The 100 companies on this list share two important characteristics: they have embraced innovation and the editors of Red Herring believe they will benefit from the 10 trends that we foresee dominating the technology industry in 2005.

The perils of this process are obvious; we know that more than once in 2005, some companies that we passed on will score spectacular successes and won't hesitate to point this out to us. We understand, and we will humbly admit we were wrong. We know that any list, no matter how carefully selected, will reflect the biases, shortsightedness, and ignorance of the people doing the choosing. What those who didn't make the list will be less willing to admit is that the chosen also reflect the wisdom, experience, and care that the selectors gave to all the entries.

In our defense, it wasn't all our fault that some good companies were overlooked. The editors of Red Herring plowed through 1,200 entries to pick the 100 companies on this list. It was a long and difficult process. Almost every company that applied had some redeeming value, which they weren't shy about telling us. While we suggested lengths for explanations in each section of our online entry form, many companies just blew past the limits in their submissions. The logorrhea didn't always help. Many entries seemed to be cut and pasted from marketing materials that had been ground out by a jargon machine. The most frequently used buzzwords (we kept score): integration and optimization.

The amount of gobbledygook we had to plunge through indicates that a lot of technology companies need to polish their elevator pitches. More than once, an application left all the editors on the selection committee baffled about just what a company did for a living. The companies were so busy "integrating" and "optimizing" that they forgot to mention what business they were in or what advantage they had over competitors.

We do have a clear understanding of the 100 companies that we ultimately chose for this list. They are driving change, upsetting the status quo, and creating new markets. Read on and see for yourself.

A4Vision

Address: 840 W. California Ave. Suite 200, Sunnyvale, CA94086

Phone: 1-408-446-1133

URL: www.A4Vision.com

Founded: 2001

CEO: Grant Evans

Employees: 76

Funding: $23.3 million, 2 rounds

Key Investors: Menlo Ventures, EuroQube, Logitech, Hanna Ventures, Sunrise Capital, TAKO Ventures, FusionTech, StanfordUniversity

Why have facial recognition in only two dimensions when you could have all three? That?ЗЦs the idea behind A4Vision, a startup trying to tap into the identity authentication market that IDC estimates will be worth $887 million in 2005. The company has developed a device that shines light onto a face, then uses a video camera and complex topographical algorithms to measure the way the face distorts the light. For the company to compete in a market crowded with retina and fingerprint scanners, smart cards, and RSA tokens, it will have to deliver a low-cost, quality device.

AirDefense

Address: 4800 N. Point Pkwy.Suite 100, Alpharetta, GA30022

Phone: 1-770-663-8115

URL: www.airdefense.net

Founded: 2001

CEO: Anil Khatod

Employees: 88

Funding: Self-funded

Key Investors: N/A

AirDefense?ЗЦs monitoring devices and intrusion-prevention software for wireless networks claim 24 percent of a market that will be worth $200 million in 2005, according to Frost & Sullivan. AirDefense?ЗЦs product monitors wi-fi traffic from a central server, and if an intruder is detected, the system can either send a tactical air-strike or cut the digital flow at its source. Thanks to a partnership with networking giant Cisco, AirDefense can blast rogue access points off the network from the switch level. The company will have to leverage its partnership to get market share.

Airespace

Address: 110 Nortech Pkwy., San Jose, CA95134

Phone: 1-408-635-2000

URL: www.airespace.com

Founded: 2001

CEO: Brett Galloway

Employees: 190

Funding: $58 million, 4 Rounds

Key Investors: Battery Ventures, Fidelity Ventures, Northwest Venture Partners, Storm Ventures, Hotung Capital, KTB Ventures

Airespace has deployed wireless local area network (WLAN) systems for more than 300 clients including Fidelity, Dunkin Donuts, and Oracle. With added security features, voice functions, and location capabilities, Airespace has been adding customers interested in an advanced network for a lower cost. The company says its WLAN system goes for 60 percent of the capital costs of their competitors. Analysts have reported marked growth in the enterprise WLAN segment and the Dell?ЗЦOro Group ranked Airespace No. 2 with growth of 48 percent in the second quarter of 2004. But with observers speculating that the key wired network players might soon incorporate WLAN, Airespace?ЗЦs future might meet a Cisco shakedown.

AirMagnet

Address: 894 Ross Dr., Suite 200, Sunnyvale, CA94089

Phone: 1-408-400-0200

URL: www.airmagnet.com

Founded: 2001

CEO: Dean T. Au

Employees: 70

Funding: $4.6 million, 3 rounds

Key Investors: Acer Technology Venture Fund, Ven Global Capital Fund

Now that corporate networks are migrating to wi-fi, CTOs realize that they have to guard their airspace. Frost & Sullivan estimates the market for airspace security will grow to $200 million in 2005, and AirMagnet?ЗЦs monitoring devices and intrusion-prevention software claim 46 percent of the market. The devices watch wi-fi traffic and correlate strange behavior in a central server. If the software detects an intruder, the system can assault the device with a series of queries, effectively rendering it impotent. AirMagnet is the leader today, but some impressive up-and-comers undoubtedly have their eyes on its business.

Akonix Systems

Address: 600 B St., 18th Floor, San Diego, CA92101

Phone: 1-619-814-2300

URL: www.akonix.com

Founded: 2000

CEO: Peter Shaw

Employees: 70

Funding: $21 million, 2 rounds

Key Investors: Menlo Ventures, Mission Ventures, Palomar Ventures, Windward Ventures

Soon after email became the enterprise communication method of choice, along came instant messaging, or IM. Since most employees use public IM applications like Yahoo Messenger and AOL?ЗЦs AIM, companies have few ways to take advantage of the benefits of the instant message. Akonix Systems offers its customers a single system to monitor, archive, and manage different IM platforms. The system introduces policy enforcements, spam-over-instant-message (SPIM) filters that enable companies to avoid worms and viruses. While Akonix has seen booming business, employees will be none too happy to find their formerly free-flowing IM monitored by the corporate eye.

Alien Technology

Address: 18220 Butterfield Blvd., Morgan Hill, CA95037

Phone: 1-408-782-3900

URL: www.alientechnology.com

Founded: 1995

CEO: Stavro E. Prodromou

Employees: 150

Funding: $146 million, 7 rounds

Key Investors: New Enterprise Associates, Sevin Rosen Funds, Rho Ventures, CMEA Ventures

Alien Technology manufactures Radio Frequency Identification Device (RFID) tags using Fluidic Self-Assembly (FSA), a process which enables Alien to cut production costs to less than five cents per tag, compared to the current industry average of at least 25 cents. Proponents of RFID technology say it will help companies across all industries reduce costs and streamline inventory processes, while others say it?ЗЦs just a more expensive barcode. Wal-Mart?ЗЦs RFID mandate for suppliers should help usher in widespread use, but Alien could be held back by the resistance seen in many industries, which could mean a slow transition to the new technology.

ApNano Materials

Address: 22 W. 38th St., New York, NY10018

Phone: 1-212-302-2070

URL: www.apnano.com

Founded: 2002

CEO: Menachem Genut

Employees: 12

Funding: $3 million, 1 round

Key Investors: Newton Technology VC Fund

ApNano Materials, with R&D labs just outside Rehovot, Israel, eventually plans to use its proprietary nanospheres to build everything from bulletproof vests to flat-panel displays. But for now, it is concentrating on just one product in one sector ?Зф an extreme-pressure, anti-wear lubricant called NanoLub that will be released next year. Because it demonstrated highly efficient performance in lab tests, the company already has a backlog of potential customers so large that they?ЗЦre shopping for a major chemical company partner to produce NanoLub. ApNano probably will need that kind of backing, since its lubricants are headed straight into direct competition with offerings from chemical giants like Shell, ExxonMobil, and ChevronTexaco.

Applied MicroStructures

Address: 4425 Fortran Dr., San Jose, CA95134

Phone: 1-408-594-0414

URL: www.appliedmst.com

Founded: 2003

CEO: Jeffrey Chinn

Employees: 10

Funding: $2.7 million, 1 round

Key Investors: Horizon Ventures, Compass Technology Partners, Bentek Manufacturing, LAM Research, Metron Technology

Applied Microstructures conceived, developed, sold, and shipped its first product in just one year ?Зф quite an accomplishment for a company working with devices at the sub-100 nanometer level. Applied MST developed molecular vapor deposition (MVD), a new technique to add coatings to nanoscale devices. Because the vapor-based (dry) process eliminates the need for wet chemistry, MVD reduces chemical usage and speeds up the coating process, helping micro-electromechanical systems (MEMs) manufacturers and other nano-related companies cut costs. This year, the company racked up over $1 million in sales to research universities and electronics and biotech companies, but to reach its goal of profitability in 2005, Applied MST must persuade some major customers of the viability of MVD over existing liquid-processing coating techniques.

ArrayComm

Address: 2480 N. First St.Suite 200, San Jose, CA95131

Phone: 1-408-428-9080

URL: www.arraycomm.com

Founded: 1992

CEO: Sam Endy

Employees: 70

Funding: $140+ million

Key Investors: Marconi Corporation, Sony, American Century Ventures, Cornerstone Equity, Nomura

International

The inventor of the cell phone is at it again. Only this time, ArrayComm founder Martin Cooper is bringing wireless to the masses with smart antenna technology. ArrayComm launched the first nationwide mobile wireless broadband network in Australia and is poised to do the same in South Africa. It focuses on special dimensions of radio signals, which have improved the ability to re-use channels multiple times for each cell, increasing capacity, coverage range, and quality ?Зф all while reducing price. ArrayComm expects its technology to serve more than a quarter of the 4 billion wireless subscribers forecast for 2015, but only if it can snag partnerships with key wireless players.

