Silicon Valley
Christine Johnson
October, 2013
What’s so special about the San Francisco Bay Area?

Known for its:
Natural beauty
§  Progressive
thinking
§  Liberal po...
Great schools fuel great minds

Stanford University graduates have
created an estimated 5.4 million jobs
and generate annu...
Silicon Valley

Silicon Valley was originally named
“The Valley of Heart’s Delight.”
Orchards of apricots, prunes, cherrie...
Silicon Valley today: A scientific/commercial renaissance

Gene splicing and gene cloning
discoveries at Bay Area universi...
What are the top strengths of doing business in SV?

71% access to
skilled labor
entrepreneurial
mindset

60%

proximity t...
The Venture Capital Capital

There are more VCs in Menlo Park
than any other city in world.
Sand Hill Road has been known ...
Some of the companies founded here

Hewlett Packard

Intuitive Surgical

Intel

Maxim Integrated
Conner Peripherals
Apple ...
Highway 101 – The tech industry’s Madison Avenue

“Even after the collapse of the
dot-com bubble, about 4,000
IT-related c...
The early years

1953: William Shockley left Bell Labs in a disagreement over the
handling of the invention of the transis...
The early years

1977: The Apple II, Commodore PET and the RadioShack TRS-80
launched the first wave of personal computers...
The heady ’90s of high flying stocks & bonuses

In the ’90s, many tech companies paid
their employees in stock options.
As...
The dot-com bubble

The historic speculative bubble of
1997–2000 was known as the dot-com
bubble, or the dot-com boom & bu...
Some memorable dot bombs

Boo.com
Lycos

Boo.com – spent $188m
in just 6 months in an
attempt to create a global
online fa...
Cash or stock, you make the call

Even vendors were offered stock in lieu of cash.
This created more than one “collateral”...
Cash or stock, you make the call

Alas, the story of Pejman Nozad.
In 2005, Facebook founding President
Sean Parker approa...
A win/win way to recruit in Silicon Valley

The race for talent in Silicon Valley is
highly competitive.
Big and small com...
2011: Largest venture capital deals
Greater Bay Area

©  2013 SAP AG or an SAP affiliate company. All rights reserved.

18
2011: Largest IPOs in the Greater Bay Area
$1 billion

$353m
$235m

$198m
$120m

Zynga

LinkedIn

©  2013 SAP AG or an SAP...
2012: Largest venture backed companies
Greater Bay Area

©  2013 SAP AG or an SAP affiliate company. All rights reserved.
...
2012: Largest IPOs in the Greater Bay Area

$16 billion

$732m

$264m

$260m
$120m

Facebook

Workday

Splunk

©  2013 SAP...
Silicon Celebrities

Silicon Valley pioneers are honored at
The Computer History Museum Fellows Awards and
The SV Forum Vi...
SAP Silicon Valley
SAP – Celebrating 20 years in Silicon Valley

SAP established the
first development
group outside of
Walldorf, Germany
in ...
SAP Silicon Valley today

Over 3,500 employees in four Bay Area locations
One of the most diverse locations with 40+
natio...
SAP Palo Alto: Sustainability Front-Runner

§ 

650 solar panels

§ 

3 telepresence rooms

§ 

100% renewable energy

...
SAP Ventures: Investment Front-Runner
Help innovative and disruptive companies with SAP’s expertise, relationships and
geo...
Thank you
Contact Information:
Christine Johnson
Sr. Director, SAP Community Relations
@SAPBayArea
My Blog: http://scn.sap...
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The History of Silicon Valley (by Christine Johnson, SAP)

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This deck has been published with the kind permission of Christine Johnson, Sr. Director of SAP Community Relations.

"This deck provides an overview of the history of Silicon Valley, mainly as it pertains to the high-tech sector.

There are also a few slides on SAP in Silicon Valley, as the company has a big presence in Palo Alto and is very involved in the local community."

You can follow Christine at @SAPBayArea.

