Beltway Money Man: Jonathan Silver

Venture capitalist Jonathan Silver doesn’t claim to be a political savant. Will Democrats gain the upper hand this November? “Whatever I tell you,” he says with a laugh, “go the other way.”

But Silver, managing director of Washington’s Core Capital Partners, isn’t so modest when it comes to making calls on the outlook for technology spending and Uncle Sam’s IT budgets.

Silver acknowledges the possibility of a slowdown for some government contracting but says spending levels won’t fall below where they were five years ago. “The federal government is going to spend considerable dollars on technology for a long, long time to come,” he says.

Full story at Forbes.com

Check Point Software: Battle Hardened

WASHINGTON, D.C. – He may be an American, but Jerry Ungerman displays Israeli-style stoicism when it comes to the effects of war on his company, Check Point Software Technologies. The developer of computer security software has 600 employees in its hometown of Tel Aviv.

“It’s an unfortunate part of life,” says Ungerman, Check Point’s vice chairman, of Israel’s war with Hezbollah. “There’s been no impact on our operations.”

Indeed, he describes the effect of the call-up of Israeli army reservists from Check Point’s employee ranks as nearly indistinguishable from people taking their summer vacation. And the rocket attacks? For folks in Tel Aviv, he suggests, it’s like being in downtown San Francisco and hearing that a rocket has fallen on Lake Tahoe.

Tough talk? Maybe. But an ability to shrug off adversity is valuable in Check Point’s line of work. In recent months, the company has faced its share of proverbial rockets from Wall Street and Washington alike.

Full story at Forbes.com

Stock Picks From The Best Overseas Biz Climes

WASHINGTON, D.C. – For the past several years, we’ve used data from the International Finance Corp., the private sector arm of the World Bank, as a starting point for an international stock search. We’ve had moderate success with the approach, so we’re giving it another go.

The data in question comes from the IFC’s annual “Doing Business” study, which measures how easy it is to do business in a particular country. Namely, the survey quantifies the time and costs involved in starting a business, dealing with licenses, employing workers, registering property, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and closing a business.

This morning, the IFC releases “Doing Business in 2007: How to Reform,” which ranks 175 countries in those categories. The survey, for which the IFC surveyed 5,000 local experts, is a treasure trove of information for Beltway wonks, especially those interested in how red tape affects developing economies.

Full story at Forbes.com

Buying Opportunity In Government Tech

WASHINGTON, D.C. – SRA International, a tech services and consulting concern in Fairfax, Va., has twice graced our annual list of America’s Best Mid-Caps. But making that elite cut hasn’t protected the company’s stock price, down 21% over a one-year period.

The dip may be an investment opportunity.

What’s bothering SRA International’s stock? Among other factors, explains A.G. Edwards analyst Mark C. Jordan, the high cost of waging war in Iraq and Afghanistan has created uncertainty and delay, which is affecting spending on the information technology services that SRA provides: designing, managing and protecting networks for government agencies. The company does just under three-fifths of its business with national security customers, 32% with civilian government agencies and 9% in health care, along with a smattering of commercial work.

Full story at Forbes.com

In The Surveillance Sweet Spot

WASHINGTON, D.C. – Christopher Gettings, chief executive of Chantilly, Va.’s, VideoNext, has his full share of an entrepreneur’s most important asset: pluck.

“My confidence in what we’re doing is phenomenal,” says Gettings, 43.

VideoNext’s 28 employees develop software that displays the images and stores data drawn from video cameras (analog and digital), sensors and the like. The company’s product turns a PC into a command center, complete with virtual joystick, allowing the user to track multiple views from multiple security cameras on a Web-browser-type application. On the back end, the company asserts, the software can analyze the images and data to help the user to distinguish animals from people, track vehicle speed and measure crowd density, among other functions.

The software looks timely, given public and private sector fixation on security, as well as large-scale and data-rich government initiatives in physical access and radio frequency identification. Indeed, VideoNext’s customers hail mostly from big government agencies and the U.S. military. Gettings is mum on his top line, allowing only that the company broke even on sales somewhere between $1 million and $10 million.

