And, by the way, kicking some dirt at bitter rival Vidyo.

“A couple of weeks ago we crossed the million minutes-a-week level,” Blue Jeans chief commercial officer Stu Aaron told me yesterday. “We’ve got thousands of paying customers.”

The company has been monitoring usage patterns on its existing payment plans — a minutes-based plan, a per-user plan, and a per-device plan — and is unveiling a new option Aaron thinks is the best one yet. It would appear that Blue Jeans customers agree — a hundred of them have been testing the new plan since November 2012, and they grew their usage of videoconferencing at ten times the rate of other Blue Jeans clients.

The new plan sees participating companies pay one annual fee, plus between $10-50 per month for active users — employees who use Blue Jeans videoconferencing at least once per month.

“It’s a site-license option,” Aaron says. “Everyone gets an account, everyone gets unlimited usage, for an attractive low annual fee. All employees have accounts, but you’re only paying for active users.”

The new pricing model will come in hand when competing with videoconferencing rival Vidyo, whose CEO recently called Blue Jeans out. Vidyo’s quarterly growth in billings was 68 percent, he said, while competitors were flat or down. And, he said, a five-person one-hour call on Blue Jeans costs as much as an all-inclusive, unlimited $30-a-month subscription to Vidyo.

Them’s fighting words, as the saying goes, and Blue Jeans accepted the challenge and knocked off the chip.

“That was not a correct statement,” Aaron told me. “Our customers are typically pay cents-per-minute or tens of dollars per month, and there’s no way anyone has an advantage over those price points.”

In addition, he said, Blue Jeans is growing fast, having reached the 50 million annual minute run rate — even assuming no further growth in 2013 — after just over a year in business. That means, Aaron says, that Blue Jeans is probably a quarter of the entire videoconferencing market.

“There’s 100 billion minutes a year used for audio conferencing, and 200 million minutes a year in video conferencing,” he said. “Since we’ve exceeded the 50 million minutes a year run rate, we’ve grown to 20-25 percent of the market.”

The new plan seems to be a hit.

Not only are existing customers adopting the plan and increasing their use of videoconferencing, 25 percent of Blue Jeans new customers signed up in April were signed up on the all-you-can-meet plan.

That’s impressive, and given Blue Jeans’ ease of use and wide compatibility with a vast array of devices and software (including Cisco, Polycom, Lifesize, Microsoft Lync, Skype, Google Video, WebRTC Browser, and smart mobile devices), it portends well for the company’s future sales as well.

One small caveat before small businesses get too excited: To get the $10/user price point, you need over 10,000 users. Less, and you’ll be somewhere between $10 and $50.

photo credit: iandavid via photopin cc

Notable this year is Apple, with its whopping $156 billion in 2012 sales, jumping into the top 10 for the first time in its 37-year history. And Google, with its big $50 billion year, bulled its way up almost 20 spots to hit No. 55. Perhaps most impressive, however, is Facebook, which with the youngest CEO in the Fortune 500 made the list for the very first time at 487.

Ranking companies by income is a fairly arbitrary measure, since it reveals little about how much companies actually earn, but it does show scope and scale. A grain of salt is definitely indicated, however, as Google’s profits, for instance, are many multiples of Dell’s despite that Dell is ranked No. 51 and Google is No. 55.

Here are the 41 technology companies that Fortune included on its list.

• 6: Apple
• 15: HP
• 20: IBM
• 35: Microsoft
• 49: Amazon
• 51: Dell
• 54: Intel
• 55: Google
• 60: Cisco Systems
• 80: Oracle
• 131: Xerox
• 133: EMC
• 176: Computer Sciences
• 163: Jabil Circuit
• 194: Qualcomm
• 196: eBay
• 218: Texas Instruments
• 222: Western Digital
• 240: SAIC
• 267: CDW
• 270: Liberty Interactive
• 302: Applied Materials
• 304: Motorola Solutions
• 318: Micron Technology
• 326: Corning
• 327: Broadcom
• 352: Congnizant Technology Solutions
• 379: Symantec
• 408: NetApp
• 420: Sanmina
• 429: Harris
• 436: Booz Allen Hamilton Holding
• 441: NCR
• 473: Priceline.com
• 464: AMD
• 477: Avaya
• 482: Facebook
• 487: SanDisk
• 489: Pitney Bowes
• 494: Yahoo
• 499: CA Technologies

A couple of caveats:

I have not included telecommunications companies such as AT&T and Verizon, although a good argument can be made that they are now, primarily, technology companies, simply because Fortune did not classify them in any recognizable technology category. And I have included retailers like CDW and companies like Pitney Bowes, which Fortune classifies in categories like Computers, Office Equipment, and Information Technology Services.

