It wasn�t just the solid-gold name. When Netscape founder and Internet cover boy Marc Andreessen launched a newfangled Web-hosting venture called Loudcloud, it smelled like a winner. Loudcloud raised nearly $200 million in venture capital before going public in March 2001 — a full year after the tech bubble burst. At its height, the company was valued at $489 million. Oh well. Business never took off, and in late June word came that computer-service giant EDS was picking up Loudcloud�s Web-hosting business for $63.5 million. Andreessen will stay on as chair of a scaled-down version of Loudcloud — a software company named Opsware. What does the wunderkind make of the new era? Wired caught up with him the day after the EDS deal closed to find out.
WIRED: Considering your hopes for Loudcloud, this must be a disappointment.
ANDREESSEN: You may have noticed this massive economic meltdown we�ve been going through. You have to pay attention to the market and to customers, and adapt. Being a software company is much easier to pull off than being a services company in the current environment. You�re always a little disappointed when the initial plans don�t work out, but when you have an opportunity, you roll with it.
What about Loudcloud�s investors? Does this deal shortchange them?
There�s no bankruptcy, no restructuring. Every investor remains intact. They now own shares of Opsware. Our stock went up on the news.
You started Netscape, which was swallowed up by AOL. Then Loudcloud, which is almost disappearing. What have you learned?
Half the job of an entrepreneur is telling the market what it wants. The other half is listening to what it wants. Nobody ever asked for a Mac or a Web browser. Once you do the product, then you have to listen. The market told Microsoft we don�t want tools, we want an operating system. It told Intel we don�t want memory chips, we want a microprocessor. When changes in the environment have been as cataclysmic as they have for the past three years, you have to adapt. When this deal closes, we�ll have $65 million in cash and no excess infrastructure. We�re resizing the company to be able to be profitable.
Have the dynamics of the technology industry changed since you started Netscape?
The cycles are endemic. It�s basic human psychology. You see it in real estate, stocks, junk bonds, the media industry, telecom. People get excited. That�s what causes them to invest, then they overinvest, then the boom collapses, and you look for the villains. This time it�s Ken Lay, Henry Blodget, Martha Stewart. It�s like a Shakespearean tragedy.
What�s next for the technology industry?
It�s rebuilding. You saw a very similar boom-bust-boom in the PC industry, which recovered in the 1990s as the technology hit critical mass. Intel shipped the 386, and Microsoft shipped Windows 3.0. The same thing will happen here. All of the technology underneath the Internet is hitting critical mass, at the exact point when people expect nothing. That�s a prescription for the next boom. But I don�t know when.
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