Published in: Business, Technology

Transcript of "The History of Silicon Valley (by Christine Johnson, SAP)"

  1. 1. Silicon Valley Christine Johnson October, 2013
  2. 2. What’s so special about the San Francisco Bay Area? Known for its: Natural beauty §  Progressive thinking §  Liberal politics §  Entrepreneurship §  Diversity §  Home to approximately 7.15 million the largest driver of population growth in CA San Mateo and Santa Clara are 2 of the top 25 wealthiest counties in the US The largest city in the area San Jose 10th most populous city in the US, oldest city in CA and its first capital 9 counties + San Francisco, Oakland & San Jose metros Image from : http://www.siliconvalleyindex.org/index.php/component/content/article?id=101 ©  2013 SAP AG or an SAP affiliate company. All rights reserved. 2
  3. 3. Great schools fuel great minds Stanford University graduates have created an estimated 5.4 million jobs and generate annual revenues of $2.7 trillion* The revenues of companies that were founded by Stanford University students equal the gross national product of the world’s 10th largest economy. 71 Nobel Laureates from UC Berkeley. §  20 private colleges including University of San Francisco, Stanford and Santa Clara University 52 Nobel Laureates from Stanford. §  6 public universities including UC Berkeley, UC San Francisco, SJSU, SFSU §  30 community colleges in the greater Northern California area * Based on responses to the 2011 Alumni Innovation Survey, sponsored by the venture capital firm Sequoia Capital. ©  2013 SAP AG or an SAP affiliate company. All rights reserved. 3
  4. 4. Silicon Valley Silicon Valley was originally named “The Valley of Heart’s Delight.” Orchards of apricots, prunes, cherries and other agricultural products dominated the early landscape. The first technology innovators formed the beginnings of what we now know as Silicon Valley in the 1950’s. The area was first nicknamed “Silicon Valley” in a 1971 Electronic News article by journalist Don Hoefler.* • Computer History Museum, http://www.computerhistory.org/revolution/digital-logic/12/328/1401 • http://www.morganhilltimes.com/articles_from_gilroy/andy-s-orchard-featured-in-sunset-magazine-spread/article_28d12001-1e11-53cc-a5f0-7e616228d558.html?mode=image • http://www.marianinut.com ©  2013 SAP AG or an SAP affiliate company. All rights reserved. 4
  5. 5. Silicon Valley today: A scientific/commercial renaissance Gene splicing and gene cloning discoveries at Bay Area universities have spurred advances in biotechnology. Other advances mark Silicon Valley as a unique place whose creative energies have changed the world. §  §  §  §  §  Lasers Nuclear magnetic resonance Random access computer storage Disk drives Integrated circuits §  Personal computers §  Open-heart surgery §  Inkjet printers Source: http://en.wikipedia.org ©  2013 SAP AG or an SAP affiliate company. All rights reserved. 5
  6. 6. What are the top strengths of doing business in SV? 71% access to skilled labor entrepreneurial mindset 60% proximity to customers 44% competitors and Source: Poll by SVLG (Silicon Valley Leadership Group) of 177 innovation economy CEOs and Senior Officers ©  2013 SAP AG or an SAP affiliate company. All rights reserved. 6
  7. 7. The Venture Capital Capital There are more VCs in Menlo Park than any other city in world. Sand Hill Road has been known as “the street of dreams” for seekers of venture funded capital. An entrepreneurial spirit and forgiveness of failure culture are the norm here. Hewlett Packard started with $500 Atari started with $250 by Nolan Bushnell’s own money. People thought playing games on a TV set was one of the stupidest ideas ever. ©  2013 SAP AG or an SAP affiliate company. All rights reserved. 7
