NetSuds May 2003 Monthly Report

NetSuds loves on-site tours! Email me if you want to show off your company. I can be reached at matt@netsuds.com. No tours this month.

The Business Journal reported that their daily email news reaches 5000 Twin Cities executives. The MHTA claims a little over 2000 people on their email list. Not bad but still a great deal less than the NetSuds and MedicalSuds email lists which reach 7200+ (yes, the lists are growing). The NetSuds email lists are double-opt-in and concentrated on professionals in the communications, IT and Internet markets. The MedicalSuds email lists are double-opt-in and concentrated on professionals in the medtech, biotech and life sciences markets. So, rather than spend your advertising dollars on any other email lists in the Twin Cities, consider the NetSuds and MedicalSuds lists. Contact matt@netsuds.com or 612.279.2154. For current ad rates, visit www.netsuds.com/adrates.htm.

4.3 VONAGE

Want to fire Qwest? I did. I cancelled a Qwest analog phone line recently and replaced it with a broadband phone line. For those of you skeptical of this, do what I did. Test it first. Everyone's broadband connection is different. The biggest issue is throughput. If you have enough bandwidth on your local loop, the quality of service is only dependent on the Internet connection to the VONAGE point of presence nearest the number dialed. I have had absolutely great voice quality experience from my home cable modem connection and reasonably good voice quality experience from my DSL connection at my remote office.

What are the pros and cons? First, the pros. One, the price is $39.99 for unlimited local and long distance calling to anywhere in the USA and Canada. Second, you get free voicemail which can be accessed via the PSTN or your web browser. I truly like the browser approach to voicemail since I can easily retrieve and store voicemails for future reference. I can also email them, put them on a website, etc. Third, I can get additional "virtual" phone numbers for $4.99. In other words, if my main phone number is 1-612-605-5252 (which it now is), I can get a 1-202-xxx-yyyy phone number which rings at my main number for just $4.99/month. That's great if I want to create a virtual office in Washington, DC and allow my DC customers to call me toll-free. Fourth, I can get nearly every Centrex feature free of charge. Fifth, I can move my phone to any broadband connection in the world easily. Sixth, E-911 works if I program it!

The downside on VONAGE is that it truly only works on one extension in your home or small office. Future releases of the product depend on equipment makers like Cisco. The other downside is this. Broadband connections are still not as reliable as good old POTS. If your broadband connection goes down, you are SOL for phone service. Of course, you can program the VONAGE phone to forward to your cell phone (or any phone for that matter). So, this is a nice work-around.

Check out www.vonage.com. It's hot! To hear more, come to the FREE NetSuds Evening Gathering on May 21 where you can speak to a VONAGE representative in person - www.netsuds.com/eg/.

4.4 CommWeb's Telecom Insider

I get this newsletter from CommWeb and find it very useful. Here is a recent newsletter with GREAT information.

TAKE THE AFFORDABLE PATH TO IP TELEPHONY WITH AVAYA

Here's your first step on the path to converged voice and data networking -- visit the Avaya Knowledge Center today. Access IDC Executive Briefs ($1,200 value) and discover your savings with our eCalc Tool.

http://www.avaya.com/aipt67

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tele.ticker

** Corporate Instant Messaging Ready To Take Off http://www.commweb.com/article/COM20030408S0002

** Cellphone Smartcards Would Let Users Roam Into Wi-Fi http://www.commweb.com/article/COM20030408S0003

** SALT Forum Opens Membership Structure http://www.commweb.com/article/COM20030401S0004

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EMPOWER YOUR CUSTOMERS WITH SMART SERVICES

MotiveSmart technology puts service at your customers' fingertips and connects them instantly to the information they need to solve problems. The world's leading companies use MotiveSmart services to provide their subscribers with the best user experience possible. Learn more about what MotiveSmart services can do for your company.

http://www.motive.com/ezine/

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1. WEEKLY NEWS ANALYSIS

*** Analysis: Don't Believe the Hype: RBOCs

The FCC's Unbundled Network Element (UNE) ruling on February 20, 2003 was probably the most eagerly anticipated telecom regulatory decision since the Telecom Act of 1996. It was supposed to finally deliver regulatory compliance, provide the basis for workable business plans, and facilitate service rollouts. And for the most part, it did just that - in the RBOCs' favor. With the new rulings, the Baby Bells got the grand prize - complete protection of their business DSL lines.