One interesting note: While Facebook has the Fortune 500′s youngest CEO, Dole Food’s David Murdock, at 90 years old, is the Fortune 500′s oldest CEO.

photo credit: mikesolita via photopin cc

Shapiro’s talking about videoconferencing pioneers Cisco and PolyCom. He’s talking about Innovator’s Dilemma-style growth. And he’s talking about $17 million in new funding the company is announcing this morning to expand even faster, building its total venture capital raised to $116 million.

Vidyo, the company that supplies the technology for Google’s Google+ Hangouts and Nintendo Wii’s videoconferencing, is disrupting the fast-growing video communications world on at least three levels, Shapiro said.

One is technology: moving from the big, expensive telepresence rooms to simple, cheap, built-in components. Another is moving from on-premises solutions to the cloud, and the third is Vidyo’s business model: revshare partnerships with carriers and other partners, like NTT Telecommunications in Japan, Google, and 24 other new telecom partnerships inked recently.

The technology transitions are key, the company says.

“PolyCom and Microsoft say they’re doing it, but not well,” Shapiro states. “We are by far the leader here.”

And his model, he says, is also much more competitive than innovative upstarts like Blue Jeans Network, because he’s betting on a lower price point and higher numbers. Blue Jeans Network, which offers in-browser video conferencing that connects to legacy systems as well as integrations with partners like Salesforce, charges $.30 per minute per leg of the call, Shapiro said, meaning that a five-person one-hour call on Blue Jeans costs as much as an all-inclusive, unlimited $30-a-month subscription to Vidyo.

“I believe the price point is just starting to erode,” Shapiro says.

Which is why Vidyo’s sales model is partners, who then leverage the power of their own networks for Vidyo and grow its sales without Vidyo having to maintain a large sales staff. The strategy seems to be working: Vidyo partners like Arizona State University, which is using Vidyo on its Internet2 deployment, are increasing their usage of videoconferencing by an average 18 percent per quarter. And CERN, the European science facility with the world’s largest particle collider, uses Vidyo so intensively Shapiro told me it has 15X Blue Jeans call volume alone.

“We want to price equivalent to a voice call,” Shapiro says. “Our competitors offer an inferior product for more money: Blue Jeans 15 time more, and other competitors 300 times more.”

I’m sure his competitors would have something to say about that, and it’s certainly the case that Blue Jeans and others offer features that Vidyo does not. But with $17 million new cash in his pockets, Shapiro is focused on the future.

“Things are going great, but we always find ourselves working on many things,” he said. “We want to make sure we have the resources to take advantage of the opportunities we see … it’s almost a land grab in the industry.”

The $17 million is almost all from existing investors, including in some cases general partners’ own money. Two-thirds of it is from Triangle Peak Partners. With the new cash, Vidyo will grow headcount from 285 to about 320, CFO David Kaminsky said.

photo credit: courosa via photopin cc

Here’s a quick overview:

Femtocells sell

Cisco bought femtocell and small cell manufacturer Ubiquisys for $310 million today.

Femtocells and small cells, apparently, are important for helping boost 3G and LTE reception in homes and buildings. Cisco SVP Kelly Ahuja said in a statement that “by acquiring Ubiquisys, we are expanding on our current mobility leadership and our end-to-end product portfolio, which includes integrated, licensed, and unlicensed small cell solutions that are tightly coupled with SON, backhaul, and the mobile packet core.

Boring stuff sells, apparently.

Cash for enterprise startups

Ignition Partners closed a new $150 million fund to focus on enterprise startups: business software and cloud computing. The fund is also opening a Palo Alto, Calif. office.

Human organs on chips

Hurel, the company that created a breakthrough organ-on-a-chip to replace skin allergy testing on animals, announced that it’s receiving $9.2 million Series A funding from Spring Mountain Capital. The funds will support the commercial launch of current products and continued R&D of its technologies and future products.

Space, infinity, and high-def

UrtheCast is launching the world’s first high-definition video platform of Earth, streamed live from the International Space Station. A new $25 million financing agreement is going to help that become a reality, apparently.

“When you begin using the platform, it will feel much like you’re interacting with a mashup of Google Earth and YouTube,” the company said.

Dollars for tags

Tealium raised $15.6 million from Tenaya Capital, Battery Ventures, and Presidio Ventures to continue building and marketing the “fastest, easiest to use, and most data-focused tag management platform on the market.”

Tealium’s total funding is now $27 million.

