes reported today that SAP’s recent announcement that it was cutting 6% of its global workforce (3,000 jobs) would likely include some layoffs to its Israel division.  

Despite its reaching €3.5 billion revenue for the fourth quarter in 2008, SAP’s software sales were down 7%. According to Globes,

SAP co-CEO Leo Apotheker said, “The cost containment measures will allow us to adapt to the tough market conditions and ensure the long term competitiveness of the company. We expect 2009 to be a year of limited visibility, making it increasingly difficult to project sales in this environment.”

Currently based in Ra’anana, SAP has had a presence in Israel since 1998 and has over 900 employees. According to the Israel R&D site, Matimop, the Israel division of SAP focuses on the following four areas: SAP Netweaver (BPM), SAP Business One (Small business solutions), supply chain execution, SAP Master Data Management (MDM).

The article also reports that despite looming layoffs, the company is hiring sales people. Here is a video example of Business One in action. 


SAP Business One

axxanalogoEarlier this month, Jon Brodkin of Network World named Axxana to his list, “10 start-ups to watch in ’09“. Today, he included the enterprise storage company as one of five vendors who are pushing flash technology for the enterprise in “How flash is changing storage…

In October 2008, Axxana exited stealth mode at the Storage Networking World conference to introduce its enterprise data recorder, which is similar in idea and design to an aviation black box. Amidst a crowded database storage and recovery market, Axxana’s innovative technology promises no data loss, unlimited distance and cost effectiveness. 

According to Axxana’s website

“EDR (enterprise data recording) combines aviation Flight Data Recorder (Black Box) expertise with newly developed technologies to address today’s most pressing data protection challenges – data loss, distance between primary and EDR data centers and cost.

The Axxana Phoenix System (Black Box) is located near the storage system at the primary data center and records a synchronous data stream from the storage. At the same time, an asynchronous data replication system is moving data to a secondary data center (the remote recovery site). The Phoenix Black Box has to protect only the Gigabytes of data that would have been lost in a typical asynchronous replication scenario. Data is protected inside the Black Box during the course of the disaster and can be immediately extracted.”

Phoenix system

Data extraction in an emergency is achieved either by:

* Physically locating the system by tracking the homing signal and connecting a laptop with an Axxana software component to the Phoenix System™ at the disaster site, or
* The self sufficient and well protected system transferring the data to the secondary site using highly resilient cellular broadband technology.

The technology is the first to achieve all of the following:

* Zero post-disaster data loss (RPO=0, as with synchronous replication)
* Unlimited distance to DR data center (as with asynchronous replication)
* Quick data recovery (very short RTO)
* Significant operational-cost reductions for data protection by enabling the use of existing data center assets, and low-cost commodity communication lines

According to Brodkin, the Phoenix System is currently in Beta and will be available at the end of the first quarter. With a cost in the six-figure range, the Phoenix will appeal most to customers in the financial services, healthcare, manufacturing, retail and government industries.

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During the week of January 18, 2009, business was back to normal for better and for worse. Announcements were made that Israel is planning the largest desal plant and Varonis and SAManage received funding. On the other end, the Israel Venture Capital Research Center released VC funding numbers for the fourth quarter of 2008 that were expectedly very low and promising social search engine, Delver announced that unless it receives more funding or gets acquired in the next few weeks it will cease its operations. For these and the rest of the 18 Israel-related headlines from the week of January 18, check below. 

Cleantech

1. Israel plans largest desal plant in $513M deal

2. Cleantech Expert: “In Financial Crisis Context, Israeli Solar Energy Companies Could be Shining Stars”

Investments and Economy

3. Aviv VC raises half of what it hoped

4. EMC leads $15m round for Varonis

5. Global crisis hits local venture capital industry

6. Nokia, Intel Slump Torpedoes Israel Economy as Rockets Grounded 

7. SAManage Secures Series A Funding from Xenia Venture Capital

Information Technology

8. BPM VIEWPOINT: The Opportunity in Unstructured Business Process Management (ActionBase)

9. Cordys Process Factorytrade; Wins Best Cloud Management Solution

10. Leading Industry Analyst Positions Magic Software in Three Quadrant Reports on Application Infrastructure

11. ClickSoftware launches new system for customer interaction management

12. Kontera and Advertising

Telecom

13. Which companies will Nortel take down in its crash?

14. Skuku Embeds GIPS VoiceEngine

15. AudioCodes Announces Availability of VoIPerfect and High Definition VoIP on MIPS Technologies’ Cores

Miscellaneous

16. Michigan, Israeli companies share business growth ideas

17. Peres invites new envoys to join science and tech R&D council

18. Social Search Engine Delver On Death Watch

Though 2008 was clearly a tough year for companies and venture capital funds in Israel and worldwide, several announcements this week have given a better picture of the extent of its impact on Israel’s Silicon Wadi.

Globes reported this past week that Aviv Venture Capital raised $52 million for its Aviv II Fund last month but had originally set out to raise $100 million. It was also announced that social search technology startup, Delver, will be ceasing its operations in the next 30 days unless it raises necessary funds or gets sold.