http://www.networkmagazine.com/article/NMG20030403S0003

*** Strategies: Measuring End-to-End Internet Performance

When is "best-effort" service not good enough? If you've ever run a high-performance application over the Internet, only to achieve less-than-optimal results, your answer to this question would probably be "too often."

http://www.networkmagazine.com/article/NMG20030403S0006

*** Fighting the Spam Monster - and Winning

A technology known as Bayesian filtering hints at a future where more than 99 percent of the spam now sitting in your inbox could be detected and blocked automatically. Several commercial vendors have introduced limited Bayesian technology in their products, but widescale adoption is probably a few years out. In the meantime, the best anti-spam solutions rely on a gauntlet of well-tested detection methods, such as heuristics, white and black lists, and signature matching.

http://www.networkmagazine.com/article/NMG20030326S0001

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SPECIAL CMP NETSEMINAR: FIREWALLS & ACTIVE DEFENSE

Firewalls primarily provide access control to network resources. While most do this effectively, they're not designed to detect and thwart application-layer attacks. Recognizing this reality, hackers have devised sophisticated attacks that circumvent the traditional access control policies enforced by perimeter firewalls.

In this special open-industry webcast, we'll specifically look at a number of these sophisticated attacks; we'll also detail how firewalls, particularly those based on Stateful Inspection, have maintained successful defense arsenals against network assaults, while carefully examining the growing trend towards firewalls that provide not only access control but also active defense at the network-layer to protect against application-layer attacks and hazards.

http://webevents.broadcast.com/cmp/wcs/index.asp?event_id=5692&loc=1

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2. WEIRDLY WIRED

Optical Fibers Woven By Spiders?

Scientists at the University of California may have created the next revolution in photonics - silk-based optical fibers created through an amazing amalgam of spider silk and ceramics.

According to the British journal New Scientist, engineers have successfully taken spider silk, coated it with a glassy silicate solution, and baked the mixture. When exposed to high heat, the silk burns away and the coating shrinks and turns to glass, leaving a hollow fiber whose core is just 2 nanometers wide (50,000 times thinner than human hair).

These "spider fibers" may be useful to the telecommunications and computing industries as nanoscale optical circuits.

3. Forum: Web Services & Security

Balancing open Web communications with the need for security isn't as hard as it looks. A new generation of standards may keep emerging Web services applications safe. You can weigh in, along with our panel of experts:

http://www.commweb.com/techcenters/main/roundtables/3787/COM20030326S0002

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For 16 years, SUPERCOMM has covered the accelerated growth of connectivity solutions. Be here for the premier annual communications and information technology exhibition and conference. Free registration closes May 2. Register now at

https://register.supercomm2003.com

June 1 - 5, 2003 Georgia World Congress Center, Atlanta, Georgia

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Questions About The Telecom Insider Newsletter? Contact Keith Dawson at kdawson@cmp.com with any comments or questions.

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CMP MEDIA LLC PRIVACY STATEMENT http://www.cmp.com/delivery/privacy.html

To unsubscribe to this enewsletter, please click here: http://www.commweb.com/test/unsubscribeTI.html

4.5 Free World Dialup FCC Petition: Update

From Jeff Pulver - jeff@pulver.com www.pulver.com

On April 2, 2003 it became clearer that the fight to keep Internet Telephony Regulation Free inside of the United States will continue to be an uphill battle.

For starters, both the States of Michigan and Minnesota filed against the Free World Dialup (http://www.pulver.com/fwd/index.html) petition. Their premise seemed a little bit out of the movie "Minority Report." These states joined the list of entities against the FWD petition which today include: BellSouth, SBC, the USTA and FBI/DoJ.

Those in favor of the FWD Petition include: AT&T, Qwest, Worldcom, Global Crossing, Cisco and the EFF.

The FBI/DoJ reply comments prompted some recent news stories, including a story in SecurityFocus posted to: http://www.securityfocus.com/news/3466

All of the reply comments, including our April 2nd reply, can be read by visiting:

http://gullfoss2.fcc.gov/prod/ecfs/comsrch_v2.cgi and entering: 03-45 in the Proceeding Box.