Big money for small loans

Small loan company Kabbage has closed a credit facility of $75 million, its largest to date. The company provides working capital to small business-owners so they won’t need to put personal assets on the line, like a house or car.

Victory Park Capital led the funding round, and equity investor Thomvest Ventures also contributed.

Integrating $37 million

API and data integration company MuleSoft raised $37 million from just about everybody. New Enterprise Associates led, with participation by other investors including Salesforce, Hummer Winblad Venture Partners, Morgenthaler Ventures, Lightspeed Venture Partners, SAP Ventures, and Bay Partners.

Hopefully, the company will use some of the money to brainstorm a new name.

Including the new round, MuleSoft has raised $81 million to date.

Mobile device management for $2 million, Alex

MokiMobility announced $2 million seed round from Epic Ventures, Allegis Capital partner Spencer Tall and Fusion-IO’s Tyler Smith.

And, briefly …

• EAT Club announced $5 million from August Capital for expansion beyond Silicon Valley.
• New York based startup BA Insight announced a $4.5 million round of funding with participation from all four of its initial investors: Milestone Venture Partners, Osage Venture Partners, Paladin Capital Group and Originate Ventures.
• Neon, the Carnegie Mellon University startup that uses cognitive neuroscience to improve online video clicks, has secured venture capital (VC) funding in a seed round led by True Ventures, a Silicon Valley-based venture capital firm. Terms were not released.
• iPad presentation creator Haiku Deck has raised a first round of $3 million from Trilogy Partnership, with participation from Madrona Venture Group, Founders Co-op, and various angel investors.

In 2012, 2,357 private technology companies were bought for a combined total of $84 billion, according to a new report from research firm PrivCo. That’s up 22 percent from 2011, but the real surprise is who is doing the acquiring.

Source: PrivCo

Most active buyers for 2012

The most acquisitive companies of 2012, Facebook and Google, each bought 16 companies. Surprisingly, the I’m-not-dead-yet Groupon bought 12, and even more surprisingly, Twitter tied with Cisco, a $112 billion perennial acquirer, with 10 purchases in the year.

Twitter, of course, is still a private company itself.

“Twitter actually buying as many companies last year as giant Cisco — and more than Apple, Oracle, SAP, Hewlett Packard, and other tech giants – that’s a first,” PrivCo chief executive officer Sam Hamadeh said in an email.

PrivCo plans to release its full 400-page report on mergers and acquisitions of private tech companies on Feb. 14. But the research firm gave VentureBeat a sneak peek today.

2012 was the biggest year for private tech company acquisitions since 2009, Hamadeh said. Companies like Facebook and Twitter rose to the top in part due to the phenomenon of “aqui-hiring,” buying a company simply — or mostly — to acquire its employees. In Facebook’s case, PrivCo’s report highlights that a lot of that happened before its May IPO, which of course, was a major carrot to dangle in front of the targeted companies.

The biggest category? Think enterprise.

Software beat out Internet services for the top spot, PrivCo says, with nearly 600 deals. Internet services ranked second with just over 400 deals, followed by communications, networking, and storage with about 300, and consulting with about 150.

The top two categories combined outweighed all the other categories combined:

Source: PrivCo

Top tech sectors for acquisitions – 2012

As per usual, Silicon Valley ranked highest in terms of number of deals, with 329. New York was second with 151, and Chicago ranked third at 81 acquisitions. That’s a surprise, to an extent, but remember that Groupon, which ranked third in terms of number of acquisitions in 2012, is based in Chicago.

In addition, PrivCo says, Chicago is home to Thoma Bravo, which “ranked as the No. 1 most active private-equity firm acquirer of private tech companies last year.”

Average deal volume was $36 million.

photo credit: racineur via photopin cc, PrivCo

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Few things show the turning of the technological tide more than Gartner’s global semiconductor report, released today. Together, mobile device giants Samsung and Apple bought 15.2 percent of CPUs and other chips sold in 2012.

Both grew spectacularly, with Samsung up 28.9 percent, and Apple up 13.6 percent, while HP and Dell dropped 12.7 and 13.4 percent, respectively. Samsung’s purchases topped out at $23.9 billion, and Apple bought $21.4 billion worth of chips for phones, tablets, and other devices.

“Although Samsung and Apple continue to go from strength to strength, other leading electronic equipment makers fared less well,” Gartner research analyst Masatsune Yamaji said in a statement, adding that six of the previous top 10 reduced their demand in 2012. That top 10, who together consume $106.4 billion of the total $297.6 billion semiconductor market, includes Toshiba, LG, Cisco, and Nokia.

