Title	Technology Sector Humming
Date:	2/13/2005
Author:	FRANK NELSON NEWS-PRESS STAFF WRITER
Source:	Santa Barbara News Press

Santa Barbara’s technology sector enjoyed a real uptick in 2004, says Dennis Cagan, businessman, tech guru, early stage investor and chief executive officer of the Santa Barbara Technology Group. “I see that continuing to accelerate this year,” says Mr. Cagan, who points to a raft of company takeovers and mergers during 2004 as evidence of a buoyant and healthy local tech industry. The Santa Barbara area is bursting with creative, ambitious, passionate entrepreneurs who have great ideas and great products. But before long, they are almost all going to need money.

Mr. Cagan says venture capitalists and angel investors alike need reassurance that before they get into a deal, there’s going to be a satisfactory way out. And reassurance, he says, is what they have been getting watching the events of 2004. “All kinds of optimistic stuff has been happening,” he says. “When prospective VCs see that, it gives them a comfort level there’s going to be an exit strategy. They know there’s going to be an end score if they get into the game.” Mr. Cagan says that in 2004 he saw an unusual jump in the number of “liquidity events,” with more companies being bought, sold, merged, raising money and even going public than in the previous four years combined. Among those that caught his eye were:

Mission Research Corp., a privately held Santa Barbara company specializing in security and military technology, was sold to Minneapolis-based Alliant TechSystems for about $230 million.
Bargain Network Inc., a comparison shopping service, was bought by Vertrue Inc., of Stamford, Conn., for more than $27 million.
CallWave Inc. became the first Santa Barbara business to go public in several years. The telecommunications software company offered 4 million $10 shares.
Fastclick.com Inc., an online advertising services company, completed a $75 million round of funding.
Hendry Telephone Products of Goleta was bought by Telect Inc., headquartered in Liberty Lake, Wash., for an undisclosed amount.
Envenergy, which develops and markets remotely controlled systems to monitor and manage the energy needs of buildings, merged with Colorado-based Encorp.
Miramar Systems, a privately held Santa Barbara software company, was bought for an undisclosed sum by global giant Computer Associates International.
SkyPipeline, a wireless Internet service provider that started life in Goleta before relocating to Camarillo, announced a $25 million merger with NextWeb.
NuSil Technologies, Carpinteria-based manufacturer of silicone components used in health care, aerospace and electronics, bought Fullerton-based Morehouse-COWLES and Massachusetts company Lightspan.
Also at the start of the year Citrix Systems Inc., of Fort Lauderdale, Fla., completed its acquisition of Santa Barbara-based ExpertCity, changing the local company’s name to Citrix Online. The ongoing demand for remote and mobile computing products coming out of Santa Barbara — Citrix GoToMyPC, Citrix GoToMeeting and Citrix GoToAssist — suggests the parent company may have got a bargain, even at $225 million. In the fourth quarter of 2004 alone, Citrix Online added $17 million to the bottom line. These products provide more than 100,000 companies worldwide with secure, remote and mobile access to their network infrastructures without investing in expensive equipment, installation or training. “Citrix Online solutions empower businesses to rapidly and successfully take their workforce productivity to the next level to achieve greater profitability,” says Brett Caine, company president.

Partly as a result of the influence of UCSB, Santa Barbara County continues to be a breeding ground for a huge range technology ventures, especially in the areas of software, semiconductors, the Internet and telecommunications. Some companies, such as Santa Barbara-based TMC Communications, reach into more than one of those areas. TMC’s recently-released ClearPro is described as a revolutionary new service that uses Internet protocol to provide all of a company’s telecommunications needs while reducing monthly phone bills by 25 percent to 50 percent. The company says no other product on the market can deliver long distance, local and data via the Internet through a single, secure connection. ClearPro is available across California and will be introduced in Arizona, Nevada, Washington and Oregon this quarter.

There has been a great deal of talk around the idea of using the Internet to cut costs and improve service, and I am proud TMC is the first company to figure out how to make it happen for businesses right here in our home state,” says John Marsch, TMC’s chairman and CEO. This area’s entrepreneurial diversity is well illustrated by Mr. Cagan’s own investment portfolio, to which he expects to add three new ventures this year: Scamsafe is an Internet-based service that helps consumers recover their identity after it has been stolen; Nutricate has the patents and technology enabling restaurants to print out sales receipts with all the nutritional information for the meal you ordered; and Saludent is an Internet-based software enabling dental hygienists to manage their own practices. “There is such a lot of software and Internet talent in Santa Barbara,” Mr. Cagan says. “We have a great pool of people here. I can’t help but be optimistic about 2005.”