If there are Pulver Report readers from either the states of MI or MN who feel FWD should not be regulated in their states at this time, it couldn't hurt if you made this point well known. The Michigan reply was filed by the Michigan Attorney General's office on behalf of the Michigan Public Service Commission and the Minnesota reply was filed by the Minnesota Department of Commerce.

As a side note, special thanks to everyone who reached out in February and made your points with your respective State PUC offices. I heard back last Monday night (March 31st) during Spring 2003 VON that your voice and actions were noticed by NARUC. Thank you for your support.

4.6 Looking for a Venture Capitalist?

Infon provides access to every venture capital firm and partner worldwide for FREE! Click on the logo for more information. Search by industry, stage, round or geographic preference of 3484 firms, 3440 websites, over 30,000 people with over 17,000 email addresses. Download the entire database - rather than just search the website - for just $99. With over 400 different search criteria, you can pinpoint firms fast, export the contact information - including email addresses - and make contact with the right people. You can send thousands of contacts at once to a single Excel file to export to your contact manager.

4.7 NetSuds CEO Roundtable - Next Roundtables starting in June

NetSuds is opening up another group of CEO Roundtables in June 2003. The first meetings of the 3 CEO Roundtables occurred January 21, 22 and 23. Those three introductory sessions culminated in to one ongoing monthly session of participating CEOs. If you are tech or medtech CEO and want to join us, (the first session is free), contact matt.noah@netsuds.com. A synopsis of the CEO Roundtable can be found at www.netsuds.com/ceo/ It is repeated here as well.

NetSuds CEO Roundtable

Membership Only CEOs of tech and medtech companies are allowed to join the NetSuds CEO Roundtable. If you are a VP, CxO or President, you are not welcome unless you also hold the CEO title. Perhaps we will start a CFO, CTO or COO Roundtable but until then, we are only interested in the top dog, the CEO. If you are interested in becoming a member, contact matt.noah@netsuds.com. Membership is not automatic. There must be an available spot open in the roundtable. You must have employees. Your company must be incorporated. Your company must be a tech (communications, IT, software, Internet) or medtech (medtech, biotech, life sciences) company. You must pay a yearly fee of $1000 in advance. You may not send substitutes to the Roundtable.

Roles Unlike the days of knights, kings and Camelot, there is no king of the NetSuds CEO Roundtable; only a facilitator; Matt Noah, CEO of NetSuds.com, Inc. Knights are replaced by CEOs and the table won't be quite round.

Schedule The Roundtable will meet 10 times per calendar year. Our initial roundtable is meeting the last Tuesday of every month. Each meeting lasts between 1.25 and 1.50 hours starting at 7 am. A facility convenient to the majority of Roundtable members is used. A continental breakfast is served.

Our next introductory session (free) has been scheduled for June 2003. Attendance will be limited to just CEOs. Contact matt@netsuds.com if you want an invitation.

Purpose CEOs need resources to assist them in executing their duties and leading their companies. Boards of Directors and upper management are not always the best or most independent resources upon which to draw. The CEO Roundtable exists to provide CEOs with an independent resource of wisdom and shared experience. Your key 'take-aways' from the Roundtable will be accelerated learning - so as to avoid common and uncommon pitfalls -, an expanded network of advisors and colleagues and tools to enhance the productivity and value of your enterprise.

Content First, networking among the CEO members of a Roundtable is the best and richest content. Second, the Roundtable facilitator will schedule subject matter experts of interest to the CEOs. Examples include intellectual property, branding, sales, engineering, marketing, finance, compensation, human resources, M&A, etc.

Format Meetings will consist primarily of 2 elements. First, "content" will be presented and discussed. Second, "discussion" of common problems and solutions will take place. The facilitator will lead both elements or assign elements to certain CEOs.

Confidentiality Roundtable meetings are completely confidential. Nothing said in a roundtable discussion, short of illegal activity, leaves the meeting. This allows each CEO to feel comfortable discussing issues and subjects he may not feel comfortable speaking about with others.