Speaking of which, Nokia was spectacular as well — if you count flameouts. The fading Finnish phone company dropped its purchase of semiconductors by a staggering 42.6 percent, representing $3.6 billion in chips. Overall, the market was down 3 percent, Gartner said.

But not only is the guard changing, the product mix is changing.

“The PC market still represented the largest sector for chip demand, but desktop and mobile PCs did not sell well, as consumers’ interest shifted to new mobile computing devices like smartphones and media tablets,” Yamaji added.

That has implications for overall profitability, as chips that go in phone and tablets cost lest than the latest and greatest chips for desktops and laptops.

Source: Gartner

Top 10 semiconductor buyers

photo credit: samsungtomorrow via photopin cc

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Cisco Systems announced on its blog today that it will acquire Denver-based BroadHop for an undisclosed sum. The technology will be used to shape mobile data traffic and will be folded into Cisco’s service provider networking group.

According to Cisco’s VP of Corporate Business Development, Hilton Romanski, global IP traffic is projected to increase threefold in the next five years. For this reason, the networking giant had its eye on BroadHop, a policy control and service management technology for carrier networks that has been around since 2003. BroadHop is deployed by more than 70 wireline and mobile carriers around the world.

BroadHop has an open policy platform, which is designed to make it easier for service providers to control and monetize any service, regardless of whether the network has new or legacy components. In a nutshell, the technology allows a carrier to develop service tiers based on bandwidth or application.

According to Romanski, the technology will benefit Cisco’s service providers, as users will be incentivized to purchase ”customized premium service packages,” such as on-demand streaming.

The BroadHop team will report to Shailesh Shukla, vice president and general manager of Cisco’s software and applications group.

The networking giant acquired three companies last month — most recently, Cariden for $141 million in cash. In an interview with VentureBeat, Cisco’s cloud computing CTO Lew Tucker stressed that the company is always on the look-out for potential acquisition opportunities to bring innovation to its suite of products.

However, GigaOm’s Kevin Fitchard pointed out, Cisco is not the first to jump on board the policy bandwagon. Aging giant Citrix whisked away Bytemobile earlier this year.

Sept. 9 - 10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Cisco is working with a community in Orlando, Florida to create a “Smart+Connected” city in Lake Nona, one of eight global iconic cities — and the first in the U.S. — built with ubiquitous connectivity and interconnected building, transportation, utility, and civic systems, for a truly smart, networked city created for innovation.

Ultimately, the community will house 25,000 people on 7,000 acres, with $2 billion in construction of new hospitals, a medical school, and a community college slated for the next decade. When complete, Lake Nona systems will enable massive integration in data and management systems from public safety to transportation, medical facilities to learning spaces, offices to homes, and more.

“It is a technology story and it is not a technology story at the same time,” Anil Menon, Cisco’s president of globalization and Smart+Connected communities, told me last week. “The questions we’re asking are how can the network enable new ways of building a community, living in a community, being in a community?”

With its iconic connected cities, Cisco is exploring the concept of network as platform, which delivers technology as a service that is built into the infrastructure of a community, rather than grafted on afterwards. Most cities, Menon says, were designed as physical infrastructure. Cisco’s new smart-connected cities are designed on a digital level at the same time as a physical level, creating the electronic infrastructure that enables a smart city.

Source: Lake Nona

Part of the Lake Nona development from the air

“When most cities are designed, they think about water, electricity, and so on … but  they never think about digital,” Menon said. “We are not going to design anything fragmented — it has to be integrated.”

One example: Lake Nona will have have cellular connections points not just in scattered towers, but all throughout its buildings, enabling much better phone and WiFi service. In addition, instead of AT&T, Verizon, and Sprint all building their own towers, the connectivity infrastructure will be created once, and all carriers will run on the same hardware.

When complete, Lake Nona will feature more than 20 smart services, the company said in a statement, including integrated data and voice and wireless services, fiber to the home, digital signage, common area IP video surveillance, energy management systems, unified communications, video and collaboration.

But the goal is not just connectedness — the company behind Lake Nona, the Tavistock Group private investment firm, is looking to create a center of innovation.

So Lake Nona is being designed to be a research and development center for medical technologies, with six different research, training, and treatment centers. Community builders studied other innovation centers such as Silicon Valley, San Diego, and Research Triangle Park in North Carolina, and incorporated elements of each.

“We’re creating an innovation ecosystem, with housing, retail … all the elements of a community, in a thoughtful way,” Thaddeus Seymour, Lake Nona’s Senior Vice President said.

And yes, given that Lake Nona is in Florida, the Lake Nona group even checked out Celebration, the city that Disney founded in the 1990s.