Arryx

Address: 316 North Michigan Ave. Suite CL20, Chicago, IL60601

Phone: 1-312-726-6675

URL: www.arryx.com

Founded: 2000

CEO: Lewis Gruber

Employees: 16

Funding: $5.5 million, 4 rounds

Key Investors: Draper Fisher Jurvetson, LCMH Technology Investments, MDGB Partners, Nanostart

Arryx?ЗЦs holographic laser-steering technology enables the manipulation of carbon nanotubes, the building blocks of nanotechnology devices. Using light to move nanomaterials gives greater control to the user and opens the gateway to the mass production of nanoscopic goods. Arryx has developed this cutting-edge technology for applications across industries like IT, agriculture, pharmaceuticals, and biotechnology, selling its BioRyx200 system to research institutions, universities, and corporate partners. In the nanotechnology field, where product creation is seen as still far in the future, Arryx has made important steps. But in a constantly moving industry, Arryx will have to continue to innovate to stay ahead.

Atrica

Address: 3255-3 Scott Blvd., Santa Clara, CA95054

Phone: 1-408-562-9400

URL: www.atrica.com

Founded: 2000

CEO: Vivek Ragavan

Employees: 150

Funding: $134 million, 4 rounds

Key Investors: 3Com, Benchmark Capital, Accel Partners, France Telecom, SBC Communications, Telia, BellSouth

Atrica has enabled telecoms to cut their capital and operating costs with its innovative optical ethernet system. Global businesses like France Telecom, Deutsche Telekom, and KVH Telecom have adopted the ethernet solution to lower costs but also to add features over broadband such as video, telephony, and data services. This year Atrica?ЗЦs system has also allowed carriers to extend the same network for both enterprise and residential, further lowering costs. Infonetics predicts that the carrier ethernet market is expected to exceed $5 billion by 2008; this is a boon to companies riding the wave, but a heated market will also mean future casualties in a telecom ethernet grab.

AuctionDrop

Address: 125-A Shoreway Rd., San Carlos, CA94070

Phone: 1-650-654-4365

URL: www.auctiondrop.com

Founded: 2002

CEO: Randy Adams

Employees: 100

Funding: $17.2 million, 1 round

Key Investors: Mobius Venture Capital, Draper Associates

AuctionDrop simplifies the Internet auction process by providing drop-off points for anyone who wants to sell their items on eBay. The company claims its 105,000-sq-ft center makes the process pain free. AuctionDrop?ЗЦs employees photograph the item, research it, price it, and post the listing on eBay ?Зф and of course, the company takes a percentage of the sale. In June 2004 the company partnered with UPS and added another 3,600 locations to its network, and it boasts selling more than 30,000 items. But AuctionDrop has its limitations: it only accepts items lighter than 25 pounds, and with an estimated sales value of more than $75.

Audible

Address: 65 Willowbrook Blvd., Wayne, NJ07470

Phone: 1-973-837-2700

URL: www.audible.com

NASDAQ: ADBL

Founded: 1995

CEO: Donald Katz

Employees: 93

2003 Revenues: $19.3 million

2003 Profits: ($10.7 million)

A man can only listen to so much Alanis Morissette. When you?ЗЦre tired of the whiny singer, you can turn on David Sedaris, thanks to Audible, which publishes digital recordings of popular books. That?ЗЦs made the company?ЗЦs products an ideal complement to Apple?ЗЦs iPod, the blockbuster that took digital music players mainstream. The company has seen sales jump from $1.7 million in 1999 to $19.3 million last year. What makes Audible innovative is how deftly it?ЗЦs kept up with the fractured music player scene. Its AudibleReady technology is built into devices from Apple, Palm, Sony, and HP. What?ЗЦs the rub? Audible is still losing money.

BioForce Nanosciences

Address: 2901 S. Loop Dr. Suite 3400, Ames, IA50010

Phone: 1-515-296-6550

URL: www.bioforcenano.com

Founded: 1994

CEO: Laurence J. Russ

Employees: 16

Funding: $9.5 million, 2 rounds

Key Investors: Groupe Societe Generale, Gulfstream Capital Management, Tekinvest

BioForce Nanosciences has built its business around a product that can print proteins and other biomolecules onto microchips, just as a desktop printer prints ink onto paper. The essential difference is that its NanoArray System, which will hit the market in 2005, is capable of printing spots as small as 250 nm. The company plans to produce silicon chips studded with antibodies as rapid diagnostic tools to catch viral infections, one of the key factors responsible for heart transplant failures. Although Bioforce has struggled to convince some nanotech-skeptical VCs to back it, there may be merit in its bottom-up business plan.

Broadcom

Address: 16215 Alton Pkwy., Irvine, CA92618

Phone: 1-949-450-8700

URL: www.broadcom.com

NASDAQ: BRCM

Founded: 1991

CEO: Alan E.O. ?ЗЈLanny?ЗҐ Ross

Employees: 3,300

2003 Revenues: $1.61 billion

2003 Profits: ($959.9 million)

Following the ?ЗЈconnecting everything?ЗҐ mantra, Broadcom has gone into an expansion mode since 1999, including creating a wireless division and buying two dozen innovative companies. The effort has paid off: although the company still posted a large net loss in 2003, Broadcom leads the ethernet chip systems market. During the first nine months of 2004, its wireless division revenue grew 72 percent compared to the same period last year. In 2005, Broadcom?ЗЦs key products will include chips for wi-fi and Bluetooth phones and for adding security features to networking and storage systems. So far in 2004, Broadcom is turning a profit, but must successfully integrate its acquisitions and compete with several heavy-hitting competitors.

Caliper Life Sciences

Address: 68 Elm St., Hopkinton, MA01748

Phone: 1-508-435-9500

URL: www.caliperls.com

NASDAQ: CALP

Founded: 1995

CEO: Daniel Kisner, M.D.

Employees: 454

2003 Revenues: $49.4 million

2003 Profits: ($49.5 million)

Caliper Life Sciences makes products which cut down expensive lab time, allowing pharmaceuticals and biotechs to speed up their innovation cycles. The company has integrated microfluidic technology into products such as chips for the rapid screening of large numbers of candidate drugs to see if they bind with target molecules. Caliper, which acquired Zymark last year, has brought products to market both on their own and in partnership with other companies. A recent focus has been on developing strategic partnerships with companies such as Affymetric and Bio-Rad.

Caspian Networks

Address: 170 Baytech Dr., San Jose, CA95134

Phone: 1-408-382-5200

URL: www.caspian.com

Founded: 1999

CEO: Bradford Wurtz

Employees: 130

Funding: $263 million, 4 rounds

Key Investors: Vulcan Ventures, U.S. Venture Partners, Morganthaler Ventures, Oak Investment Partners, New Enterprise Associates, Alloy Ventures

Caspian Networks built the first Internet routers with awareness of ?ЗЈflows,?ЗҐ or entire streams of related packets, instead of the simple packet awareness of traditional routers. By maintaining information on every flow that transits the routers, Caspian?ЗЦs equipment applies quality of service for every flow and applies congestion control when the network begins to overload, so ISPs can guarantee that no packets of data are lost or delayed. For end-users, this means military-grade voice-over-IP (VoIP) and flawless streaming video with no delays or interference. To achieve success, Caspian will need to convince service providers that its products are a viable alternative to existing standards.

Chiral Photonics

Address: 115 Industrial St. East, Clifton, NJ07012

Phone: 1-973-594-8888

URL: www.ChiralPhotonics.com

Founded: 1999

CEO: Dan Neugroschl

Employees: 10

Funding: $3.1 million (investors), 3 rounds, $2.1 million (research grants)

Key Investors: Telemark Group and angel investors

Chiral Photonics is developing a new class of high-performance filters, sensors, and lasers by twisting ?ЗЈchiral,?ЗҐ or helical, structures into optical fibers. The technology is incorporated entirely within the optical fibers, enabling them to ?ЗЈplug-and-play?ЗҐ for a range of fiber-optic infrastructures, including telecommunications, industrial sensing, medical diagnostics, and medical invasive procedures. Since they are easily integrated into existing infrastructures, the chiral fibers add value both in terms of cost and performance. Once it has overcome all technical hurdles, Chiral Photonics will still need to effectively market its product to unseat accepted entrenched technologies.

comScore Networks

Address: 11465 Sunset Hills Rd. Suite 200, Reston, VA20190

Phone: 1-703-438-2000

URL: www.comscore.com

Founded: 1999

CEO: Magid Abraham

Employees: 220

Funding: $88 million, 5 rounds

comScore Networks is known for its in-depth reports and surveys about consumer behavior on the Internet. Using a panel of 2 million consumers across seven continents and patented data capture technology, comScore monitors everything from what people are buying online to the habits of Latino web surfers. Although comScore has an established presence in web metrics, the company will have to stay nimble as technology advances, if it is to maintain its lead over competitors.

Credant Technologies

Address: 15303 Dallas Pkwy.Suite 1420, Addison, TX75001

Phone: 1-972-458-5400

URL: www.credant.com

Founded: 2001

CEO: Bob Heard

Employees: 65

Funding: $38 million, 3 rounds

Key Investors: Austin Ventures, Menlo Ventures, Crescendo Ventures, Intel Capital, Cisco Systems 

Credant Technologies enables enterprises to detect and secure mobile devices like laptops, PDAs, and cell phones, which often contain unprotected corporate data. Its technology also allows clients to manage data security on mobile devices using existing enterprise directory systems, and to define security policies based on assigned roles within groups. To succeed, Credant must align itself with the right partners and keep a close eye on what device manufacturers are doing in the data security space. The company also needs to focus on interoperability issues to ensure its solutions work with all applications and devices.

Crescendo Networks

Address: 28 Hacharoshet St., Or-Yehuda, 60375 Israel

Phone: 972/3-634-6120

URL: www.crescendonetworks.com

Founded: 2002

CEO: Shykeh Gordon

Employees: 40

Funding: $15 million

Key Investors: StageOne Venture, Magnum Communications Fund, Convergent Capital, Apax Partners

Crescendo Networks?ЗЦ Maestro appliance aims to keep servers in corporate data centers in harmony. It?ЗЦs basically a box that sits in front of a group of servers and handles the grunt work ?Зф basic security and networking tasks ?Зф and in turn allows the servers to handle more work. It also helps balance the workload among servers, keeping one from getting overloaded, bouncing data quickly among servers. That?ЗЦs helped customers boost the number of users a typical server can handle. But the company faces stiff competition from networking peers.

