Inside 2008’s hottest tech startups

Money is the mother’s milk of politics, it’s been said, but when it comes to technology, ideas are the real coin of the realm. In that spirit, we present InfoWorld’s hottest tech startups of 2008, an honor roll of 10 young companies whose business-oriented technologies should be on your radar screen.

[ See who InfoWorld named its top tech startups for 2008. Discover other cool companies whose technology may inspire you with our 2007 Month of Enterprise Startups and our 2006 Hot Tech Startups features. ]

What did we seek? At least one of three qualities: truly new technologies, innovative approaches within existing technology areas, and technologies applied in new ways to solve different problems.

Laborious as it was, the judging rewarded us with a wealth of new ideas to ponder, new technologies to evaluate and, most important of all, the clear sense that innovation, the real engine of the technology industry, is not only alive and well but thriving in Silicon Valley and beyond.

Virtualization’s big wave As we evaluated the entries, we were struck by how many were focused on various aspects of virtualization. Some, such as Montego Networks, offer security for the virtual network; others, such as V-Kernel, offer innovative tools to manage and monitor virtual machines.

The wealth of virtualization-oriented entries is no surprise. Virtualization, in all its flavors, is becoming a mainstream technology, and the weakness plaguing the economy only serves to make its money-saving attributes all the more attractive.

Moreover, we’re seeing a pattern that has occurred repeatedly in our industry: As emerging technologies take center stage, more and more companies spring up on the margins, offering products and services needed to complement the strengths of the early innovators. Interestingly, many of the newcomers to virtualization began with a focus on EMC’s VMware, the segment’s early leader, but are now broadening their scope to support technologies from Citrix, Microsoft and Virtual Iron.

New twists on traditional challenges System management — of the physical network, as well as the virtualized one — remains a challenge for IT, and new companies such as Xangati are coming forward with innovative solutions. Extracting the most value from corporate data stores becomes ever more important and ever more difficult as the sheer amount and format of data continues to rocket. Business intelligence and database add-ons contributed many entries; of these, we liked Vertica, a grid-enabled, column-oriented relational database, the best.

Cool technology to behold We saw two companies whose handiwork is a delight to behold: Perceptive Pixel, which offers a breakthrough in large touch screens, and Earthmine, a company that aspires to “index reality” with its stunningly detailed, street-level mapping. Both there’s more than eye candy here. Imagine how useful it would be to see a network layout on a six-foot screen and be able to drill down to the workstation or switch level with a tap of the finger. Or think about the possibilities of a photomap so detailed you could accurately measure the distance between any two points.

How we judged the 10 hottest tech startups Ninety-five companies were nominated this year, and our editors also looked at several dozen more. We ruled out companies that are primarily in the consumer space, and those that have not yet seen a product through to at least beta. Furthermore, companies had to have been founded no earlier than 2005 (you can be a startup only so long, after all). We interviewed the founders and performed a reality check with the analyst community. But ultimately the choices were made by our panel of Editor-in-Chief Eric Knorr, Features and News Executive Editor Galen Gruman, Test Center Executive Editor Doug Dineley and Contributing Editor Bill Snyder.

And the winners are … * Aerohive Networks delivers a centrally managed wireless network built around a controllerless architecture that can scale to thousands of access points.

* Cohesive Flexible Technologies offers software that builds a base image of a server and reformats it into a chosen virtualization configuration without first building a physical server. * Earthmine produces a street-level image dataset with many times the information contained in images produced by competitors. * Montego Networks offers a hyperswitch (software plus firewall) that uses policy-based switching to route traffic to third-party security applications within the virtual network. * Perceptive Pixel injects light into acrylic forms as the basis for a breakthrough in touch-screen technology. * Ribbit provides a multiprotocol, Class 5, soft telephony switch with a development environment for business app integration. * StackSafe offers the first virtualized staging and testing solution that allows meaningful testing of infrastructure changes in a safe environment. * Vertica organizes data on disk as columns of values, as opposed to storing it as rows of tabular records, and in doing so speeds up analytic database access. * V-Kernel analyzes data collected on virtual machines and predicts future problems based on performance trends. * Xangati gathers information on all IP end points and applications by tapping into flow information from Cisco’s NetFlow, or similar protocols, to create behavioral profiles.