In addition to these, research on venture capital funding in the fourth quarter of 2008 from the Israel Venture Capital Research Center shows how the global recession affected fundraising in Israel overall. According to a Jerusalem Post article on the research, in the fourth quarter, 109 Israeli hi-tech companies raised $394m. which was 34% below the $600m. raised in the previous quarter and 22% below the $503m. raised in the fourth quarter of 2007.

It’s not just on the funding side. Nortel’s recent bankruptcy filing has raised questions about what toll it will have on Israeli companies that were financially intertwined with it through business contracts and partnerships. Israeli companies expected to take a hit include AudioCodes and TTI and possibly Radvision and Alveron.

Things might continue to be gloomy and hard in 2009, but it won’t be the end of innovation and entrepreneurship in Israel. The layoffs that have been a result of the economic crisis are producing a new crop of entrepreneurs and startups that will have better skills to succeed in the long term using less money should they survive the downturn.

samanage_logoSAManage, a provider of on-demand (SaaS) IT Management services with an R&D office in Israel, announced today that it has secured an undisclosed amount of Series A Funding from Xenia Venture Capital and existing investors to help support its growth and development of new SaaS-based services.

The company, which was was founded in 2007 by Doron Gordon, offers solutions for IT Asset Management, IT Risks Management, License Management and more. In September 2008, SAManage made its IT Contract Management software available for Salesforce.com users as a free AppExchange application. The software enables users to manage the organization and tracking of IT contracts, software licenses and subscriptions. 

SaaS Industry outlook

According to an InformationWeek article by Andrew Conry-Murray in November 2008, a Forrester Research report released at the time predicts that while SaaS-based IT management currently accounts for 1% of IT management software, it is expected to grow to 10% of the market by 2013 because it offers cheaper and faster deployments. The report also predicts that enterprises with 1,000 or more employees will account for 50% of SaaS installations in 2009 and that while the Big Four (BMC, IBM, HP and CA) are active in the cloud, “complex applications can’t quickly be retooled for SaaS, giving upstarts time to secure enough customers to flourish.”

Additional SaaS Information

  • An Aberdeen Group survey of over 130 enterprises found that top companies are implementing SaaS successfully and “view their use or planned migration to SaaS as a long-term solution.”
  • Research from Gartner analyst Michael Maoz predicts that by the year 2012, 30 percent of investments in CRM will be via software-as-a-service (SaaS). (via Lauren McKay of DestinationCRM.com) 
  • Interest in SaaS has lead to several acquisitions by vendors, including Cisco’s acquisition of WebEx, Dell’s purchase of MessageOne and Google’s purchase of Postini among others.
  • Other Israeli SaaS companies include: Clarizen, G.ho.st, Magic Software, PNMsoft, Confidela and Nolio Ltd. 
Tal Chalozin

Tal Chalozin (circa 2000)

Business Week has announced that topping its 2008 Best Young European Entrepreneurs reader poll is Innovid’s 27-year old co-founder and chief technology officer, Tal Chalozin.

Innovid was founded by Chalozin and, CEO, Zvika Netter in 2006 and provides a platform “that allows the integration of brand advertising into relevant video content.” The technology promises to solve the problem that publishers and advertisers have faced regarding monetizing online video.

In a post on TechCrunch about Innovid after it received $3 million in Series A funding in March 2008, Mark Hendrickson explained how the technology works as follows:

“The virtual items facilitated by Innovid are basically 3D objects that producers insert into videos post-production. They’re intended to look as realistic as possible so that they blend in with the real physical environment recorded by the video. And yet, they can’t go entirely unnoticed because users are encouraged to click and perform mouse gestures with them to derive additional functionality (for example, to view a popup description about the particular item with links to external resources).”

While the technology is promising and owes a lot to Chalozin’s leadership and innovation, that’s not the only thing that does. Chalozin and others at Innovid have been very active in the past few years in the Israeli technology non-profit, GarageGeeks, which provides a “physical and virtual space for innovative and creative people to introduce, network, expose, create, brainstorm, innovate and build.” In the past year alone, attendance at its monthly events has more than doubled and there is now a need to limit the amount of participants.

It was originally through GarageGeeks that Chalozin and Netter got to know angel investor Jeff Pulver who provided the early funding before the Series A round that has made it possible for Chalozin and Innovid to reach the international level of recognition it has achieved.

Israel-based ClickSoftware Technologiesclicksoftware_logo, a mobile workforce management and service optimization solutions provider, recently announced its new solution for customer interaction management and the addition of it to the ClickSoftware’s ServiceOptimization Suite

The new solution, ClickContact, automates the process of customers scheduling and maintaining appointments over the Internet in a way that gives them more control and flexibility while reducing the staff costs and responsibilities of the company. It also enables customers to provide feedback in an organized manner in which a company can act on. 

