1. The State of the Technology Industry Overview and Discussion

2. Overview Industry Industry Innovation Innovation Funding Funding Workforce Workforce Of Note Of Note

3. Industry Is it expanding or contracting? Growing in number of companies or employees (or both)? 10) A Twenty Year Anniversary 10) A Twenty Year Anniversary 9) Washington’s Computer Companies 9) Washington’s Computer Companies

4. WSA 20 Years Later Founded in 1984, the WSA is the oldest and largest state-wide technology trade association. Sept 22 nd Steve Balmer Keynote 1984 Bruce Milne, The Corum Group “ Back then we were 300 companies with only 1000 employees...even MS wasn't that big. Now, 20 years later, we are 11,000 companies employing 130,000 with a greater impact on the state's economy than aerospace. ”. 1985 Paul Brainerd, The Brainerd Foundation “ In 1985 we introduced PageMaker 1.0 and created a product category called desktop ” 1993 Mike Slade, Starwave “ Starwave was sold to Disney in a long series of transactions, eventually valuing the company in 1998 at about $1 billion. ”

5. WSA 20 Years cont … 1995 Randy Conrads, Classmates.com “ Classmates has been profitable every year since 2001. Today Classmates.com covers school, work and military affiliations for more than 38 million members in the U.S., Canada, Germany and Sweden Classmates.com was ranked #4 for Consumer Paid Online Content Revenue - for the past TWO years! ” 1996 Stuart MacDonald, Expedia “ Expedia began in 1996 as part of Microsoft, with the wacky idea that maybe we could use this “ web thing ” to help people plan and purchase travel. ” 1996 Stuart MacDonald, Expedia “ Expedia began in 1996 as part of Microsoft, with the wacky idea that maybe we could use this “ web thing ” to help people plan and purchase travel. ” 2002 Dave Anastasi, Captaris “ We've installed over 80,000 systems in 44 countries, with 99 of the Fortune 100 using our e-document delivery, business process workflow and information exchange and delivery solutions to reduce costs and increase the performance of critical IT investments. 2002 Dave Anastasi, Captaris “ We've installed over 80,000 systems in 44 countries, with 99 of the Fortune 100 using our e-document delivery, business process workflow and information exchange and delivery solutions to reduce costs and increase the performance of critical IT investments. 2003 Ed Lazowska, University of Washington “ Every top technology region in the country is anchored by one or more top research universities. UW plays that role for the Puget Sound region. ”

6. Washington ’ s Technology Companies Microsoft Microsoft Hiring 5,000 in the next year Hiring 5,000 in the next year Looking for the High End Looking for the High End Boeing Boeing Hiring as we speak Hiring as we speak Internships ongoing Internships ongoing Intel Intel Just down the road Just down the road

7. WA Technology Companies … IntelWRQRealNetworksCaptarisCorbis Lockheed Martin 3 rd Mountain Technologies Unisite Excell Data Corporation Primus Knowledge Solutions BSquareIBMdigiMineOracle Jetstream Software LoudEye Technologies BsquareAgilianTalismaEDS Novell Americas Nintendo

8. WA Technology Companies … Expedia Advanced Interactive Systems InternapAventail Safe Harbor NetReflectorAttachmate Dexterra, Inc. EnvisionOpsware Screenlife LLC NOT TO MENTION WeyerhaeuserRussell Washington Mutual DOT Swedish Hospital Port of Tacoma Highway Patrol SafecoStarbucks

9. WA Technology Companies … Locally… Prepared Response NewTech ITI Services Advanced Interactive Systems Topia Technologies SiteworksOpticFusionSagemMorpho

10. WA Technology Companies.. Finally New Kids on the Block New Kids on the Block Trumba Trumba http://seattletimes.nwsource.com/html/businesstechnology/2002196324_jaech04. html http://seattletimes.nwsource.com/html/businesstechnology/2002196324_jaech04. html http://seattletimes.nwsource.com/html/businesstechnology/2002196324_jaech04. html http://seattletimes.nwsource.com/html/businesstechnology/2002196324_jaech04. html Mobliss Mobliss http://www.mobliss.com/index.jsp http://www.mobliss.com/index.jsp http://www.mobliss.com/index.jsp Isilon Isilon http://www.isilon.com http://www.isilon.com http://www.isilon.com Persuadio Persuadio Brand spanking new Brand spanking new

11. Innovations What new technologies or applications of technology are on the horizon. 8) Patents and Innovation 8) Patents and Innovation 7) Entrepreneurs 7) Entrepreneurs

12. Patents and Innovation Through the eyes of UW Tech Transfer Through the eyes of UW Tech Transfer Fast Facts Fast Facts Innovation Innovation –UW researchers annually disclose more than 200 inventions, discoveries, and software programs. Investment Investment –UW TechTransfer filed more than 130 patent applications in FY04 for discoveries made by UW researchers. Impact Impact –Seven new companies have formed around technologies licensed from TechTransfer in FY 04 The two biggest sources are Engineering and Medicine. Engineering outpaced Medicine for the first time in five years in FY04

