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Accedian Networks tops Deloitte Fast 50 list

Ever hear of a "data tsunami"? It's what happened in 2009, when smartphone use exploded, flooding mobile networks with an explosion of video, game, and app downloads.

"Mobile operators weren't prepared for the massive increase of Internet traffic consuming bandwidth across their networks. Suddenly, cell phone users were experiencing all sorts of performance glitches, including slow speed, information loss and sound problems," recalls electrical engineer Patrick Ostiguy, a founder, president and chief executive officer of Accedian Networks Inc., a St. Laurent, Que.-based company that saw opportunity in trying to help mobile operators and telecom service providers cope.

In 2004, he and four other startup "geeks" holed up in Mr. Ostiguy's basement to design a prototype of a NID – a network interface device. The product boosts the performance of backhaul networks, the point between cell towers and central offices of mobile operators where the bottleneck takes place.

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After setting up a trade-show booth using cardboard signs they printed themselves, they attracted financial backing, and began to hawk their product.

The company has now become a top provider of performance assurance solutions for carrier Ethernet backhaul networks, with an installed base of over 75,000 cell sites across North America, and more than 90,000 platforms sold worldwide.

It has opened regional offices in the United States, Europe, Latin America, the Middle East and Asia. Accedian now has 200 customers in 36 countries and 140 employees worldwide. Forty per cent of its business is outside North America.

All of this has generated whopping revenue growth of 50,136 per cent over five years, earning Accedian the top spot on this year's 14th annual Deloitte Technology Fast 50 list of Canada's fastest-growing technology companies.

Accedian is a newcomer to the list, one of 20 that have never appeared before, but almost half of the previous winners are also back, including some old-timers that have made the list for up to five years running, notes Richard Lee, national leader of the technology, media and telecommunications industry group at Deloitte.

Second place goes to Cambridge, Ont.-based RTI Cryogenics Inc., which operates in recycling technologies and had five-year growth of 46,278 per cent; while the third spot is taken by Avigilon Corp., a Vancouver-based high-definition surveillance telecom company, with 38,796 per cent.

Rounding out the top five are Toronto-based NexJ Systems Inc., an enterprise CRM software company, with 29,161 per cent, and Real Matters Inc., a property information solutions firm based in Markham, Ont., with 28,265 per cent.

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For the full list, click here.

Although the average growth rate of a 2011 Fast 50 company was 5,020 per cent, down from more than 5,600 per cent last year, it is still the third-highest number ever, Mr. Lee says.

And Fast 50 companies are investing in their businesses, with average research and development spending hitting a new record, according to Deloitte.

"There's lots of innovation in the Canadian tech sector, and the list shines a spotlight on some of the best," Mr. Lee says.

Mr. Ostiguy says Accedian's meteoric five-year growth rate is simply a matter of being in the right place, at the right time, with the right product.

"For us, it's a bright spot in the economy. Right now, mobile operators are pouring cash into modernizing their backhaul networks," he says.

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To cope with tremendous smart-phone use, they need the latest and greatest improvements. "There is a huge incentive to provide customers with the best user experience because they will switch operators if the Internet is too slow," Mr. Ostiguy says.

Like many companies on the Fast 50 list, Accedian has been capitalizing on its success here in Canada by expanding into global markets. "It's a trend we've seen," Mr. Lee says. "This year's winners have met the current economic uncertainty with increased focus on an international customer base."

For Accedian, rippling outward has made perfect business sense from a timing perspective.

"We've been lucky that the first wave of modernization of mobile networks happened here. That allowed us to get a quick level of market share," Mr. Ostiguy says, adding that there are between three and four million towers around the world being converted over time to accommodate all the cell phone data, and Accedian wants them all to be equipped with its product.

To make sure it happens, the company has assembled an international sales force to step up global marketing.

At the same time, its hometown marketing team is hard at work telling the company story through media, including a YouTube animated video called NIDeo that explains, in cute and simple terms, the product's value to operators and users.

"We use video, blogs, webinars – media that can be sent over mobile phones in a sort of self-fulfilling prophecy," Mr. Ostiguy says. "We're drinking our own Kool-Aid to create a viral environment."

Wise use of social media is key for startups to spread the word and for established companies to continue to compete, Mr. Lee says.

But the trend in favour of public companies making the list has flipped, he says.

"Just three years ago, the public-private split was almost even, and now we've got only 11 public companies." The change reflects the difficulty of raising capital, he says.

In addition to the Fast 50 ranking, Deloitte's program also presents companies-to-watch awards for early-stage tech firms in business less than five years; leadership awards to companies that demonstrate technological leadership in four categories (which also went to Accedian this year) , and green awards to companies promoting a more efficient use of the earth's resources in industrial production and consumption.

Tech companies continue to thrive all over Canada, Mr. Lee says.

"It's a tribute to Canadian entrepreneurs' doggedness and ingenuity."

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