According to ClickSoftware website, ClickContact features include:

  • Integrated with ClickSchedule to maintain consistent service policy
  • May be deployed on-premises or as a hosted solution
  • Enables integration into corporate web site
  • Online appointment scheduling, updating and/or canceling
  • Automatic notifications, including appointment confirmation, reminders and real-time updates, available via text message, voicemail or email
  • Customer satisfaction surveys available immediately following service visit
  • Look & feel, notification defaults, notification templates and customer survey all fully configurable to meet customer needs

Other solutions making up the ServiceOptimization Suite include ClickMobile, ClickSchedule and ClickLocation. 

ClickSoftware solutions are currently being used in industries such as Insurance, Telecommunications, Utilities and Home Services. 

Company Facts

Founded in 1997.

Moshe BenBassat, Chairman and CEO.

Hannan Carmeli, Chief Operating Officer.

Products: ClickSchedule, ClickContact and ClickMobile.

Website: www.clicksoftware.com

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During the week of January 11, 2009, the war in Gaza escalated and news about Israeli tech companies continued. The biggest news of the week was that multi-touch technology company, N-Trig raised $24 million in its latest round of funding, the majority coming from Microsoft. Better Place announced its partnership to bring electric cars to Canada while Aladdin agreed to be acquired after months of talks with Vector Capital. Other information security companies, Trusteer and Commtouch also made headlines with important security threat findings. For links to these stories and more, check out the complete 12 Israel-related headlines from the week of January 11, 2009 below. 

Cleantech

1. Better Place Partners with Ontario to Bring ‘Car 2.0’ Electric Car Infrastructure to Canada

2. Eilat to host major international energy conference

Investments and M&A

3. Information security provider Aladdin is to be acquired by Vector Capital for $160 million

4. Microsoft leads $24m round for touch screen co N-trig

Information Technology

5. Phishing attack uses pop-up message on bank sites

6. Shunra Software Joins Microsoft Visual Studio Industry Partners Program 

7. IDV Solutions and Eternix Announce Technology Integration for Innovative Geospatial Solutions for the Defense & Intelligence Industry

8. RiT Technologies launches Paladin environment and security management suite

9. User Generated Content Sites Breeding Ground for New Internet Security Threats Says Commtouch Trend Report 

N-Trig

10. N-trig Secures $24 Million of New Funding to Fuel Hands-on computing™ Growth in Global PC Market

11. Microsoft Betting Big on ‘Touch’

12. CyberLink and N-Trig Introduce Next-Generation Multi-Touch Enabled Applications at CES

Over 120 people attended the “Greening of Jerusalem,” cleantech forum that took place at the Jewish Agency yesterday. The event was sponsored by the Jerusalem Business Networking Forum (which I’m a co-organizer of), the CleanIsrael Network, the Renewable Energy Association, the Movement for Strengthening Jerusalem and the Ministry of Industry and Trade and featured presentations by local government officials, including Naomi Tsur, and representatives from Jerusalem-based cleantech companies, including The Patent Factory and 3G Solar.

The event came at the suggestion of David Waimann, Founder and CEO of Cequesta Water, a wasterwater company, and was intended to build momentum among government officials and the general public to be more active in reviving Jerusalem’s business environment through cleantech and to inspire Jerusalemites to take a more active role in practicing cleantech to make it the cleantech center.

Naomi Tsur and panel

Naomi Tsur and panel

Speaking after the government representatives and before the cleantech comanies was Glen Schwaber, Partner at Israel Cleantech Ventures. Schwaber gave an overview of Israel’s cleantech history (dating back to early agricultural innovations after the State was established) and mentioned some of the most successful companies to date as well as company funding from the VC point of view. 

The event was partially in Hebrew and partially in English.

In this video David Waimann explains his company, Cequesta Water’s technology:

ntrig_logoThe breaking news that Steve Jobs of Apple  is taking a medical leave of absence for several months makes the news from earlier this week of Microsoft investing in Israel- and Texas-based N-Trig gets even more interesting.

Earlier this week, N-Trig, the sole provider of DuoSense™ technology which combines pen, touch and multi-touch into one device, announced  it successfully raised $24 million in its latest round of funding for the purpose of funding ongoing strategic partnerships with original equipment manufacturers (OEMs) to develop multi-touch notebooks that will reach a wider market.

Investors in the round included Canaan Partners, Evergreen Venture Partners, Aurum Ventures and Challenger Ltd. In addition to these venture capital firms, none other than Microsoft Corp. also invested. The investment comes as part of its efforts to build more pen and touch applications into its next-generation Windows 7 operating system and as part of its racing Apple to multi-touch. 

To date, N-Trig’s DuoSense Technology is already used in Dell’s Latitude XT and Hewlett-Packard’s TouchSmart x2 and the company announced last week with CyberLink Corporation that they are developing multi-touch-enabled solutions for PCs worldwide together to increase that amount. Though it’s unlikely, it will be interesting if Apple’s plans will be in any way hindered while Jobs is away.

N-Trig was founded by Dr. Meir Morag in 1999 after he previously co-founded e-Sim. The company is lead by CEO Amihai Ben-David and has raised some raised some $73 million while growing to over 100 employees over the years. Last year, “Globes” rated N-trig as one of Israel’s most promising start-up companies.

How does multitouch technology work? Lenny Engelhardt, VP of Business Development at N-Trig explains in this video: