Tech as a sector could double from about $2.4 trillion to about 10% of global gross domestic product and Microsoft reckons the cloud and ancillary areas around it, such as artificial intelligence, are the growth engines to achieve this.
Nadella is well positioned to help achieve the market expansion and its own growth as the covid-19 crisis has certainly been the signal that change is needed or happening in almost all other parts of the economy.
Budgets have gone out of the window, whether for the covid winners, such as cloud computing to digital health and online education, that have seen revenues jump or for those hit hard in the opposite direction.
Like a tornado touching down, the effects are different but work and the economy look different.
Corporate venturing should thrive when there is disruption and opportunities.
Ryder System, a New York-listed supply chain and transport provider, has set up RyderVentures as a corporate venture capital fund to invest $50m over the next five years, while Nasdaq-listed medical equipment company Intuitive Surgical has launched a $100m CVC fund and Genesia Ventures has multiple corporations as limited partners (LP) for its latest.
These are the flipside to yesterday’s editorial looking at disguised CVCs – independent firms with a sole or majority corporate LP.
But regardless of structure it seems there is convergence about firms looking for financial as well as strategic returns and thinking how best to support the entrepreneurs to achieve their goals.
The success of groups, such as Nio Capital, the fund manager affiliated to China-based electric vehicle maker Nio, which now has a near-$35bn market capitalization six years after launch, is instructive in thinking about how ecosystem development can support a core business. Under Yair shacked, Nio Capital raised dollar and yuan funds with corporate and institutional LPs by understanding the full value chain.
While scaling-as-a-service providers, such as RocketX, can help, the most effective tools are a handful of well-networked people understanding the corporate parent, startups and peers.
The ideas of open innovation shared a generation ago by Clay Christensen and Hank Chesbrough have been intellectual underpinnings for corporate venturing to take off. But the models of buy, build, partner and invest now surfacing rely on scaling and speeding up innovation and corporations remain vital, as the World Intellectual Property Organization’s annual report identifies.