Full story at Forbes.com

Software Lobbyists Think Global, Act Global

WASHINGTON, D.C. – Just prior to Congress’s August recess exit, the Business Software Alliance notched a few legislative victories. One was the Senate’s ratification of the Council of Europe Convention on Cybercrime. The other was the introduction of a patent reform bill similar to House legislation meeting with BSA approval.

But for BSA–a technology trade group representing the likes of Apple Computer, Microsoft and SAP–a truly noteworthy moment came a year ago last summer. Then, BSA chief Robert Holleyman had one of the more pleasant encounters that a Beltway lobbyist can hope for.

Full story at Forbes.com

Terrorist’s Loss, Consultant’s Gain

WASHINGTON D.C. – A new study from the National Association of Manufacturers describes the “substantial collateral benefits” realized by a handful of companies in their efforts to harden their supply chains against the threats of terrorism, natural disaster and energy shortages.

“This does seem to suggest that we ought not look at investments in global security on one hand as separate from investments in business performance,” said Jerry Jasinowski, president of the Manufacturing Institute, NAM’s research arm, at a press event on Tuesday at the association’s Washington headquarters. Flanking Jasinowski were executives from Dow Chemical, a participant in the study, and IBM, its sponsor.

That message will delight certain government officials. Since the Sept. 11, 2001, terrorist attacks, regulators at U.S. Customs and Border Protection and elsewhere have strained to convince the business community that security measures can coexist with, even enhance, the free flow of commerce. “This is really an outstanding piece of work,” said Michael C. Mullen, director of the Department of Homeland Security’s Office of Policy and Planning, of the study.

Another group that will cheer the survey: technology hardware and services outfits such as IBM, Motorola and Unisys. As the government has pushed its post-9/11 trade security initiatives–among them the Customs-Trade Partnership Against Terrorism and the Container Security Initiative–these companies have moved in to pick up related business.

Full story at Forbes.com

Weighing SafeNet’s Dangers

WASHINGTON, D.C. – A wary analyst community awaits SafeNet’s second-quarter financial results, set for release Wednesday evening. The last four earnings announcements from the Belcamp, Md., information security concern have fallen short of Wall Street expectations, and at a recent $15, the stock has lost three-fifths of its value since a high set in October.

Adding to the gloom: the overhang of an investigation by the Securities and Exchange Commission into SafeNet’s stock option grants. The company got a related subpoena last May.

With the slide in its stock price, SafeNet’s $364 million market value is now well below its book value, while its price-to-sales multiple is 1.4. The North American technology sector as a whole goes for 1.6 times revenues. Contrarian investors, particularly those interested in government contracting plays, may want to take a gamble on this beaten-up stock.

Full story at Forbes.com

Generating Hydrogen, Battling Earmarks

WASHINGTON, D.C. – It’s been a busy week on Capitol Hill for those interested in hydrogen as an energy source.

On Thursday, the U.S. Fuel Cell Council, an industry group, holds its annual Congressional expo, complete with a caucus room full of company exhibits and rides in hydrogen-powered vehicles.

The Senate Committee on Energy and Natural Resources heard testimony on Monday from Chevron and General Motors execs on the implementation of the hydrogen and fuel cell provision of last year’s Energy Policy Act.

“We still need major technological advances to ensure hydrogen can be affordable, safe, cleanly produced and readily distributed,” said Sen. Lamar Alexander, R-Tenn., at the Monday hearing.

Just across the river in Alexandria, Va., H2Gen Innovations’ 40 employees are advancing all those goals. The company’s tale illustrates both the promise of the hydrogen economy and the hazards involved when the feds turn to the private sector for research and development.

Full story at Forbes.com

Israel’s War Discount

WASHINGTON, D.C. – Feeling contrarian and in the mood to bargain hunt? Go for U.S.-listed shares of Israeli companies. The accompanying table lists a few notables.

We’re not downplaying the present difficulties in the Middle East. In fact, we’ve heard firsthand of nervousness among Israelis and the multiple threats to the country’s economy: people staying close to home or in bomb shelters, a sluggish tourism industry and the disruption of port activity in Haifa.

Full story at Forbes.com