Crossbow Technology

Address: 41 Daggett Dr., San Jose, CA95134

Phone: 1-408-965-3300

URL: www.xbow.com

Founded: 1995

CEO: Mike Horton

Employees: 80

Funding: $13 million, 3 rounds

Key Investors: Intel Capital, Morgenthaler Ventures, Cambria Group

With two consecutive years of profitability and more than $15 million in revenue in 2004, Crossbow Technology is in a strong financial position. Over 1,300 customers, including partner/investor Intel, have installed Crossbow?ЗЦs Smart Dust Motes, which are tiny wireless devices that monitor information such as air quality and barometric pressure. Crossbow?ЗЦs open-source software allows the Motes to communicate in a network and send data to external applications that keep tabs on industrial machines, oil tanker engines, or warehouses. Because competitors like Dust Networks, Ember, and Millennial Net have painted a target on Crossbow?ЗЦs back, the company must continually update its technology to stay ahead.

Dassault Systemes

Address: 9 Quai Marcel Dassault, B.P. 310 Suresnes Cedex, 92156 France

Phone: 33/1-4099-4099

URL: www.3ds.com

EURONEXT: DSY

NASDAQ: DASTY

Founded: 1981

CEO: Bernard Charles

Employees: 4,088

2003 Revenues: $948 million

2003 Profits: $808 million

Dassault Systemes?ЗЦ design, collaboration, and manufacturing planning software help clients tighten up processes and development and save money while increasing the innovative abilities of designers. Although none of the company?ЗЦs competitors in the PLM space have a similarly integrated offering, the company?ЗЦs challenge is a target market that traditionally focuses on short-term fixes to problems. In order to succeed, Dassault will have to convince potential customers that its product is necessary for their companies to mature.

DNA Genotek

Address: 29 Camelot Dr., Suite 200Ottawa, Ontario, CanadaK2G 5W6

Phone: 1-613-723-5757

URL: www.dnagenotek.com

Founded: 1998

CEO: Ian Curry

Employees: 12

Funding: $1.8 million, 2 rounds

Key Investors: Angel investors

DNA Genotek is riding the recent wave of interest in how DNA controls the body and contributes to health problems. The company is creating what all DNA researchers need ?Зф easy and cost-effective collection, transport, storage, and processing of human DNA for genetic research and testing. The company?ЗЦs main product is Oragene, a plastic vial and chemical solution for safely delivering saliva samples. Genotek sells to top-tier health research institutes worldwide, serving an industry that generates hundreds of millions of dollars. However, DNA Genotek needs to scale production capabilities and keep costs lower to meet the growing market demand.

DropZone Networks

Address: 275 Middlefield Rd., Menlo Park, CA94025

Phone: 1-631-223-4144

URL: www.dropzonenetworks.com

Founded: 2004

CEO: David Waxman

Employees: 5

Funding: Less than $1 million

Key Investors: Equip Ventures

DropZone Networks has developed a next-generation wi-fi and WiMax wireless services platform for outdoor broadband networks. By combining a multi-protocol wireless router with a robust application server and content cache, the company developed one device that enables customers to run services at the edge of their network and closer to users. It also runs on solar power, enabling service providers to deploy outdoor broadband networks in areas where electricity is hard to come by. But DropZone is still in its early stages, and will have to keep a close look on future market developments to stay ahead of competitors.

Dust Networks

Address: 2560 Ninth St., Suite 220Berkeley, CA94710

Phone: 1-866-289-3878

URL: www.dustnetworks.com

Founded: 2002

CEO: Joy Weiss

Employees: 42

Funding: $7 million, 1 round

Key Investors: Foundation Capital, Institutional Venture Partners, In-Q-Tel

A few years ago, Dust Networks co-founder Kris Pister garnered a lot of free publicity when he touted the so-called smart dust he developed in his electrical engineering lab at UC Berkeley. The company he founded in 2002 will need some of that buzz to market the iPod-sized sensors it?ЗЦs selling as nodes in mesh networks. The AA-battery-powered wireless devices replace wired sensors, which are expensive to install and maintain. Dust Networks sensors are now being used to monitor energy loss in supermarkets and traffic across the U.S. border with Mexico. Competitors include Millennial Net and Ember, which has a year?ЗЦs head start on Dust.

eASIC

Address: 2242 Camden Ave. Suite 203, San Jose, CA95124

Phone: 1-408-879-9400

URL: www.easic.com

Founded: 1999

CEO: Zvi Or-Bach

Employees: 70+

Funding: $7 million, 3 rounds

Key Investors: Kleiner Perkins Caufield & Byers

eASIC?ЗЦs chips are like pre-fab houses: they give you the parts you need to design your dream home, without the cost and hassles of designing from scratch. While some kinds of chips allow engineers to program new functionality into generic chips in the field, they?ЗЦre not as fast or as power efficient as eASIC?ЗЦs custom-built chips, known as ASICs. But ASICs can cost upwards of $10 million to design. eASIC offers a compromise ?Зф a basic design that can easily be reconfigured by engineers before the chip is built, therefore offering many of the advantages of traditional ASICs, without the cost.

Ember

Address: 343 Congress St. 5th Floor, Boston, MA02210

Phone: 1-617-951-0200

URL: www.ember.com

Founded: 2001

CEO: Jeff Grammer

Employees: 61

Funding: $53 million, 3 rounds

Key Investors: Polaris Venture Partners, GrandBanks Capital, DFJ New England, RRE Ventures, DFJ ePlanet, Stata Venture Partners, Robert Metcalfe, Vulcan Capital, WestAM, CTTV Investments, Hitachi

Ember?ЗЦs systems ?Зф which consist of chips embedded within the company?ЗЦs patented networking software and radio transmitter technology ?Зф enable wireless semiconductor systems to communicate. Unlike its competitors, Ember claims to have a full-system solution that includes radio frequency chips, networking software, and development tools that are ZigBee-ready (an upcoming wireless networking standard). The wireless semiconductor solutions market is expected to grow about 47 percent from 2003 to 2007, giving Ember plenty of play in the near future.

Exiqon

Address: Bygstubben 9 DK-2950 Vedbaek, Denmark

Phone: 45/45-66-08-88

URL: www.exiqon.com

Founded: 1996

CEO: Lars Kongsbak

Employees: 24

Funding: $25 million, 4 rounds

Key Investors: BioFund, Aktieselskab, The Nobel Family, Optiomi, Scandinavian Life Science, Teknoinvest

Thanks to Exiqon?ЗЦs ProbeLibrary Kit and its bioinformatics software, the time it takes for scientists to analyze gene activity can be cut from three weeks to a single day. Gene expression analysis will boost the drug discovery process and push the innovation of genetic therapies for such diseases as cancer and diabetes. Exiqon expects revenues this year of $2.5 million, thanks in part to licensing agreements with big biotech companies like US Genomics, Proligo, and Genisphere. But to really grab market share, the company will have to turn to a larger company for help with distribution.

Firetide

Address: 16795 Lark Ave., Suite 200, Los Gatos, CA95032

Phone: 1-408-399-7771

URL: www.firetide.com

Founded: 2002

CEO: Bo Larsson

Employees: 41

Funding: $18.8 million, 2 rounds

Key Investors: Menlo Ventures, HMS Ventures, Hawaiian Electric Industries, Mitsui & Co. Venture Partners

Born from the fast-growing demand for wireless hot spots, Firetide?ЗЦs products allow for both indoor and outdoor wireless networks without the need for cable installation. Current Firetide customers include tech-savvy cities such as Culver City near Los Angeles and Los Gatos in Silicon Valley, both of which use Firetide?ЗЦs technology to attract visitors. Other customers include hotels, airports, and even an RV park in Palm Springs. Nevertheless, Firetide is playing in a highly competitive market, with rivals such as Tropos Networks and Strix Systems nipping at its heels.

GenVault

Address: 2101 Faraday Ave., Carlsbad, CA92008

Phone: 1-760-268-5200

URL: www.genvault.com

Founded: 2001

CEO: Mitch Eggers

Employees: 30

Funding: $18 million, 1 round

Key Investors: Domain Associates

GenVault developed the first fully automated, room-temperature storage method for DNA samples ?Зф a sort of safety deposit box for DNA that eliminates the need for costly and labor-intensive cryogenic freezers, which is especially important for organizations with large DNA collections. Its Dynamic Archive in Carlsbad can store up to 400,000 samples for its customers, who can search their samples via the web and receive them through regular mail, no special packaging required. With the Centers for Disease Control and Prevention and the National Institutes of Health?ЗЦs National Institute on Aging as customers, the company is well on its way to overcoming its main obstacle: convincing researchers that it?ЗЦs trustworthy enough to handle their precious DNA collections.

Google

Address: 1600 Amphitheatre Pkwy., Mountain View, CA94043

Phone: 1-650-623-4000

URL: www.google.com

NASDAQ: GOOG

Founded: 1998

CEO: Eric Schmidt

Employees: 2,500+

2003 Revenues: $1.5 billion

2003 Profits: $105.6 million

Not only does Google have one of the strongest brands on the Internet, it has also unveiled a string of hit products in 2004. One of its most successful innovations, Gmail, made headlines for offering a whopping 1 GB of storage space. In October, the company released its desktop search tool far ahead of the competition. But Google still has its share of worries: now that it?ЗЦs a public company, it will have to add Wall Street analysts to the list of people it has to please. And going up against Microsoft doesn?ЗЦt sound like fun, either.

Headwall Photonics

Address: 601 River St., Fitchburg, MA01420

Phone: 1-978-353-4100

URL: www.headwallphotonics.com

Founded: 2003

CEO: Larry Barstow

Employees: 28

Funding: $8 million, 1 round

Key Investors: Agilent Technologies, Applied Spectral Partners

Headwall Photonics?ЗЦ core technology consists of holographic diffraction gratings that are used to precisely aim, measure, and manipulate beams of light. Headwall?ЗЦs gratings have a broad range of applications, from the life sciences market to telecommunications. The combined market for tests and measurement, telecommunications, and remote sensing equipment exceeds $20 billion, and Headwall products address about 10 percent of it. But the company faces hurdles from big competitors such as Newport and Hitachi, which have a dominating international presence. The company also faces resistance from the U.S. government to export.

