Q&A: Drew Clark, IBM's Venture Group


drew-clark-headshot2.jpgDrew Clark, IBM’s Director of Strategy for its Venture Capital Group, knows his team isn’t dominating the venture world – and that’s the point. They don’t actually have a fund, but are a group of two dozen IBM execs that work with startups and venture capitalists to find and support companies that can ultimately send the company business.

Clark and his crew have started to focus closely on the clean tech sector – areas like the intelligent grid, energy management, water management, green IT technologies, data center efficiency, and sensor technology. Basically where IBM can use its history in information management, network integration, and software to move into newer industries like energy and water.

We grabbed a cup of coffee with Clark to get his take on the intersection of IT and green:

Q). How can IBM play in cleantech?

A). We look at energy as an information technology problem and we look at it in the way a corporation would think about how IT can run their business more efficiency.

We focus on indirect investment – no capital upfront, but we’re going to invest resources, time, skills, expertise.

Q). What are ways IT can change the energy industry?

A). The energy grid still uses network protocols. At the end of the day it’s all about network protocols and packaging information and distributing information. It’s all about data management. Imagine millions of sensors sensing how much capacity you have on this side and how much you have on that side.

There’s a holdover in the energy. Variable pricing is a fact of life and the energy industry is moving there. The airlines abandoned that whole model a long time ago – they would hold seats and if you came on board at the last minute you’d get one. They don’t do that anymore; they oversell planes. What happens in the wireless world? You buy minutes and if you don’t use them – tough. The energy industry will get there.

Q). What are the 5 most promising startups you are working with?

A). Gridpoint, a smart grid company. Miartech, a Chinese maker of standards-based wireless transmission chip sets that enable the information to flow over the powerlines,
Sensicore, an Ann Arbor-based water management company spun out of the University of Michigan. Synapsense, a data center intelligence technology company. Fat Spaniel, a renewable energy accountability company.

We are looking for lots of companies that know how to put embedded sensors to work; companies that have analytical programs that can help us make better sense of the data that we do get.

Water management is not a popular area for VCs right now. This is a sleeper area.

Q. So you said the company is interested in solar?

A. We know silicon pretty well. We used to build all our own chips. We’ve since become less of a vertical company and we have lots of part suppliers now, but we still maintain that core competency around silicon. That expertise is particularly valuable when you are looking at things like solar devices that are primarily still silicon, despite the thinfilm and nonsilicon stuff, whicb is mostly fringe at the moment.

So we know a lot about packaging, materials, silicon processes, all of the necessities of being able to do PVs more effectively and more efficiently. So we have been talking to the leading manufacturers of PVs about being possibly a supplier or being somewhere in the supply chain.

Q. Is there a clean tech bubble?

A. Sure. Its over solar and bio. Absolutely. There is a lot of money going in there and it may have some consequences downstream as some profits are taken. But I don’t see enough investment in this other stuff. There is a vacuum around water, and not an over abundance of money in advanced energy management. IBM is mainly concerned with areas that aren’t in the bubble.

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