  8. 8. Some of the companies founded here Hewlett Packard Intuitive Surgical Intel Maxim Integrated Conner Peripherals Apple Palm Inc. Genentech Tesla Motors Yelp ETrade KLA Tencor NetFlix Atari Xilinx Intuit Google Atmel Corp MIPS Technologies Acuson Corp Cypress Semiconductor Facebook Lam Research Rambus SRI International Twitter Electronic Arts Trimble Navigation Adobe Ebay PayPal Advanced Micro Devices Oracle Quantum Corporation SLAC National Accelerator Laboratory Yahoo! Silicon Graphics Bloom Energy Cisco NVIDIA Rolm Communications Applied Materials Symantec Food Machinery Corporation ©  2013 SAP AG or an SAP affiliate company. All rights reserved. Sun Microsystems 8
  9. 9. Highway 101 – The tech industry’s Madison Avenue “Even after the collapse of the dot-com bubble, about 4,000 IT-related companies located along Highway 101 from San Francisco to San Jose generate approximately $200 billion in IT-related revenue annually.” Gregory R. Gromov, The Roads and Crossroads of Internet History. San Francisco US 101 Oracle Google Violin Memory Computer History Museum Hacker Dojo Microsoft Labs NASA Ames Yahoo! Bloom Energy NetApp EMC Intel Cisco/WebEx McAfee eBay/PayPal San Jose ©  2013 SAP AG or an SAP affiliate company. All rights reserved. 9
  10. 10. The early years 1953: William Shockley left Bell Labs in a disagreement over the handling of the invention of the transistor. 1956: Shockley creates Shockley Semiconductor Laboratory in Mountain View, California, dedicated to research around using silicon, instead of germanium, for transistors and diodes. 1957: Shockley wins the Nobel prize in Physics and the " traitorous eight" engineers leave the company to form Fairchild Semiconductor. 1971: Two of the original employees of Fairchild Semiconductor, Robert Noyce and Gordon Moore, go on to found Intel and create the first microprocessor, the Intel 4004. 1975: Steve Wozniak, builds a home computer from a cheap microprocessor, and shows it to the Homebrew Computer Club in Menlo Park. 1976: Woz and his friend and fellow club member, Steve Jobs, form Apple Computer in Steve's garage in Cupertino and Apple's first personal computer, the Apple I, is sold for $666.66. Sources: Wikipedia, www.computerhistory.org/revolution ©  2013 SAP AG or an SAP affiliate company. All rights reserved. Moore’s Law Image sources: Wiki Commons? 10
  11. 11. The early years 1977: The Apple II, Commodore PET and the RadioShack TRS-80 launched the first wave of personal computers. 1979: Xerox’s Palo Alto Research Center (PARC) was a hotbed of innovation in the ’70’s. In 1979, Xerox gave Apple access to some new ideas in graphical user interface, which were reflected in the first Mac. 1981: Adam Osborne founds Osborne Computer Company and debuts an early “luggable” computer that cost $1,795 and weighed 23.5 pounds. 1982: Three Stanford grads and 1 UC Berkeley grad started Sun Microsystems, originally manufacturing powerful graphic workstation computers, later developers of software including Java. Sun was sold to Oracle in 2009 and their flagship campus is now home to Facebook. 1994: Jim Clark and Marc Andreessen were the founders of Netscape. Netscape’s Navigator and Microsoft’s Internet Explorer browsers went head to head to capture the burgeoning internet market. 1995: Netscape’s successful IPO in 1995 kicked off the Internet Boom that continued into the early 2000’s. Source: www.computerhistory.org/revolution ©  2013 SAP AG or an SAP affiliate company. All rights reserved. 11
  12. 12. The heady ’90s of high flying stocks & bonuses In the ’90s, many tech companies paid their employees in stock options. As stock rose, the late ’90s became a time of irrational exuberance. Offices sported Foosball tables and video games. Secretaries had options worth millions. Companies had signing bonus mania, giving away free house cleaning, or even BMWs, to new employees. Source: http://www.thebubblebubble.com/dot-com-bubble/ ©  2013 SAP AG or an SAP affiliate company. All rights reserved. 12