Hewlett-Packard

Address: 3000 Hanover St., Palo Alto, CA94304

Phone: 1-650-857-1501

URL: www.hp.com

NYSE: HPQ

Founded: 1939

CEO: Carly Fiorina

Employees: 145,000

2003 Revenues: $73 billion

2003 Profits: $2.5 billion

The reinvigorated Hewlett-Packard keeps cranking out the hits. In the past year, the company introduced the Photosmart R70, a digital camera with red-eye-removal technology that corrects a shot while photos are still in the camera, without extra flashes or software touch-ups. The HP Digital Entertainment Center z500 series allows consumers to access their music, movies, home videos, and photos from a single device via a remote control. And HP?ЗЦs inkjet printing goes beyond the printing market to include breaking developments in television and computer displays, printed electronic circuits, automotive fuel-injection systems, and even drug delivery for treatment of diseases like diabetes.

IBM

Address: 1 New Orchard Rd., Armonk, NY 10504

Phone: 1-914-499-1900

URL: www.ibm.com

NYSE: IBM

Founded: 1911

CEO: Samuel Palmisano

Employees: 320,000

2003 Revenues: $89.13 billion

2003 Profits: $7.6 billion

In its 93-year history, IBM has survived major economic shifts and evolved with the adoption of IT to become the largest IT company in the world. Its focus on the intersection of business and innovation, including generating more U.S. patents over the past decade than any other company, has helped it stay on course as other tech companies failed in the face of changing market and customer demands. IBM?ЗЦs broad portfolio of systems, software, and storage solutions has helped Big Blue shift from its past hardware focus to a services-oriented company. It has also become an ardent advocate of open standards.

i-flex solutions

Address: 399 Subhash Rd., Vile Parle (E) Mumbai, India 400 057

Phone: 91/22-2839-1909

URL: www.iflexsolutions.com

Bombay Stock Exchange and National Stock Exchange of India: IFLX

Founded: 1992

Chairman: Rajesh Hukku

Employees: 4,000

2003 Revenues: $185 million

2003 Profits: $41 million

i-flex solutions?ЗЦ Flexcube enables banking and financial institutions in 90 countries to create and deploy financial applications over the web and other customer contact points such as ATMs, PDAs, and telephones. The product?ЗЦs scalable, modular, and comprehensive nature allows banks to launch new products and respond to dynamic market changes without changing source code. i-flex solutions?ЗЦ target market is huge, but the company will have to watch out for language and cultural barriers and increased competitive activity as it enters foreign markets.

Impinj

Address: 501 N. 34th St., Seattle, WA98103

Phone: 1-206-517-5300

URL: www.impinj.com

Founded: 2000

CEO: William Colleran

Employees: 70

Funding: $52 million, 3 rounds

Key Investors: ARCH Venture Partners, Mobius Venture Capital, Polaris Venture Partners, Unilever Technology Ventures, UPS Strategic Enterprise Fund

Impinj produces chips for radio frequency identification (RFID), which is a more advanced version of the barcode. Impinj specializes in making chips that lead to cheaper RFID tags that require less power, giving them a longer range than competitors. Impinj co-founder Carver Mead has more than 50 patents to his credit, and started 21 companies before founding Impinj. Analysts agree that RFID is the way of the future, but fierce competition from the likes of Texas Instruments and Philips Semiconductors could leave Impinj out in the cold.

Kinexus Bioinformatics

Address: 6190 Agronomy Rd. Suite 402, Vancouver, British ColumbiaV6T 1Z3

Phone: 1-604-822 9963

URL: www.kinexus.ca

Founded: 1999

President: Dr. Steven Pelech

Employees: 18

Funding: $3.6 million, 1 round

Key Investors: Milestone Medical, BIRC Capital, FutureFund Capital

Kinexus Bioinformatics is analyzing and building an online database of cell-signaling proteins, or ?ЗЈkineomes,?ЗҐ which are enzymes that hold the potential for curing diseases such as cancer and diabetes. Kinexus sells its information to other life sciences research companies, who use the data for their own studies. But Kinexus isn?ЗЦt alone in trying to sell cutting-edge data to big pharma. Becton Dickinson has a head start on research, and also wants a piece of the $4-billion informatics market.

Language Weaver

Address: 4640 Admiralty Way Suite 1210, Marina del Rey, CA 90292

Phone: 1-310-437-7300

URL: www.languageweaver.com

Founded: 2002

CEO: C. Bryce Benjamin

Employees: 25

Funding: N/A

Key Investors: In-Q-Tel, Palisades Ventures, Athenaeum Fund, TechCoast Angels, Sulphur Creek Ventures

Language Weaver says it is the first to commercialize Statistical Machine Translation Software (SMTS) technology, or automated translation of human languages. By learning automatically from existing translated documents, this technology reviews previously unseen text and translates it from language to language using statistical algorithms, completely eliminating the human element. Unlike translation memory systems, the SMTS technology works well with documents it has never encountered and makes translation more accurate. The biggest challenge for Language Weaver will be to overcome the bad reputation caused by past machine translation systems, which relied on traditional, rules-based technology.

Linden Lab

Address: 577 Second St.Suite 200, San Francisco, CA94107

Phone: 1-415-243-9000

URL: www.lindenlab.com

Founded: 1999

CEO: Philip Rosedale

Employees: 31

Funding: $10+ million, 4 rounds

Key Investors: Benchmark Capital, Kapor Enterprises, Catamount Ventures

Linden Lab?ЗЦs Second Life is an online 3D world for the creative set. The developers determine the program and the landscape, but the players use in-game tools to construct the game?ЗЦs workings and their own identities. Gamers can build structures, develop complicated animations, or wreak havoc. There is a onetime $9.95 membership fee plus additional charges for online land space. Linden says it?ЗЦs seen a 20 percent per month growth in subscriptions and expects 1 million users in three years. Skeptics have questioned the business model, but with an $8-million round of recent funding, Linden Labs should have plenty of funds to work out the kinks.

Lumeta

Address: 220 Davidson Ave., Somerset, NJ08873

Phone: 1-732-357-3500

URL: www.lumeta.com

Founded: 2000

CEO: Tom B. Dent

Employees: 40+

Funding: $16.5 million, 2 rounds

Key Investors: Draper Fisher Jurvetson, New Venture Partners, RBC Technology Ventures, Wachovia Strategic Ventures

Borne out of The Internet Mapping Project of the late 1990s, Lumeta attributes its success ?Зф the company claims 118 percent revenue growth in the first half of 2004 over last year ?Зф to IPsonar, its core technology that aims at securing networks. With a patent pending, IPsonar alerts IT managers to weaknesses in the network and collects data with the purpose of preventing break-ins. Customers include NASA, the FAA, the U.S. Department of Defense, AT&T Wireless, and McGraw-Hill. Since a large part of sales depends on proving a strong return on investment, Lumeta says its next challenge is putting a numeric value on network security.

Magink Display Technologies

Address: 304 Park Ave. South 11th Floor, New York, NY10010

Phone: 1-212-590-2381

URL: www.magink.com

Founded: 2000

CEO: Ran Poliakine

Employees: N/A

Funding: $27 million

Key Investors: N/A

With a ?ЗЈdigital ink?ЗҐ that is the first of its kind to offer a full spectrum of colors, Magink Display Technologies has the potential to tap into a wide range of key markets, from laptop screens to giant stadium displays. With its paste-like material that can be spread over glass to form a display, Magink already plans to tap into the $5-billion U.S. billboard market. While a billboard using Magink?ЗЦs product will cost $50,000 ?Зф five times the amount of a conventional display ?Зф the company is betting that the flexibility its product can offer will provide significant incentive for buy-in.

MailFrontier

Address: 1801 Page Mill Rd., Palo Alto, CA94304

Phone: 1-650-461-7500

URL: www.mailfrontier.com

Founded: 2002

CEO: Ann Bonaparte

Employees: 70

Funding: $23 million, 3 rounds

Key Investors: Draper Fisher Jurveston, New Enterprise Associates, Menlow Ventures

MailFrontier is known for its anti-spam, anti-phishing, and anti-fraud technology that helps protect customers from constantly changing and newly emerging email threats. In October, 1,142 phishing sites were reported, and only about 5 percent of all attacks are made public. Companies will spend $668 million in 2008 to protect against anti-phishing resources, and a fair chunk of that could be going MailFrontier?ЗЦs way. But the growing number of Internet threats will attract an increasing number of companies hoping to profit from them, and MailFrontier will have to keep on its toes to stay at the front of the pack.

Mazu Networks

Address: 125 Cambridge Park Dr. 4th Floor, Cambridge, MA02140

Phone: 1-617-354-9292

URL: www.mazunetworks.com

Founded: 2000

CEO: Donald Casey

Employees: 40

Funding: $23 million, 2 rounds

Key Investors: Greylock, Matrix Partners, Pilot House Ventures Group, Benchmark Capital, StarVest Partners

Mazu Networks?ЗЦ flagship product, the Mazu Profiler, was the first network-wide intrusion-protection system when it was launched in 2002. The Profiler protects companies?ЗЦ internal networks against worms and insider threats, and serves the financial services, media and entertainment, manufacturing, and technology industries. Unlike other signature-based detection systems, which tend to fail due to the growing number of employees with remote access to networks, Mazu?ЗЦs product leverages the existing infrastructure of routers, switches, and probes to both detect and mitigate attacks. Mazu?ЗЦs challenge will be to meet the rapid growth of the multibillion-dollar market for enterprise-wide intrusion-prevention systems.

