July 1, 2005 Fast Forward Software's Shift Optimize July 2005, Issue 45 By Howard Baldwin The enterprise-software industry is shifting focus from products that reduce costs to ones that enhance revenue--and venture capitalists, at least, are welcoming the change. "We've been investing in companies that say to customers, 'We're not here to cut your costs. You're going to pay us millions of dollars, but in return you're going to make tens of millions,'" Paul Holland, general partner at Foundation Capital, said at the recent Enterprise Ventures conference. "I can't get enough of those companies." VCs are investing in infrastructure plays, such as security, service-oriented architectures, and reliability products. Users "are trying to get returns out of what they bought in the boom," said Drew Brousseau, managing director of SG Cowen & Co. "They need business intelligence and analytics; they need to back it up, they need to secure it, and they need to make it more robust." And VCs see startup companies meeting the challenge. "The post-bust generation of startups is more prepared and more realistic than ever before," said Holland. Copyright 2005 CMP Publications Inc. www.optimizemag.com. Article URL »