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To: Steve Morytko who wrote (52194)	8/16/1998 3:09:00 PM
From: djane	Read Replies (2) \| Respond to of 61433

German Industrial Giant Starts Silicon Valley Venture Fund sfgate.com Tom Abate Saturday, August 15, 1998 One of Germany's technology giants has dipped its toe into the Silicon Valley venture pool by opening a $300 million fund to invest in networking and telecommunications startups. Siemens AG is a $70 billion industrial Frankenstein that grafts together 16 different divisions, including electric power generation, chipmaking, computing and telephone equipment. Given its size and complexity, Siemens isn't noted for speed, which is a liability in the fast-moving telecom equipment business, where it competes with U.S. firms like Lucent and Cisco Systems. That's why Siemens executive Anthony Maher said the company chose Mustang Fund as the name of its new venture arm, which will be headquartered in Santa Clara. ''A mustang is something that moves fast and has the image of being free-wheeling,'' said Maher, who introduced the new fund to local VCs at a Thursday night dinner in Palo Alto. Only time will tell whether the fund will fit the name. Siemens will target startups in three telecom-related areas: technologies that carry voice and data over the same lines, equipment to create broadband or wireless networks and software to help manage such networks. Peter Morris, telecom partner at New Enterprise Associates, said that in addition to cash, Siemens could offer startups access to markets in Europe and Asia. ''Telecom startup investments is an area where Cisco has had an effective monopoly,'' he said. ''Siemens is going to challenge that.'' In addition to its venture fund, Maher said Seimens will also be looking to acquire full-grown telecom players. With an eye toward merger possibilities, investment bankers George Boutros and Bill Brady of Credit Suisse First Boston hosted Thursday's dinner, which introduced the fund's manager, Bjoern Eske Christensen, to local VCs. -- Speaking of giants: Three years ago, IBM seemed like a wounded beast. Not any more. In everything from semiconductor and disk-drive manufacturing to mainframe computing and enterprise software, Big Blue is showing newfound strength. Last month, the tech world's 800-pound gorilla made a subtle but strategic move to enhance its role as a driving force on the Internet, by luring Mike Nelson to IBM's Internet division. Nelson has been the Internet lobe of Al Gore's brain since 1988, when he joined the staff of the then-junior senator from Tennessee. Stephen Wolff, former director of the National Science Foundation network, ancestor of to day's Internet, recalled working with Nelson and Gore on the legislation that created five national supercomputing centers and a network that linked them. That eventually led to the current Net boom. Nelson ''is an extremely bright guy,'' said Wolff, who joined Cisco in 1995. Nelson, who followed Gore to the White House and later worked at the Federal Communications Commission before joining IBM, said his new job would let him continue stitching together the Internet. ''IBM has a global reach, it's involved in hardware, software, services,'' Nelson said. Nelson will continue to work in Washington.