MCA Solutions

Address: 2 PennCenterPlaza Suite 700, Philadelphia, PA19102

Phone: 1-215-717-2180

URL: www.mcasolutions.com

Founded: 1999

CEO: Robert Salvucci

Employees: 42

Funding: $10.2 million, 2 rounds

Key Investors: Longworth Venture Partners, Battery Ventures

Using optimization technologies from the military world, MCA Solutions has developed a product that manages service supply chain planning for customers, including Cisco and Boeing. MCA?ЗЦs software plans and positions spare parts inventory in the supply chain and manages their use across a global network of distribution. The company claims its technology enables manufacturers to reduce inventory by 15 to 40 percent, resulting in higher levels of customer service and a rapid return on investment. MCA says its software is faster, but even so, it will have to differentiate itself in a crowded field of similar claims.

mental images

Address: Fasanenstrasse 81 D 10623 Berlin, Germany

Phone: 49/30-315-99-70

URL: www.mentalimages.com

Founded: 1986

CEO: Rolf Herken

Employees: 52

Funding: $6 million, 1 round

Key Investors: Rolf Herken, Guenter Ansorge, ViewPoint Ventures

mental images provides high-end image rendering and advanced 3D-modeling technology for computer-aided design (CAD), digital content creation, and anyone else who needs sophisticated images. Its RealityServer enables interactive creation, manipulation, and visualization of existing and newly created 3D content over the Internet. RealityServer-based applications permit thousands

of users to simultaneously interact with complex and original 3D content from any Internet-connected computing device. Well-known customers include DreamWorks Animation SKG, Industrial Light and Magic, and Electronic Arts. However, mental images faces stiff competition from Pixar?ЗЦs RenderMan.

Meru Networks

Address: 1309 S. Mary Ave., Sunnyvale, CA94087-3029

Phone: 1-408-215-5300

URL: www.merunetworks.com

Founded: 2002

CEO: Ujjal Kohli

Employees: 80

Funding: $30 million, 2 rounds

Key Investors: NeoCarta Ventures, Evercore Venture, BrainHeart Capital, JumpStartup Venture Fund, Monitor Ventures, Dot Ed Ventures, Bluestream Ventures, Sierra Ventures.

Meru Networks uses its patent-pending Air Traffic Control technology to create its enterprise wireless local area network (WLAN) infrastructure, which is essential to pervasive wireless deployments in enterprises supporting wireless voice-over-IP (VoIP) calls. The company?ЗЦs centralized WLAN architecture can coordinate as many as 200 access points for an enterprise, and enables VoIP on standard wi-fi networks with better voice quality than cell phones. As the VoIP market explodes over the next few years, demand for technology like Meru?ЗЦs will increase, but the small player will have to navigate a field full of heavy competition before it gets a decent share of the market.

MetaCarta

Address: 875 Massachusetts Ave. Floor 6, Cambridge, MA02139

Phone: 1-617-661-6382

URL: www.metacarta.com

Founded: 1999

CEO: Ron Matros

Employees: N/A

Funding: $6.5 million, 2 rounds

Key Investors: In-Q-Tel, ChevronTexaco Technology Ventures, Sevin Rosen Funds, Chisholm Private Capital Partners

MetaCarta?ЗЦs software pinpoints and indexes files from the Internet or private networks by using place names, landmarks, or simple descriptions of a geographic area. Originally funded by the U.S. military and the CIA, MetaCarta?ЗЦs Geographic Text Search systems could play a key role in the tense world of geopolitics and industries that rely on precise, location-specific document search. Its technology has also been embraced by state and local governments for public security and law-enforcement purposes, and by energy companies exploring natural resources and managing infrastructures. MetaCarta has a strong presence in these sectors, but should focus on expanding its customer base to other industries.

Millennium Pharmaceuticals

Address: 40 Landsdowne St., Cambridge, MA02139

Phone: 1-617-679-7000

URL: www.mlnm.com

NASDAQ: MLNM

Founded: 1993

CEO: Mark J. Levin

Employees: 1,700

2003 Revenues: $433.7 million

2003 Profits: ($483.7 million)

With all the blockbuster drugs sweeping the pharmaceutical industry, Millennium Pharmaceuticals has been pushing the personal route. Personalized medicine uses molecular analysis to create patient-specific drugs and genetic screening to determine who should receive them. Millennium?ЗЦs cancer drug Velcade was approved by the FDA in 2003, and its heart disease drug, Integrilin, co-developed and marketed with Schering-Plough, generated $305 million in revenues last year. Millennium reports more than 10 drugs in its pipeline, but with only two drugs on the market, it has yet to post a full-year profit. As with all pharma companies, success will depend on its ability to develop new drugs and push them through the FDA.

Mobileye

Address: Brantwijk 41, 1181 MS Amstelveen, The Netherlands

Phone: 31/625-401370

URL: www.mobileye.com

Founded: 1999

CEO: Ziv Aviram

Employees: 90

Funding: $51 million, 4 rounds

Key Investors: First International Bank of Israel, The Colmobil Group, Delek Motors, Motorola Ventures, Lev Leviev, Leon Rekanati.

They said it couldn?ЗЦt be done, but Professor Amnon Shashua of the Hebrew University of Jerusalem developed it: a monocular vision system for cars. Mr. Shashua?ЗЦs technology became Mobileye, a company that provides driver assistance through machine vision. This year, Mobileye introduced its EyeQ system-on-a-chip platform, which processes applications that detect other cars, lane lines,

and pedestrians to help motorists drive safely. Major European, American, and Japanese automakers have inked deals to put Mobileye?ЗЦs applications and hardware into their vehicles. To succeed in its goal of profitability next year, the company will have to fend off alternative radar- and laser-based technologies, as well as competing stereo-based vision systems.

Motia

Address: 1177 High Ridge Rd., Stamford, CT06905

Phone: 1-866-426-6842

URL: www.motia.com

Founded: 2000

CEO: Malcolm (Mal) Caraballo

Employees: 40+

Funding: $19.5 million, 3 rounds

Key Investors: Axiom Venture Partners, Carrot Capital, Intel Capital, Kodiak Venture Partners, Prism Venture Partners

Motia has successful smart antenna products on both the broadcast and receiving ends of wireless communications. Its Javelin semiconductor works into existing antenna chipsets, allowing multiple antennas to optimize their signal, which boosts range and data capacity. Cross Country, a mobile direct broadcasting system (DBS) reference design, lowers the cost for mobile antennas in vehicles, making cheap satellite multimedia available for cars or RVs. Motia is developing a wide array of smart antenna products, but a lack of focus on one market segment could leave it open to wi-fi chip competition from the likes of Airgo and Atheros Communications.

Motion Computing

Address: 9433 Bee Caves Road Building 1 Suite 250, Austin, TX78733

Phone: 1-512-637-1100

URL: www.motioncomputing.com

Founded: 2001

CEO: Scott Eckert

Employees: 120

Funding: $17.7 million, 2 rounds

Key Investors: New Enterprise Associates, Compal Electronics, G51 Capital

After seven years as a Dell executive, Scott Eckert took the lessons he gleaned and helped his tablet PC maker turn a profit in 2003. Motion Computing is the No. 3 slate tablet PC provider worldwide, according to IDC and Motion estimates for the second quarter of 2004. Motion?ЗЦs approach to technology, including intuitive pen-based capabilities, allows people to compute in new ways and places. Motion has already seen success in the health care, field sales and services, education, and government markets, and is expanding internationally. But it remains to be seen whether there?ЗЦs a market for tablet PCs, and Motion also will face heavy competition from the likes of Acer, HP, Fujitsu, Toshiba, and others.

MySQL

Address: Bangardsgatan 8 S-753 20 Uppsala, Sweden

Phone: 46/18-10-18-90

URL: www.mysql.com

Founded: 1995

CEO: Marten Mickos

Employees: 170

Funding: Approx. $20 million, 2 rounds

Key Investors: Benchmark Capital, Index Ventures

In a field of heavy-hitters, MySQL has scored with its fast and reliable MySQL, the world?ЗЦs most popular open-source database. With annual revenues of $5.8 million, MySQL is a small player compared to IBM, Oracle, and Microsoft, which earn billions in database revenue. But the $9-billion market offers ample opportunities for growth. Earning half its revenue from commercial software licenses and the rest from professional services and product support, MySQL stands apart with its unique business model and broad base of customers from a variety of sectors, including technology, telecom, government, and e-commerce.

N2 Broadband

Address: 4500 River Green Pkwy.Suite 110, Duluth, GA30096

Phone: 1-678-812-6300

URL: www.n2broadband.com

Founded: 2000

CEO: Reggie Bradford

Employees: 135

Funding: $27 million 3 rounds

Key Investors: Lightspeed Ventures, Carmel Ventures, Pitango Venture Capital

N2 Broadband?ЗЦs software allows cable system operators to offer services such as video-on-demand (VOD), and supplies a back-office applications platform to help cable operators manage their subscriber services. N2 relies on published interfaces to drive down the cost of VOD deployment and open the door for innovators formerly shut out of the proprietary cable market. The company offers network operators a centralized platform for enabling interactive television services like VOD, and generates revenues from the sale of software, upgrades, and licenses. N2 has positioned itself to take advantage of the growing VOD market, but the company will have to stave off other companies hoping to cash in on similar services in the near future.

Nanomix

Address: 5980 Horton St., Emeryville, CA94608

Phone: 1-510-428-5300

URL: www.nano.com

Founded: 2000

CEO: David Macdonald

Employees: 23

Funding: $18.5 million, 2 rounds

Key Investors: Alta Partners, Apax Partners, Sevin Rosen Funds, Enertech Capital

Nanomix?ЗЦs industrial gas sensor will be one of the first nano-scale devices on the market when it launches next year. The company focuses on applications for its nanoelectronic sensors, which integrate carbon nanotubes with silicon substrates. The hydrogen sensor, along with in-development medical breath-sensing and bio-molecule detection products, will compete in the $1-billion-plus chemical-sensor and $14-billion bio-sensor markets. Nanomix claims its products offer lower power consumption and higher sensitivity at prices competitive with traditional sensors. The company has enviable partners, including UC Berkeley and DuPont, but very little revenue, and CEO David Macdonald admits that as Nanomix works on driving growth, it?ЗЦs still years away from profitability.

Nanosys

Address: 2625 Hanover St., Palo Alto, CA94304

Phone: 1-650-331-2100

URL: www.nanosysinc.com

Founded: 2001

CEO: Calvin Chow

Employees: 50

Funding: $55 million (investors), 3 rounds, $20 million (government contracts)

Key Investors: Arch Ventures, CW Ventures, Polaris Ventures, Prospect Venture Partners, Venrock Associates

Nanosys and its unfocused business model took a beating from the digerati this summer, forcing a withdrawal of its IPO, but there?ЗЦs one thing naysayers couldn?ЗЦt take away: its technology. In nanotech, a field full of promise but a decade from maturity, it?ЗЦs tough to predict eventual winners and losers. The core of Nanosys?ЗЦ technology is fabricating nanostructures from inorganic materials like silicon, and applications include everything from cheap solar cells to flexible electronic displays. This year, Nanosys signed up three major partners ?Зф Intel, DuPont, and In-Q-Tel ?Зф but CEO Calvin Chow needs a concrete strategy and revenue stream if he wants to silence critics and go public.

