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  the Software View: Above the (Pacific) Rim. The land of the rising Sun. (Part II)

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Now, dear readers, on with this week's episode of the Software View!

In 1997, aware of the enormous success United States technology venture funds were enjoying, Yao set about raising his own such fund. He approached friends and relatives in Taiwan, people who had made money in industries such as textiles but wanted to invest in up-and-coming businesses, not mature ones.

Yao and Cheah felt they had the right kind of experience. But what they wanted to do - a fund aiming at high-growth Internet companies - was a big leap in Asia. They also wanted to run their fund in a non-traditional way: working closely with entrepreneurs, using their own expertise and their set of contacts in a hands-on manner to help the companies grow - "a Silicon Valley way of doing business," Cheah says.

There was a third principle. They wanted to be a trans-Pacific fund. That meant splitting the business physically from the first day. Yao moved back to the United States, and the firm's first American office was in his parents' home in Danville, California. Is Silicon Valley blind to Asian opportunities? Not necessarily - the Valley's venture capitalists typically have more local business than they can handle already.

AsiaTech isn't the only venture capital firm with American ties to focus on local tech and Internet investments, of course. But AsiaTech has been the boldest in the moves it's made. Major United States companies have long been sinking roots into the region's financial soil. Chip-making giant Intel Corporation, for example, has a myriad of Asian investments that could pay off in a big way.

About $1 billion (United States dollars) in managed funds is currently aimed at Asian technology ventures, with corporations such as Intel investing or planning to invest another $2 billion or so in the regional technology market. That's a pittance compared with what's happening in the United States of America, but it's a lot more than what Asia was seeing until very recently.

AsiaTech, having been so early to this market, has a leg up on the competition. Entrepreneurs are flooding in with ideas, and the firm is getting a crack at "some pretty good deals," Yao says. Cheah said that the object of AsiaTech was to bring "young start-up companies and take them to the peak" as the AsiaTech logo shows the two Chinese words, beginning and peak. Entrepreneurship is rampant in the region, but it's not precisely the same kind as in Silicon Valley. Core technologies will probably continue to come from the United States, Yao says. But as Asia goes through the same Internet revolution that is sweeping America, there's plenty of opportunity to create regional dot.com brands and businesses.

Sun Microsystems took that idea to the National Computer Board in Singapore in order to help spread the Java technology message in the Asia Pacific region. The fund is open to any company which develops Java applications for use in the Asian market.

THERE'S NO PLACE LIKE SUPERHOME.NET

Property developer Sun Hung Kai Properties, Limited and Sun Microsystems announced a strategic alliance to develop SuperHome.net, a Web site offering residents value-added information, news, entertainment and other services. SuperHome.net, combining broadband Internet access with multimedia applications based upon Sun's Java technology platform, that can be customized for each user, will offer electronic commerce capabilities. Sun's chairman, Scott McNealy, said the concept of a residential electronic community environment would become a lifestyle convenience of the same magnitude as the cellular phone. Sun Microsystems and Cable & Wireless Hong Kong Telecom announced a co-operative alliance to deliver a range of electronic commerce and Internet-based services using Sun's iPlanet software.

ASIA MAJOR

Sales in Asia are shining on Sun. Sun Microsystems is seeing a healthy recovery in its Asian sales after a two-years long lag, according to Michael Barnes, head of Sun's South Asian Government Programs. "This year has had a very accelerated pace with Asia's first quarter sales being fifty to sixty percent ahead of last year's sales," Barnes said, referring to overall sales in Asia, not just government programs. "Sun is in various areas in Asia, ranging from telecommunications to education. But our government business usually is the lagging indicator, and its rapid success this year is a good sign that we are well into the recovery," he said.

Barnes said Sun was following a strategy of building "smart partners" across Asia who could work with their respective governments to create software programs that could then later be exported. "We are looking at any place where applications can be hosted on Sun platforms for resale elsewhere," he said, adding that a recent company project was with the Malaysian government. Barnes said Sun was also pushing for clear government policies regarding electronic commerce in Asia.

The Asian market is booming. Internet use in the region is growing almost as fast as in Europe, and governments are gradually opening up their telecommunications markets to foreign investment. Sun is but one of many technology and Internet related firms waiting to get into China and other Asian markets. Other firms, such as America Online and Yahoo!, already have dipped into their coffers for a piece of what is expected to be a booming Chinese market once trade agreements are ironed out.

Strict regulatory regimes in China and other fast-growing countries have kept foreign telecommunications and Internet companies on uncertain footing, however. World trade officials who met in Seattle hope to change this situation with a new set of international trade agreements.

Sun is spreading seed money around the world to gain a foothold with firms that are building high-speed data networks. But Asia has a particular attraction, as broadband networks could facilitate online distribution of software. Officials from the World Trade Organization gathered to discuss whether to open a new round of trade liberalization, which would included telecommunications issues. If completed, the talks could spark a new round of investment in networks worldwide, boosting Internet traffic and the value of existing networks. "It's a case of hedging their bets all around the world," Forrester Research analyst Jeanne Shaaf said. "We are talking about a world economy here."

"Java will be the technology underpinning a new economic revolution in Asia as companies develop and utilise local developer talent to bring in new methods of working," said AsiaTech's Cheah. There are currently over one million Java programmers worldwide, a figure expected to triple by the year 2002. "In China alone there are more than 100,000 Java users with every major University using the software technology to train its computing students," he said.

Incorporating local language and cultural and operational features in applications will provide the local producers with an edge over the established multinational developers," said AsiaTech's Yao. "I believe, given the current discussion about creating a knowledge-based economy and developing a strong electronic commerce industry in Asia, the launch of this fund is extremely timely."

Sincerely,
Mark Kuharich

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