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To: Lizzie Tudor who wrote (15363)	12/17/2002 3:02:22 PM
From: Bill Harmond	Read Replies (1) \| Respond to of 57684

Yes. Ciena acknowledges it, too.

To: Lizzie Tudor who wrote (15363)	12/17/2002 3:45:51 PM
From: damniseedemons	Read Replies (1) \| Respond to of 57684

RFPs are not a significant indicator. Telcos commonly issue them with: 1) little intention of actually buying something. 2) AFTER they have already selected a vendor but want to look like they are doing due diligence (often, the preselected vendor indirectly helps write the RFP). this is, seriously, just because some product manager wants to look like he's doing something. Trials aren't very much better.

To: Lizzie Tudor who wrote (15363)	12/17/2002 5:00:25 PM
From: stockman_scott	Respond to of 57684

VC Funding Falls 60% in 2002 Byte and Switch News Analysis December 17, 2002 Venture Capital investment fell 60 percent this year, but 2002 was still the fourth-highest investment year in the history of venture funding, according to a report published today by Ernst & Young and VentureOne. Close to $19 billion has been invested in more than 2,500 venture capital transactions in the U.S., Europe, and Israel year-to-date. The vast majority of the cash was devoted to supporting existing venture-backed companies, as liquidity opportunities -- through IPOs, mergers, and acquisitions -- grew progressively scarcer, the report says. "The industry has faced several significant challenges, such as the difficult fundraising environment, significantly fewer liquidity opportunities, and the upcoming impact of the Sarbanes-Oxley Act on VC-backed companies," says Gil Forer, global leader of the venture capital advisory group at Ernst & Young. "Previously, certain elements concerning financial reporting could be implemented after the IPO; now it must happen way before, so taking a company public will be more expensive and will take longer," Forer says. Startups will essentially have to implement systems and controls that were not needed before, requiring more capital. "VCs will review their exit strategies and perhaps look more to M&A, but it will be a case-by-case basis. For some, IPO will still be the best way," says Forer. Still, it’s taking longer than anticipated to work through the pool of companies created by the 1999-2000 funding frenzy. "We're still looking at over 11,000 private companies worldwide," says John Gabbert, VP of Worldwide Research at VentureOne. "Roughly 10 percent of those are profitable... Of the remaining pool, some have succeeded in raising additional venture capital, but the majority have scaled back their operations to a level that, while sustainable, will not yield the desired returns for their investors." Unlike the majority of IT investments that spent 2002 wallowing in the mud, storage networking startups have seen a fair bit of action. Close to 30 storage companies completed M&A activity this year. For 2003, storage software startups are expected to scoop up the majority of M&A deals, while the flock of next-generation NAS hardware players will string out the pennies to make it through the year (see Startups: The Next Generation). Bob Grady, managing director at the Carlyle Group, says the fact that there is a lot less money chasing this stream of innovation is good news for investors. Grady refers to a return to "rational" valuations at a median of $10 million -- down from a peak of $26 million in the second quarter of 2000. On a positive note, historically top-quality companies are funded in downturn years. Shining examples include: Cisco Systems Inc. (Nasdaq: CSCO - message board), Apple Computer Inc. (Nasdaq: AAPL - message board), Ciena Corp. (Nasdaq: CIEN - message board), and Genentech. — Jo Maitland, Senior Editor, Byte and Switch byteandswitch.com