13. Patents and Innovation Through the private sector Through the private sector Patents Patents Trade Secrets Trade Secrets Trademarks Trademarks Copyright Copyright

14. New Ideas Blogging Blogging New media rules, new work rules, new election rules. New media rules, new work rules, new election rules. PodCasting PodCasting The Semantic Web The Semantic Web http://news.com.com/Next+big+step+for+the+Web--or+a+detour/2100-1032_3-5605922.html?tag=nefd.lede http://news.com.com/Next+big+step+for+the+Web--or+a+detour/2100-1032_3-5605922.html?tag=nefd.lede

15. Entrepreneurs Washington had the highest per capita rate of start ups in the nation. Washington had the highest per capita rate of start ups in the nation. Washington had the highest mortality rate of start ups in the nation Washington had the highest mortality rate of start ups in the nation Prosperity Partnership Prosperity Partnership Over the Hump, Crossing the Chasm Over the Hump, Crossing the Chasm Student Examples Student Examples D-Shift, MistyRain D-Shift, MistyRain

16. Funding for Technology IPOs IPOs Venture Capital Venture Capital Angel Angel Banks Banks Friends and Family Friends and Family

17. IPOs What they mean to you Private to public Private to public Stock Options Stock Options No longer the darling No longer the darling http://news.com.com/Tech+takes+a+backseat/2100-1030_3-5604294.html http://news.com.com/Tech+takes+a+backseat/2100-1030_3-5604294.html http://news.com.com/Tech+takes+a+backseat/2100-1030_3-5604294.html 71% of year 2000 Tech IPOs are trading below their offer price if at all. 71% of year 2000 Tech IPOs are trading below their offer price if at all. Yet, over the last year Yet, over the last year Google Google Salesforce.com Salesforce.com

18. Funding for Technology Venture Capital Funding Venture Capital Funding Reversing a three year sequential decline Reversing a three year sequential decline OVP OVP Madrona Venture Group Madrona Venture Group 25.3 Million to LoudEye 25.3 Million to LoudEye Angel Investment Angel Investment Alliance of Angels Alliance of Angels “$199.65 million of venture capital was invested in 21 Washington- based companies during Q3 2004. The average deal size in Q3 2004 was $9.51 million. The amount of venture capital raised during Q3 2004 is significantly up from Q3 2003 by $104.65 million, or 110.16%. The total venture capital raised by Washington-based companies in Q3 2003 was $95 million in 18 companies with an average deal size of $5.28 million.” “$199.65 million of venture capital was invested in 21 Washington- based companies during Q3 2004. The average deal size in Q3 2004 was $9.51 million. The amount of venture capital raised during Q3 2004 is significantly up from Q3 2003 by $104.65 million, or 110.16%. The total venture capital raised by Washington-based companies in Q3 2003 was $95 million in 18 companies with an average deal size of $5.28 million.” Capital Hunter special report Capital Hunter special report

19. Funding Washington Technology Center Washington Technology Center WTC is a statewide economic development agency focused on technology and innovation. WTC channels state, federal, and private resources to help companies develop and commercialize new products and technologies. WTC is a statewide economic development agency focused on technology and innovation. WTC channels state, federal, and private resources to help companies develop and commercialize new products and technologies. Small Business Administration Small Business Administration Friends and Family Friends and Family

20. Workforce 5) Pipeline and Graduates 5) Pipeline and Graduates 4) The University of Washington’s role 4) The University of Washington’s role 3) Legislative Support 3) Legislative Support

21. Pipeline and Graduates Technology Alliance Report Card Technology Alliance Report Card Not Keeping Pace Not Keeping Pace Downturn in Interest Downturn in Interest Focus should be on K-12 Focus should be on K-12

22. The University of Washington’s Role Institute of Technology Institute of Technology Paul G. Allen Center for CS and Engineering Paul G. Allen Center for CS and Engineering High End Degrees High End Degrees Motion Sensors Motion Sensors

23. Legislative Support Current Activities in the State Current Activities in the State Congressman Adam Smith Congressman Adam Smith Congressman Norm Dicks Congressman Norm Dicks Senator Maria Cantwell Senator Maria Cantwell Senator Patty Murray Senator Patty Murray Participation Participation

24. Of Note 2) Off shoring 2) Off shoring 1) Hiring 1) Hiring

25. Off Shoring WSA statement WSA statement http://www.wsa.org/resources/government/papers/WSA_offshore_outsourcing.pdf http://www.wsa.org/resources/government/papers/WSA_offshore_outsourcing.pdf Washtech Statement Washtech Statement http://www.washtech.org/reports/ http://www.washtech.org/reports/ My Statement My Statement It’s the reality of a global economy. It’s the reality of a global economy.

26. Hiring Intern if you can Intern if you can New jobs every day New jobs every day Experience still a catch Experience still a catch Getting better all the time Getting better all the time

27. Questions