  13. 13. The dot-com bubble The historic speculative bubble of 1997–2000 was known as the dot-com bubble, or the dot-com boom & bust, or the Internet bubble, take your pick! The collapse of the bubble took place during 2000-2001. Microstrategy’s stock slid from $3,500 to $4 per share Cisco’s stock declined 86% Some companies failed completely. Some lost a significant portion of their market caps. Some recovered and surpassed their bubble peaks. Amazon’s stock went from $107 to $7 per share… …but a decade later it exceed $200 Source: http://en.wikipedia.org/wiki/Disk_drive, http://en.wikipedia.org/wiki/Amazon.com, http://en.wikipedia.org/wiki/Cisco ©  2013 SAP AG or an SAP affiliate company. All rights reserved. 13
  14. 14. Some memorable dot bombs Boo.com Lycos Boo.com – spent $188m in just 6 months in an attempt to create a global online fashion store GeoCities Pets.com GeoCities – purchased by Yahoo for $3.6 billion then closed by Yahoo 10 years later. Excite@Home InfoSpace Webvan WorldCom Pets.com – ran a $1.2 million Super Bowl commercial in 2000 featuring their famous sock puppet mascot, Inktomi ©  2013 SAP AG or an SAP affiliate company. All rights reserved. and closed ten months later. 14
  15. 15. Cash or stock, you make the call Even vendors were offered stock in lieu of cash. This created more than one “collateral” millionaires, for example, David Choe. Choe is Korean-American muralist and graffiti artist who grew up rough in Los Angeles. A bad-boy street artist known for doing cover art for a Linkin Park album. In 2005 Choe was commissioned to paint murals at the first Facebook headquarters. CASH He was offered the choice of cash or Facebook stock. He said the very idea of Facebook seemed “ridiculous and pointless” at the time, but he chose the stock. Now estimated worth $500m. STOCK ©  2013 SAP AG or an SAP affiliate company. All rights reserved. 15
  16. 16. Cash or stock, you make the call Alas, the story of Pejman Nozad. In 2005, Facebook founding President Sean Parker approached him about renting 165 University Ave. in Palo Alto, a property owned by Mr. Nozad's partners. The deal came with a chance to buy $50,000 of stock in the fledgling social network – but with strings attached to the lease. Mr. Nozad's partners said no. "We put on our real-estate hat, rather than our investment hat," he remembers. By his math, those shares in Facebook would be valued at about $50 million today. Source: http://online.wsj.com/article/SB10001424052702303360504577412031389480536.html ©  2013 SAP AG or an SAP affiliate company. All rights reserved. 16
  17. 17. A win/win way to recruit in Silicon Valley The race for talent in Silicon Valley is highly competitive. Big and small companies alike have to compete pre-IPO start-ups and companies like Facebook and Google who offer incredible compensation packages including stock and top shelf benefits. “It’s very difficult to compete on comp, especially right now when a huge element of compensation is stock. When you’re competing with the promise of pre-IPO companies it’s just driving your compensation up. We’re going to have to introduce a disparity in our internal equity. We should pay what it takes for amazing critical talent.” Nellie Peshkov, VP of global talent acquisition at Electronic Arts 5 est 1 re rg he la ct squa X=T erfe igit p me. d lindro pa RocketFuel’s clever Hwy 101 billboard recruits engineers with a challenge, solve the puzzle to get the address of their company. Source: http://www.ere.net/2012/07/20/recruiters-ponder-pay-metrics-and-relocation-in-californias-silicon-valley/ ©  2013 SAP AG or an SAP affiliate company. All rights reserved. 17