One difference? Lake Nona will probably have more networking capability in a block than in all of Celebration’s 7,500 acres.

photo credit: Express Monorail via photopin cc

The layoffs, which are one of the largest single layoffs this year and appear to be the largest single cut Cisco has ever made, amount to about 9 percent of Cisco’s total work force and 15 percent of executives at the vice president level and above. About 2,100 of those employees elected to participate in a voluntary early retirement program. The cuts will cost the company a one-time charge of $1.3 billion, of which $750 million will be recognized during Q4.

The cuts are much larger than predicted in previous reports, which expected a four percent (or 4,000 employees) downsizing of Cisco’s total work force.

The layoffs are part of Cisco’s larger restructuring plan set forth by CEO John Chambers, who pledged to shave a billion dollars from the company’s annual budget.

Along with the layoff announcement, Cisco said it will sell a set-top box manufacturing facility in Juarez, Mexico to Taiwan-based Foxconn Technology, the manufacturing giant that acts as the sole contractor for Apple’s iPad assembly. The sale will include the transfer of about 5,000 employees from Cisco’s payroll to Foxconn’s, effective the first quarter of the fiscal year 2012.

Previously, Cisco cut 550 jobs when it shut down its Flip video camera division in April 2011. The last time the company had such a large number of layoffs was 2002, when the company had to take a multibillion-dollar write-off after the dotcom crash and cut 2,000 jobs.

The Verizon Games with GameTanium desktop application is made possible by Exent’s GameTanium digital distribution technology, which allows users to start playing a game while it downloads the rest of it in the background. Users will be able to play free for a couple of weeks and then have the option of paying $14.99 a month for a subscription to the service. The companies say that with this option, there’s less risk gamers will buy a title they think is good but turns out to be a dud. It’s another example of how big brands, in this case a major phone and broadband service provider, see games as a way to engage more closely with consumers.

Jason Henderson, games product manager at Verizon, said in an interview that early feedback from test gamers has been overwhelming and that 20 – 40 percent are signing up for the service after trying it out. Those gamers are player up to 50 hours a month and are trying out 10 different games during that time. The games include casual titles such as Bejeweled as well as hardcore games such as Assassin’s Creed.

“We’re giving you the ability to access your games all in one place,” Henderson said. “Our model is all you can eat.”

The service is not like server-based game service OnLive, which offers games that are instantly playable from any device. Those games are stored on servers, not on the individual user’s computer. By contrast, users first download Verizon Games app in order to play Verizon Games. That lets them browse through the list of games on the portal. Then they have to download each game they want to play. In that sense, the service resembles Valve’s Steam digital distribution software. But the difference is that users have to pay for each game on Steam, whereas Verizon is giving access to all of its games for one monthly subscription fee. Users who don’t want to sign up also have the option of playing ad-based games for free.

The offering taps Exent’s GameTanium service, which has an easy-to-use navigation interface that is designed to appeal to a mass market audience, not just hardcore gamers. You view games by clicking on an arrow that rotates a carousel sideways, not unlike Apple’s iTunes user interface. Henderson says Verizon Games is targeting all consumers and believes the offering will go well with the company’s FiOS fiber-optic broadband service.

Verizon is trying to get its millions of customers to sign up for the FiOS service, which is so fast it makes game downloading relatively painless. The service has a built-in social network for gamers, who can create their own profile and avatar. The gamers can decorate their own Verizon Games Lounge with virtual items. They can earn trophies and prize points while playing games on the service. Exent handles back-end infrastructure such as billing and payments.

Jason Akel, vice president and general manager of Exent, said that his company worked on the custom game app for Verizon for more than two years. Exent is offering a white-label service that will create a digital game distribution for any brand that wants to jump into gaming. But Verizon will be able to claim that it has the world’s largest catalog of PC downloadable games. More unannounced brands are also planning on using Exent’s service, Akel said. Exent also has its own ad-supported free gaming site, Free Ride Games.

Besides Steam, rivals include casual game sites such as Big Fish Games, Oberon, Wild Tangent and Real Networks’ Game House. But Verizon, which had $107 billion in revenue last year, has lots of money to pour into marketing for the service. It’s conceivable that Verizon could do other kinds of deals, such as partner with mobile phone service provider Verizon Wireless, which it partially owns. But Henderson said there is nothing to talk about yet on that front.

The games-on-demand service is the latest twist for Exent, which started out with a proprietary digital rights management technology company and then moved into an entertainment services business. The company was founded in 1992 and has 120 employees. The company has raised $35 million and is profitable. It has been growing at a compound annual rate of 55 percent since 2004. Investors include Intel, Cisco, Time Warner and New Enterprise Associates.