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Semantic Web - Funding Analysis (Technical Insights)
Frost & Sullivan, March 2011, Pages: 57
This Frost & Sullivan research service titled Semantic Web--Funding Analysis offers insights on the funding trends within this space and recommendations for investors and stakeholders interested in venturing into this segment. In addition, semantic start-ups that might potentially require funds to take their technology to the next stage could benefit by getting a glimpse of key venture capitalists and other funding bodies.
Technology Overview
Scope for Fund Procurement Still Exists Despite Lackluster Investment Climate
The rapid evolution of the Internet and the explosion of online data have enhanced the need for richer and more diverse capabilities. Semantic web is poised to play a very important role in defining the next generation of the Internet. By adding structure and meaning to online content, semantic technology can help refine search results and perform sophisticated tasks for end users. The U.S. Government’s commitment to openness, collaboration, and transparency in all government initiatives has propelled the adoption of semantic technologies in governmental agencies. More than 2,70,000 data sets are available for public viewing with the help of the Data Guv project. “While the government has promoted the technology by generating data sets and mash ups from federal information, private funding agencies show reluctance as the business value of semantic web does not seem promising,” notes the analyst of this research service. “Moreover, funding agencies are reluctant to invest in certain segments which are dominated by key participants.”
Inclination toward hardcore technology and research projects has triggered a sense of disinterest among funding bodies, which expect better and faster return on investment (ROI), especially in the post recession era. During 2010, funding inflow had not been appreciable for semantic companies. Big funding deals were sparse in the semantic web arena unlike other technologies in the information and communications domain.
Absence of Clear ROI Detracts from the Profit Potential of Semantic Technologies
A key challenge stalling fund procurement is the lack of a definite business case. Funding agencies show interest in providing monetary assistance only when the prospect for reaping profits is ensured. Yet another barrier is the presence of openly available data sources, which have poor business models that acquire negligible financial incentives as there are no serious investments due to the free model. Scientific research projects with limited applicability garner little interest from funding bodies, as they do not have the potential to meet the in-demand commercial needs.
At present, semantic technology witnesses funding inflow for product development. This is expected to result in diverse solutions catering to different industry verticals to enhance rapid adoption of this technology. “In future, the investments are likely to be made in projects where focus is on enhancing existing ecosystems on the internet especially in social computing, search engine enhancements, and customized solutions for enterprises and also into advertising and analytic tools which are capable of delivering refined and smarter results for the user,” says the analyst. “Semantic innovations relevant to thriving ecosystems such as Facebook and Twitter stand a better chance of attracting funds from venture capitalists and other funding agencies.” Investors will be keen to invest in companies that have solutions offering business value rather than those that are purely technology developers. Clarabridge, which delivers highly customized enterprise processing solutions, had acquired $4.33 million for marketing and sales expansion.
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