  18. 18. 2011: Largest venture capital deals Greater Bay Area ©  2013 SAP AG or an SAP affiliate company. All rights reserved. 18
  19. 19. 2011: Largest IPOs in the Greater Bay Area $1 billion $353m $235m $198m $120m Zynga LinkedIn ©  2013 SAP AG or an SAP affiliate company. All rights reserved. Pandora Media Solazyme Jive Software 19
  20. 20. 2012: Largest venture backed companies Greater Bay Area ©  2013 SAP AG or an SAP affiliate company. All rights reserved. 20
  21. 21. 2012: Largest IPOs in the Greater Bay Area $16 billion $732m $264m $260m $120m Facebook Workday Splunk ©  2013 SAP AG or an SAP affiliate company. All rights reserved. Palo Alto Networks Infoblox $115m Guidewire Software $94m Vocera Communications 21
  22. 22. Silicon Celebrities Silicon Valley pioneers are honored at The Computer History Museum Fellows Awards and The SV Forum Visionary Awards. Some reach celebrity status beyond the valley… Ÿ  Robert Noyce Ÿ  Gordon Moore Ÿ  Andy Grove Ÿ  Ÿ  Ÿ  Ÿ  Ÿ  Bill Hewlett Dave Packard Steve Jobs Steve Wozniak Guy Kawasaki Even Hollywood wants in on the act… Ÿ  Scott McNealy Ÿ  Larry Ellison Ÿ  John Doerr Ÿ  Ÿ  Ÿ  Ÿ  Ÿ  Don Valentine Charles Schwab Linus Torvalds Marc Andreessen Jerry Yang Ÿ  Sergey Brin Ÿ  Larry Page Ÿ  Marissa Mayer Ÿ  Ÿ  Ÿ  Ÿ  Ÿ  Carly Fiorina Meg Whitman Mark Zuckerberg Sheryl Sandberg Elon Musk “Timberlake To Gaga: Celebrities Go Silicon Valley With High-Tech Investments” Huffington Post 07/26/11 Source: http://www.computerhistory.org/fellowawards/hall/, https://svforum.org/Visionary-Awards , http://www.huffingtonpost.com/2011/07/26/celebrities-silicon-valley-lady-gaga_n_909494.html ©  2013 SAP AG or an SAP affiliate company. All rights reserved. 22
  23. 23. SAP Silicon Valley
  24. 24. SAP – Celebrating 20 years in Silicon Valley SAP established the first development group outside of Walldorf, Germany in Foster City, CA SAP Labs, LLC was incorporated Changed the name of SAP Technology to SAP Labs and moved the facility to Palo Alto 1993 1996 1997 ©  2013 SAP AG or an SAP affiliate company. All rights reserved. 24
  25. 25. SAP Silicon Valley today Over 3,500 employees in four Bay Area locations One of the most diverse locations with 40+ nationalities and languages spoken 74 of the 313 managers are women* Palo Alto EBC hosted 1,404 meetings in 2012 and 1,047 meetings In 1H 2013 SAP Silicon Valley Products and Technologies include Business Applications, Database & Technology, Mobility, Cloud, and Analytics Home of SAP HANA, Startup Focus, Western Sales, SAP Ventures, Ecosystems & Channel, User Experience, and Mobility Design Center * SAP Palo Alto, August 2013 ©  2013 SAP AG or an SAP affiliate company. All rights reserved. 25
  26. 26. SAP Palo Alto: Sustainability Front-Runner §  650 solar panels §  3 telepresence rooms §  100% renewable energy §  18 charging stations §  Rectifier, air-side economizer and 380v DC data center §  LEED Gold Building §  LEDs & intelligent lighting systems §  Bioswale & garden §  Sustainable food services ©  2013 SAP AG or an SAP affiliate company. All rights reserved. 26
  27. 27. SAP Ventures: Investment Front-Runner Help innovative and disruptive companies with SAP’s expertise, relationships and geographic reach in addition to capital (partial list) ©  2013 SAP AG or an SAP affiliate company. All rights reserved. 27
  28. 28. Thank you Contact Information: Christine Johnson Sr. Director, SAP Community Relations @SAPBayArea My Blog: http://scn.sap.com/people/christine.johnson/blog LinkedIn: www.linkedin.com/pub/christine-johnson/2/155/101 ©  2013 SAP AG or an SAP affiliate company. All rights reserved.
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