4.8 My Friend Jeff Pulver

http://tinyurl.com/8nzn

4.9 A Venture Capital Firm Speaks

I received this email from Norwest Venture Partners. I found it refreshingly frank and informative. - Matt

Dear Friends of Norwest Venture Partners (NVP):

The year 2002 continued to be challenging for companies in the technology sector due to the lingering economic downturn. Many reports have indicated that it will likely require several years for private equity to return to normal as it will take time for company valuations to rise and the IPO and merger and acquisition markets to recover. Today, venture capitalists are focused on building strong, sustainable businesses so when liquidity options do emerge, the investments will be able to produce positive returns.

Although this economic revitalization will take time, we believe 2003 is filled with promising investment opportunities for early-stage technologies with significant long-term growth potential. In particular, we believe value propositions remain strong for various Enterprise Software and Communications Technologies companies as economic recovery takes shape. NVP primarily targets unique early stage businesses with superior management teams that have the potential to become industry leaders, but we will invest in all stages of technology depending upon the opportunity.

Year In Review

During the year, our franchise grew by five portfolio companies and we made follow-on investments in 19 of our current portfolio companies. Seven of our existing portfolio companies were acquired or merged, providing access to increased working capital and expanded distribution networks.

In 2002, key acquisitions included Resonext Communications (acquired by RF Micro Devices for $133 million), Acta Technology (acquired by Business Objects for $65 million), Allied Riser Communications (acquired by Cogent Communications) and Annuncio Software (acquired by PeopleSoft). Key mergers included Occam Networks (merged with Accelerated Networks), Veraz Networks (formerly NexVerse Networks, merged with NGTS - a division of ECI Telecom) and PowerMarket (merged with Tradec).

Enclosed you will find a review of our investment activities for the past year. These activities contributed to total venture investments of $107 million in 2002. This amount includes both $49 million in new investments and $58 million in follow-on investment activity.

Accolades

A number of our portfolio companies and general partners also received industry accolades this past year. In May, four NVP portfolio companies (Acta Technology, Inkra Networks, Rackspace Managed Hosting and Virtela Communications) were named to the Red Herring 100, recognized by Red Herring editors for their innovation and successful business strategies. In May, UPSIDE Magazine also named six NVP portfolio companies (Arbortext, Megisto Systems, Softface, Spinnaker Networks, Virtela Communications and Zettacom) to its "Hot 100" Private Companies list, UPSIDE's annual award recognizing excellence and innovation among the hottest technology industry startups.

Promod Haque, managing partner at NVP, was recently ranked #2 on the annual Forbes Midas List as a top technology venture investor, along with George Still, managing partner at NVP, who was ranked #13. In November, Promod Haque also received the "Venture Capitalist of the Year" siliconindia Leadership Award.

We would like to take this opportunity to express our thanks to the employees of our portfolio companies. NVP is only as strong as the businesses it supports, and those businesses are powered by the dedication, hard work and creativity of these valued employees. We also want to thank the many friends of the firm who referred new investment opportunities to us during the year. Your continued referrals and the assistance you extend to the companies in our network are invaluable and greatly appreciated.

In 2003, NVP will continue to build on its 40+ years of success funding innovative, unique technologies with long-term growth potential, and offering ongoing assistance to its existing network of portfolio companies. As always, we invite you to visit our website at www.nvp.com to learn more about our new and existing investments and explore opportunities for partnerships. We look forward to continuing to build our relationship with you in the coming year.

The attached 2002 Business Review file is in Adobe Acrobat pdf format. You will need to have the Adobe Acrobat reader in order to open this file. A free download of Acrobat is available at: http://www.adobe.com/products/acrobat/readstep2.html.

4.10 Mozo.com

Minnesota serial entrepreneur Dan Grigsby is at it again. This time his new start-up is called mozo.com; a website for sharing DVDs with friends an colleagues. As Dan states, "As with all good things, Mozo can be explained in three steps:

1) Join Mozo and catalog your DVDs.

2) Create a group, or groups, to share DVDs with and invite people to join it.

Make a group for you and your co-workers, another for your neighborhood, another for your place of worship, or any group of people in your life.

3) Share DVDs.

When the people you invite join, their DVDs are listed in the your group's catalog, where yo