Neah Power Systems

Address: 22122 20th Ave. SE Suite 161, Bothell, WA98021

Phone: 1-425-424-3324

URL: www.neahpower.com

Founded: 1999

CEO: David W. Dorheim

Employees: 35

Funding: $20 million, 3 rounds

Key Investors: Frazer Technology Ventures, Alta Partners, Intel Capital, Castille Ventures, WestArm

Because battery power can?ЗЦt keep up with power-hungry portable electronics devices, innovation in micro fuel cells is taking off, and Neah Power Systems is at the forefront of the young industry. Neah has overcome a big hurdle in the micro fuel cell technology with its silicon-based electrode, which is designed to expand the reaction area and last longer than traditional batteries and other fuel cells. But Neah has yet to reach the commercialization stage, and a slower than expected transition to new battery technology could hold the company back.

Nvidia

Address: 2701 San Tomas Expwy., Santa Clara, CA95050

Phone: 1-408-486-2000

URL: www.nvidia.com

NASDAQ: NVIDIA

Founded: 1993

CEO: Jen-Hsun Huang

Employees: 2,081

2003 Revenues: $1.9 billion

2003 Profits: $528 million

Nvidia?ЗЦs graphics-processing units, media and communications processors, and ultra-low-power media processors enable connectivity across networks and communications platforms. Having invested $1 billion in R&D in the last three years, Nvidia?ЗЦs latest offering is PureVideo, a new video-processing technology that provides home-theater-quality images on the PC. The programmable processor helps ?ЗЈfuture proof?ЗҐ the product to ensure that all video standards are supported. As the company operates in markets characterized by rapidly changing technology, its success will depend on market acceptance of existing products, the ability to introduce new inventions, and outfoxing larger competitors.

OpenPeak

Address: 5355 Town Center Rd. Suite 301, Boca Raton, Florida33486

Phone: 1-561-620-3580

URL: www.openpeak.com

Founded: 2002

CEO: Dan Gittleman

Employees: 25

Funding: $15 million

Key Investors: Intel Capital, STAR Ventures, Comverse Investments

OpenPeak says its ?ЗЈThinking Home?ЗҐ software allows users to listen to, view, or control virtually all consumer electronics, digital media, and entertainment systems with one mobile interface. Using a wi-fi network, the software integrates PDAs, cell phones, IP telephones, PCs, and other digital devices, eliminating the need for multiple remotes and networking connections. OpenPeak?ЗЦs strategy of partnering with original equipment manufacturers (OEMs) like Philips and developers like Intel, instead of competing with them, should prove beneficial in the long run, but if it can?ЗЦt partner with a major supplier, interoperability concerns could limit the appeal.

ORYXE Energy

Address: 6 Thomas, Irvine, CA92168

Phone: 1-940-452-9274

URL: www.oryxe-energy.com

Founded: 2001

CEO: Walter Schindler

Employees: 25

Funding: $5.2 million, 2 rounds

Key Investors: Odyssey Venture Partners, Galpin Ford, Generation Capital

As vehicle emissions standards get tougher, ORYXE Energy?ЗЦs market gets bigger. The company?ЗЦs additive, OR-LED, is the first approved by the Texas Commission on Environmental Quality to be ?ЗЈsplash blended?ЗҐ with diesel fuel to help refineries meet clean air standards. A recent test at West VirginiaUniversity found that OR-LED reduces nitrogen oxides by 5.8 percent, hydrocarbons by about 23 percent and carbon monoxide by between 9 and 10 percent. ORYXE has only one signed contract, and has yet to make a profit, though it expects to in 2005. The company also needs more money: ORYXE is currently seeking $6 million in additional funding.

PEMEAS

Address: Industriepark Hochst, G 864, 65926 Frankfurt am Main Germany

Phone: 49/0-69-305-25-96

URL: www.pemeas.com

Founded: 2004

CEO: Horst-ToreLand

Employees: 40

Funding: ?й20 million, 1 round

Key Investors: Conduit Ventures, Sustainable Asset Management, CDP Technology Ventures, Celanese

PEMEAS (Polymer Electrolyte Membrane Electrode Assemblys) makes high-temperature membranes for proton exchange membrane (PEM) fuel cells, which could eventually power light-duty vehicles, buildings, and more. Although it counts Motorola and Honda among its development partners and key customers, PEMEAS has yet to generate any revenues, and faces competition from DuPont?ЗЦs Nafion, the most widely used membrane. And it remains to be seen which type of fuel cell, alkaline, phosphoric acid, or direct methanol will dominate, or when any of them will hit the mainstream.

Power Measurement

Address: 2195 Keating Cross Rd., Saanichton, British Columbia, Canada V8M2A5

Phone: 1-250-652-7100

URL: www.pwrm.com

Founded: 1983

CEO: BradfordForth

Employees: 330+

Funding: N/A  

Key Investors: N/A

Power Measurement provides enterprise energy management systems (EEM) for energy suppliers across the globe. Using web-based software and intelligent energy meters, Power Measurement allows its clients to reduce operating costs and improve reliability, an issue brought into focus after the 2003 blackouts across much of the Eastern U.S. and Canada. Having undergone rapid expansion in the late 1990s followed by a withdrawn IPO in 2001 for ?ЗЈgeneral market conditions,?ЗҐ the company could be ready for another public attempt.

Raven Biotechnologies

Address: 1140 Veterans Blvd., SouthSan Francisco, CA94080

Phone: 1-650-624-2600

URL: www.ravenbio.com

Founded: 1999

CEO: Jennie P. Mather

Employees: 57

Funding: $66 million, 3 rounds

Key Investors: US Venture Partners, CMEA Ventures, Bear Stearns Health Innoventures, Hambrecht and Quist Capital Management, Pequot Ventures

With over half a million Americans dying from cancer each year, it?ЗЦs hard to imagine a time when the market for cancer therapeutics won?ЗЦt be huge. Raven Biotechnologies has an unusual and effective method of finding potential monoclonal antibodies on which to base cancer drugs. The company?ЗЦs expertise lies in the art of knowing exactly how long to leave stem cells before injecting them into mice, thus providing the greatest opportunity for useful antibodies to be produced by the animal. At present, however, just one of the 200-plus candidate therapeutics that Raven has identified is close to starting FDA clinical trials.

Salesforce.com

Address: OneMarketPlazaSuite 300, San Francisco, CA94105

Phone: 1-415-901-7000

URL: www.salesforce.com

NYSE: CRM

Founded: 1999

CEO: Marc Benioff

Employees: 518

2003 Revenues: $96 million

2003 Profits: $3.5 million

Salesforce.com?ЗЦs innovation has been its understanding of the social engineering dynamics behind the sales business. Because salespeople are often the least technical members of a team, many companies use software that is designed to control them. Salesforce provides the salesperson with a strong motivation to use its software by making it easy to track customers and follow up. Salesforce?ЗЦs web-based software scales from a company of one person up to a huge sales force of 10,000. Salesforce also has a high-functioning web service for customer support. There is intense competition in the space, though, and Credit Suisse First Boston recently downgraded Salesforce to ?ЗЈunderperform?ЗҐ from ?ЗЈneutral.?ЗҐ

Seclarity

Address: 2400 Louisiana Blvd. NE Suite 580, AFC-5, Albuquerque, NM87110

Phone: 1-866-800-9888

URL: www.seclarity.com

Founded: 2004

CEO: Adrian Vanzyl

Employees: 20

Funding: $4 million, 1 round

Key Investors: Intel Capital, Valley Ventures, Blumberg Capital

Network security specialist Seclarity equips each computer in a network with a SiNic Security Card, which processes and manages all traffic to and from protected hosts and other network devices. The technology addresses security requirements for financial institutions, health care organizations, and government agencies by encrypting all data and enabling network access only to those users who require it. Each SiNic card is under user or end-point control, and cannot be altered or circumvented by the user. While Seclarity?ЗЦs SiNic is an early take on a groundbreaking security architecture, its limited hardware and operating system platform support, and its hefty price tag, could limit its appeal.

SecureWave

Address: 26 place de la Gare L-1616 Luxembourg

Phone: 352/265364-11

URL: www.securewave.com

Founded: 2000

CEO: Bob Johnson

Employees: 34

Funding: $5.7 million, 2 rounds

Key Investors: Mangrove

The FBI says that the biggest threat to an organization comes from within its walls, and that each security breach caused by ?ЗЈinsider threats?ЗҐ costs an average of $500,000. SecureWave offers both device and application management software to control what goes on within a company. Its Sanctuary product line manages a white-list of allowed programs and approved peripherals ?Зф nothing else can run or hook up. Removable memory has made device management important for companies that worry about malicious types downloading corporate data to their iPods. But ensuring that new, legitimate additions get on the white-list can be a pain, especially for companies with high turnover or new software rollouts.

Seecode

Address: Admin. Bldg. 3rd Floor 10-1 Yangjae-dong Seocho-gu, Seoul 137-891 Korea

Phone: 2/2-573-2620

URL: www.seecode.com

Founded: 2000

CEO: James Hong

Employees: 25

Funding: Approx. $2.3 million, 3 rounds

Key Investors: STIC Ventures, Hansol i Ventures

Despite a limited presence outside of Asia, Seecode is a company to watch in the emerging market for Bluetooth, which allows devices to communicate with each other without wires. The company has several Bluetooth-related software applications and devices in the development pipeline. Its SEEFreeKIT, which allows drivers to communicate hands-free with a mobile phone, has generated nearly $10 million in each of the last two years, helping the company reach an expected profit of over $1 million in 2004. If Seecode can beat out other small Bluetooth companies like Parrot and Zabra, it faces a tough task ?Зф keeping its technology nimble enough to outpace established handset businesses like Jabra and Plantronics.

