A series looking at the unique challenges facing Canada's midmarket companies and how they innovate, stay competitive and grow. In this piece: Accedian Networks Inc. helps telecoms boost network performance – but they've had to stay ahead of the technology curve to thrive
Patrick Ostiguy leans back in his chair and considers the trajectory his company, Accedian Networks Inc., has carved across the wireless communications spectrum in a decade since start up.
"We've really had growth all along, though there have been periods of more modest growth, but we've always been growing," he nods. It's an understatement.
Since he and four partners founded the company in his basement in 2004, Accedian has been on fast-growing company lists as of 2008. From 2008-2010, the company made it into the Branham Group Inc. tech consultancy's Branham 300 rankings of top tech companies by revenue. It hit the top spot on the annual Deloitte Technology Fast 50 list of Canada's fastest-growing tech companies in 2011, a list the company has stayed on since.
The privately held company declined to disclose revenues, but it says they posted a 25- to 30-per-cent growth this year.
Based in the Montreal borough of Saint-Laurent, the company provides wireless service operators with technology to control and shape the performance of their networks, regardless of which big vendor, such as Ericsson or Cisco, is driving their platforms.
Whether it's passing the time watching a soap opera while commuting in Asia, or watching World Cup soccer, audiences are demanding higher performance delivery of content from their mobile operators, says Mark Goldberg, a Toronto-area telecommunications consultant.
Companies such as Accedian "turbo charge the mobile operator's network," he says.
"It's about the customer experience and that's where networks are competing."
It's a high-growth area, as customers demand seamless and high-speed network capability. This year alone Accedian is on track to double its global installations of performance-boosting technology, with sales into Asia, Latin America and Europe.
"All our growth has been organic," he adds, "There was just one acquisition, a small company with dismal sales we acquired in 2011 but they had a partnership with Ericsson which gave us entry into a market."
How does a midsize company with about 200 people stretched across four continents with 350 customers in 58 countries achieve this kind of growth at such a relatively early stage of development?
The key is two-fold, Mr. Ostiguy says. One is picking the right people and the other is staying ahead of the technology curve.
For recruiting, the network of clients and partners played a partial role, Mr. Ostiguy says, because they were able to identify key people and spread the word about job opportunities at the company.
As for the technology, when they launched a decade ago, it was crude by comparison with what's on offer today.
"We've tried to keep ahead of the curve and that has served us well, and we think there's much more growth to come in this market," Mr. Ostiguy says.
Even as big companies such as Cisco and Alcatel, and some mobile operators, struggle, they all have to stay competitive and Accedian's offering hits that sweet spot, tweaking networks on the fly using a virtual console system to enhance performance.
"Despite some of the big [companies] having difficulty right now, when you have a differentiating story like we do and you provide an overlay to clients which is agnostic to whatever vendor they are using, you can help them make a difference. It's what we've done all along."
He also acknowledges federal programs like the federal Industrial Research Assistance Program (IRAP) and Scientific Research and Experimental Development (SR&ED) tax credit programs with getting Accedian off to a smooth start.
"I remember going to meet the guy for the IRAP program at the local Tim Hortons because we were still in my basement," Mr. Ostiguy laughs. "But those programs were absolutely substantive and material. You can't do everything in bootstrap mode. You have to buy lab equipment and get critical mass to get engineers to get moving. It's harder here to raise venture capital because there just isn't much of it compared to the U.S."
Relationships are also important over the long term, he says, pointing to Colt Technology Services Group Ltd., a European data and network provider which was among the first to sign on.
"Today they are still a very big customer," he says.
Helping the company's clients maintain their competitive edge has put Accedian at the front lines of the mobile services war.
"It has changed because it's not about coverage any more. They all have coverage at least in the urban centres," he says. "It's not about the phones because everyone has access to the same handsets. People have choice so they have two ways to fight and that's marketing and sales plans or in the performance of their network."
Accedian also has a front-row seat on getting a look at what's coming next to this part of the world, because places such as Asia are so far ahead in the mobile space. This helps the company understand the needs of its mobile-service customers, and also understand the subtle differences of each geographic market.
In a war, though, he adds, it's important not to pick sides.
"We're like Switzerland, neutral," he laughs. "Our approach is to monitor, assure and optimize performance end-to-end, regardless of vendor. We're not competing against the Alcatels and Ciscos. Our biggest competition is probably within the management of the clients themselves because they may have systems they've grown internally."
With three rounds of financing in place and strong revenues, he says, the next obvious step for a company their size is an IPO, but there's no rush, Mr. Ostiguy says.
"We had our C round in 2010 so it's been a while and we're profitable," he says. "The next financial round would have to be an IPO but the timing would have to be right and things would have to be stable."