Intel Plans "Major Thrust" in SANs

Even as doom and gloom prevail over the venture capital industry, Intel Capital says it's still ready to fund startups in the storage networking and optical networking markets.

That's the word from Les Vadasz, Intel Corp. (Nasdaq: INTC) executive vice president and president of Intel's investing arm, who spoke with Light Reading after a panel discussion sponsored by Silicon Valley's Churchill Club Thursday night.

"We're going to make a major thrust in storage networking -- if not in storage companies, then in the electronics that make storage work," says Vadasz, whose division is a leading investor in optical and communications startups (see Intel Capital Still Looking for Deals). As for optical networking, Vadasz says there's still plenty of investment opportunity ahead, since Intel thinks optical "is still where the semiconductor business was in the 1970s."

Vadasz's optimism was a departure from the mood of the rest of the panel, which seemed hell-bent on scaring everyone away from wanting to work at a high-tech startup. Setting the tone for the evening was Bill Meehan, a managing partner with consultancy McKinsey & Co., who opened the discussion with some haunting tidbits from a VC research project McKinsey recently completed.

According to Meehan, there are still "thousands of overvalued" startups in VC portfolios, whose valuations "need to come down by 70 percent or more" to match similar public-company valuations.