Sensors for Medicine and Science

Address: 12321 Middlebrook Rd. Suite 210, Germantown, MD20874

Phone: 1-301-515-7260

URL: www.s4ms.com

Founded: 1997

CEO: Marc R. Schneebaum

Employees: 20

Funding: $46 million, 3 rounds

Key Investors: New Enterprise Associates, HealthCare Venture, Rho Capital Partners, Anthem Capital Management, Abinsworth Management

Sensors for Medicine and Science has developed optical chemical sensing technology to detect and measure molecules such as glucose. The company has two products, currently in preclinical trials, aimed at the market of 150 million diabetics worldwide. The first is an implantable glucose sensor the size of a grain of rice, which can measure blood sugar levels every few minutes without user intervention, displaying the results on a watch-like reader. The company also produces a metabolic rate monitor, based on an oxygen sensor. With more than two dozen patents in the pipeline, the company seems to be creating a solid base.

Smart Fuel Cell

Address: Eugen-Sanger-Ring 4, 85649 Brunnthal-Nord, Germany

Phone: 49/89-607-454-60

URL: www.smartfuelcell.com

Founded: 2000

CEO: Manfred Stefener

Employees: 40

Funding: ?й9.6 million, 2 rounds

Key Investors: 3i Group, Pricap Venture Partners, E.I. DuPont de Nemours, Buchanan Industrial Technologies

Smart Fuel Cell (SFC) is well-poised to take advantage of the rising interest in alternative power sources. Since 2002, the company has produced two fuel cells that power recreational vehicles and industrial equipment: the A25 hit the market in 2003, and the more powerful A50 was launched earlier this year. The company posted less than $5 million in revenues for 2004, but projects profitability in 2005. The company?ЗЦs next step is producing micro fuel cells for portable electronic devices. Air-travel regulations could keep fuel cells out of passenger cabins, though, and stiff competition from dozens of other companies could keep SFC from meeting its long-term profit goals.

Silicon Optix

Address: 2025 Gateway Place Suite 360, San Jose, California95110

Phone: 1-408-487-9290

URL: www.siliconoptix.com

Founded: 2001

CEO: Paul M. Russo

Employees: N/A

Funding: $100 million, 3 rounds

Key Investors: InterWest Partners, Apax Partners, Canaan Partners, Polaris Venture Partners, Origin Partners, Focus Ventures

Silicon Optix has developed a semiconductor that turns DVDs into what the company calls ?ЗЈHollywood Quality Video.?ЗҐ In the United States, electronics manufacturer Denon?ЗЦs DVD players are the first to feature the Silicon Optix?ЗЦ chip, which is called the Realta. The chip comes from the company?ЗЦs $60,000 broadcast and post-production platforms. The software algorithms run on Realta?ЗЦs fully programmable, trillion-operations-per-second video processor. Sounds complicated, and it is ?Зф which is why Silicon Optix charges such a high price. It remains to be seen whether that will limit the market for the Realta.

Splashpower

Address: The Jeffreys Building Cowley Road, Cambridge, United KingdomCB4 0WS

Phone: 44/1223-422-340

URL: www.splashpower.com

Founded: 2001

CEO: Lily Cheng

Employees: 21

Funding: $6.7 million, 2 rounds

Key Investors: Benchmark Capital

With a motto of ?ЗЈCharging without Wires,?ЗҐ Splashpower aims to provide a wireless way for people to charge battery-operated devices without having to plug them into an outlet. The Cambridge-educated founders want to supply technology to bring Splashpower-enabled devices onto the market with wireless cradle chargers by partnering with consumer device manufacturers. They plan to also collaborate with retailers, restaurants, businesses, hotels, gas stations, and other types of central locations where people can recharge as they go about their day. But how can Splashpower hope to recharge all the different types of devices when hardly any standards exist for just the basic cell phone?

Sun Microsystems

Address: 4150 Network Cir., Santa Clara, CA95054

Phone: 1-650-960-1300

URL: www.sun.com

NASDAQ: SUNW

Founded: 1982

CEO: Scott McNealy

Employees: 32,600

2003 Revenues: 11.43 billion

2003 Profits: ($3.4 billion)

Sun Microsystems?ЗЦ meteoric rise in the world of IT has taken a nosedive over the past few years, and some wonder whether it will be able to survive the long haul. But no one can dispute Sun?ЗЦs consistent commitment to innovation: its R&D budget typically hovers around 16 percent of gross revenues. No doubt, Sun?ЗЦs challenges are significant, but its recent lab breakthrough called proximity communications is a promising technology for the chip industry. By moving from wired to wireless connections between chips, Sun?ЗЦs clever invention is expected to lead to significant boosts in the transmission of data, and hence computing performance.

Tensilica

Address: 3255-6 Scott Blvd., Santa Clara, CA95054

Phone: 1-408-986-8000

URL: www.tensilica.com

Founded: 1997

CEO: Chris Rowen

Employees: 100

Funding: $89 million, 6 rounds

Key Investors: Foundation Capital, Worldview Technology Partners, Meritech Capital, Cisco Systems

System-on-a-chip designs must overcome greater challenges as engineers work on packing more functions onto a chip for smaller and lighter electronic gadgets. Tensilica?ЗЦs family of Xtensa processor cores allows designers to configure them, a flexibility not afforded by traditional cores. Tensilica has an impressive list of customers, including Broadcom, Agilent, NEC, and Sony. In 2005, the company plans to expand into China, which has been a powerhouse in manufacturing but not in design. The company plans to offer its technology to an expanded customer base next year, but it should brace for a possible semiconductor industry downturn.

Teranode

Address: 83 S. King St. Suite 800, Seattle, WA, 98104

Phone: 1-206-219-3010

URL: www.Teranode.com

Founded: 2002

CEO: Joseph Duncan

Employees: 20

Funding: $2.6 million, 1 round

Key Investors: Ignition Partners, Washington Research Foundation, Prima Electronics

Teranode?ЗЦs software enables bioscience researchers to efficiently design, manage, and analyze experiments and data. The tool streamlines an often complex process, saving time and money for companies that are facing increasing R&D expenses. Teranode?ЗЦs technology has won over big-name life sciences customers including Pfizer, Amgen, and the FredHutchinsonCancerResearchCenter in Seattle. The University of Washington spin-off recently unveiled a new platform for better integrating various R&D steps, and now Teranode will have to prove it can turn a profit,

a goal the company hopes to reach next year.

Teros

Address: 3965 Freedom Cir., 9th Floor, Santa Clara, CA95054

Phone: 1-408-850-0800

URL: www.teros.com

Founded: 2000

CEO: Bob Walters

Employees: 50

Funding: $26.5 million, 3 rounds

Key Investors: Bank of America Venture Partners, CMEA Ventures, Institutional Venture Partners, New Enterprise Associates

Teros?ЗЦ secure application gateway appliances are among the best at protecting the highly vulnerable web application layer from attacks. The appliances treat any suspicious behavior as a potential threat and use an adaptive learning engine that teaches itself based on prior behavior. In November, Teros and three security startup competitors joined forces, challenging established vendors such as Cisco and Check Point to put their application security to the test with certifier ICSA Labs. While the move took guts and pride-swallowing, it also demonstrated how tough it is for companies like Teros to compete with entrenched security businesses ?Зф much less with each other.

TerraCycle

Address: 121 New York Ave., Trenton, NJ08638

Phone: 1-609-393-4252

URL: www.terracycle.org

Founded: 2001

CEO: Thomas Szaky

Employees: 20

Funding: $2 million, 2 rounds

Key Investors: World Wide Holdings, Stein Holdings

TerraCycle is a consumer products company that makes eco-friendly plant food, with a twist: the company only uses garbage to produce everything, from the plant food itself to the soda bottles used to package it. Using only refuse makes the cost of raw materials actually negative, resulting in incredibly high operating margins and a product that is cheaper for consumers, more effective than the competition since it is certified organic, and environmentally sound. While TerraCycle has managed to overcome past problems of generating sales and breaking into the retail market and large stores like Home Depot, it will have to work hard to aggressively scale up production.

The NewsMarket

Address: 6 E. 32nd St. 6th Floor, New York, NY10016

Phone: 1-212-497-9022

URL: www.thenewsmarket.com

Founded: 2000

CEO: Shoba Purushothaman

Employees: 35

Funding: $10.5 million, 3 rounds

Key Investors: Ascend Venture Group, New York Community Investment Company

By distributing video and multimedia content from newsmakers to journalists, The NewsMarket has helped take public relations to the digital level. Last year, the company released its current platform for browsing, previewing, and ordering video content online. More than 2,000 news organizations including CNN, CNBC, and BBC already rely on the content, which they can download for free. Clients, including General Motors and the United Nations, pay NewsMarket for hosting and distributing video clips. NewsMarket currently has 60 customers and expects to increase that number to 150 in the next year. Growth will depend heavily on the public relations resources of corporations, agencies, and advocacy groups to regularly produce their own video press releases.

ThingMagic

Address: One Broadway, Cambridge, MA02142

Phone: 1-503-691-2452

URL: www.thingmagic.com

Founded: 2000

CEO: Tom Grant

Employees: 25

Funding: N/A

Key Investors: N/A

ThingMagic may have the smarts to ride the RFID trend to riches. Radio Frequency Identification (RFID) tags are the new bar codes. But unlike bar codes, using tags able to emit radio signals means every product doesn?ЗЦt have to be scanned by hand, potentially boostingwarehouse productivity for early adopters like Wal-Mart. ThingMagic designs smart RFID readers, and licenses those designs to manufactures like Tyco International and Japan?ЗЦs Omron. While more expensive than low-end readers, ThingMagic argues its fancy readers ?Зф full-fledged little computers able to talk to other machines over theInternet ?Зф are easier to manage and are able to process data 100 times faster than the closest competitor.

Thor Technologies

Address: 75 Ninth Ave. 7th Floor, New York, NY10011

Phone: 1-212-374-9800

URL: www.thortech.com

Founded: 1991

CEO: J. Alberto Yepez

Employees: N/A

Funding: $34 million, 2 rounds

Key Investors: Trident Capital, Bain Capital Ventures, Boston Capital Ventures, Longworth Venture Partners, RBC Technology Ventures

The increasing push for corporate accountability is making Thor Technologies a key player for enterprises anxious to comply with stricter regulations such as Sarbanes-Oxley. Thor?ЗЦs software, Xellerate Identity Manager, provides an identity and information management system to ensure employees receive appropriate access to their company resources and privileges, from setting and re-setting passwords to getting the proper equipment for the job. Its products can save money and time for managers in enforcing rules and securing company databases. Thor?ЗЦs offerings may be attractive, but the company must continue to innovate to distinguish itself in a lucrative and crowded field.

Threshold Pharmaceuticals

Address: 1300 Seaport Blvd. 5th Floor, Redwood City, CA94063

Phone: 1-650-474-8200

URL: www.thresholdpharm.com

Founded: 2001

CEO: Harold E. Selick

Employees: 40

Funding: $50 million, 2 rounds

Key Investors: Morgenthaler Ventures, Pequot Ventures, Three Arch Partners, Sofinnova Ventures, ProQuest Investments

Threshold Pharmaceuticals?ЗЦ small-molecule treatment, glufosfamide, its top product, was fast-tracked by the FDA in November of 2004 as a therapy for pancreatic cancer, and is now in Phase III clinical trials. This adds credence to the company?ЗЦs claim that its treatment, a product of metabolic targeting technology that combats dividing tumor cells, can become a top therapeutic for the disease and prevent relapse. With a crowded group of competing cancer drugs both on the market and pending FDA approval, Threshold says it must prove all of its drug candidates can capably fight devastating human diseases.

TimesTen

Address: 800 West El Camino Real, Mountain View, CA94040

Phone: 1-650-526-5100

URL: www.timesten.com

Founded: 1996

CEO: James R. Groff

Employees: 75

Funding: $45 million, 4 rounds

Key Investors: Sippl MacDonald Investors, Mayfield, Morgenthaler Ventures, Technology Crossover Ventures

TimesTen?ЗЦs software provides a much-needed tool for the real-time management of customer transactions and data. The company?ЗЦs products allow firms to quickly process, track, and respond to new information across networks. A Hewlett-Packard spin-off, TimesTen has seen its software installed in firms such as Cisco, Deutsche Bank, Sprint, and United Airlines. The company unveiled new products in 2004 and expanded its reach into gaming, transportation, and defense sectors. TimesTen is on the right track, as success will ultimately depend on its ability to penetrate a wide range of industries.

Traction Software

Address: 245 Waterman St. Suite 309, Providence, RI02906

Phone: 1-401-528-1145

URL: www.TractionSoftware.com

Founded: 1996

President Greg Lloyd

Employees: 8

Funding: $1.2 million, 2 rounds

Key Investors: In-Q-Tel (on behalf of the CIA), Slater Interactive, and other private angel investors

Traction Software?ЗЦs enterprise weblog technology provides contextual intelligence for internal company communications. The technology works like personal blog software, but within secure, permission-protected environments. The system is designed to communicate more information in greater context, while allowing dynamic control of permission-protected spaces. This makes it possible for clients to consume and share more information in a secure environment with effective controls. Market penetration will, however, depend largely on how well educated end-users are to the efficacy of business blogging. In addition, Traction will need to identify and demonstrate the value of aligning this kind of software with an organization?ЗЦs key business processes.

Valence Technology

Address: 6504 Bridge Point Pkwy.Suite 415, Austin, TX78730

Phone: 1-888-827-3623

URL: www.valence.com

NASDAQ: VLNC

Founded: 1989

CEO: Stephan Godevais

Employees: 150

2003 Revenues: $2.56 million

2003 Profits: ($37.9 million)

Valence Technology has received orders from customers such as Lockheed Martin and Tyco Electronics for its unique battery technology, Saphion. Valence markets the only phosphate-based lithium-ion battery, which is supposedly more stable than regular lithium-ions, which have been recalled for rupturing or catching fire. Valence faces competition from companies such as Ultralife, Saft, and Avestor, but its biggest challenge is to persuade people to switch over from other types of batteries.

Valere Power

Address: 661 N. Plano Rd. Suite 300, Richardson, TX75081

Phone: 1-469-330-9100

URL: www.valerepower.com

Founded: 2001

CEO: Andy Marsh

Employees: 115

Funding: $33.5 million, 3 rounds

Key Investors: Alcatel Ventures, Dali-Hook Partners, JP Morgan Partners, and Sierra Ventures

Co-founded by Andy Marsh, a veteran of Bell Labs?ЗЦ power systems division, Valere Power has shown impressive growth in the three years since its founding. Sales of its high-efficiency DC power systems gave Valere its second year of profitability, and the company counts more than 100 major customers including Cisco Systems, Comcast, and Fujitsu. Its power units, designed for the telecommunications and networking companies, are half the size of competing products, use one-third of the heat, and allow remote management. But to become a major power player, Valere must continue its nascent expansion into the European and Asian markets and beat established vendors on their own turf.

VeriSign

Address: 487 East Middlefield Rd., Mountain View, CA94043

Phone: 1-650-961-7500

URL: www.verisign.com

NASDAQ: VRSN

Founded: 1995

CEO: Stratton Sclavos

Employees: 3,000

2003 Revenues: $1.054 billion

2003 Profits: ($259 million)

Every time you look up an Internet domain that ends with .com or .net, your request goes through VeriSign?ЗЦs domain name server. The company builds Internet infrastructure, and for almost a decade it has played an integral role in making Internet commerce and communication possible. This year, the company developed a next-generation platform that supports both Internet protocols and older telecommunications standards. This innovative integration of communications systems will build the backbone for next-generation communications such as voice-over-IP. Still, it will be a long time before the company?ЗЦs stock closes above $250, as it did in February 2000.

VirtuOz

Address: 51, rue de Verdun F-92158, Suresnes Cedex, France

Phone: 33/1-46-97-20-67

URL: www.virtuoz.fr/en

Founded: 2002

CEO: Alexandre Lebrun

Employees: 10

Funding: $400,000, 1 round

Key Investors: Founders

A universal goal for most companies is optimizing transactions and keeping close tabs on support costs. VirtuOz aims to relieve that pressure point by bridging the gap between customers?ЗЦ need for online and offline transactions. VirtuOz claims to use an intuitive, easy-to-use chat interaction. The underlying technology is based on a virtual agent that is embedded within a company?ЗЦs web site or mobile service. This reduces customer service costs by lowering the number of messages that typically overwhelm a call center. The challenge ahead for VirtuOz is to build momentum for its service, a task that will require striking key partnerships with large players in the industry.

VistaScape Security Systems

Address: 5901B Peachtree-Dunwoody Rd.Suite 550, Atlanta, Georgia 30328

Phone: 1-678-919-1130

URL: www.vistascape.com

Founded: 1999

CEO: Glenn McGonnigle

Employees: 60

Funding: $26 million, 4 rounds

Key Investors: Paladin Capital Group, H.I.G. Ventures, CDP Capital, Visionaria Venture Capital

Demand for tighter security in public and private sectors will continue to drive high-tech innovations, and VistaScape Security Systems?ЗЦ technology quickly processes surveillance data and alerts security staff of any dangers. The software, SiteIQ, can provide real-time analysis of information from video, chemical, radar, or other surveillance methods. The company has seen a greater use of its software in 2004, including the G-8 Summit in Georgia, the San Diego port, and PPG Industries, a global supplier of chemical and glass products. VistaScape can further take advantage of the growing market for security technology by introducing more innovations.

Vonage

Address: 2147 Rte. 27, Edison, NJ08817

Phone: 1-732-528-2600

URL: www.vonage.com

Founded: 2001

CEO: Jeffrey Citron

Employees: 600+

Funding: $208 million, 4 rounds

Key Investors: New Enterprise Associates, 3i, Meritech Capital

The leading voice-over-IP (VoIP) provider in the U.S., Vonage claims more than 350,000 customers and over 50 percent of the domestic market. Research firm Adventis predicts that there will be 4.8 million VoIP lines in 2005, and Vonage?ЗЦs growth has forced telecoms to speed up their VoIP deployment. Its business model, technology platform, and network architecture keep costs low and pass on the savings to the consumer through the company?ЗЦs inexpensive monthly subscription service. The company?ЗЦs federal court hearing and FCC ruling have enabled the VoIP industry to remain interstate in nature, avoiding state regulation. Though Vonage had predicted profits by the end of this year, the company has been attempting to expand internationally into Europe and Asia-Pacific.

Vontu

Address: One California St. Suite 1500, San Francisco, CA94111

Phone: 1-415-364-8100

URL: www.vontu.com

Founded: 2002

CEO: Joseph Ansanelli

Employees: 40

Funding: $15 million, 2 rounds

Key Investors: Benchmark Capital, Venrock Associates, and U.S. Venture Partners

Vontu?ЗЦs flagship product, Vontu Protect, monitors email, instant messages, FTP files, and other electronic communication on corporate networks, checking for leaks of sensitive information such as social security numbers. While competitors create firewalls to prevent thieves or hackers from getting in, Vontu aims to keep employees from sending information out. Although analysts say Vontu has a great idea, they predict corporations will apply digital rights management (DRM) to encrypt business data and couple it with policies that determine how information moves

in and out of the company.

WebEx Communications

Address: 307 West Tasman Dr., San Jose, CA95134

Phone: 1-408-435-7000

URL: www.webex.com

NYSE: WEBX

Founded: 1996

CEO: Subrah Iyar

Employees: 1,600

2003 Revenues: $189.3 million

2003 Profits: $59.8 million

A market leader in the fast-growing online meeting industry, WebEx Communications lets clients meet with long-distance colleagues or customers over the standard web browser. Users sign into the meeting at a specific Internet address and can then share documents, audio, video, and software programs. Industry experts say web conferencing became popular not only because travel to onsite meetings is expensive, but also because it can be dangerous and time-consuming. Critics believe the nefarious uses of technology like WebEx outweigh its value, since spyware and computer viruses function similarly to the way WebEx passes information through security walls set up by company networks and browsers.