Defining moment for Ottawa's SDN sector: Local firms making waves in field poised for explosive growth

David
David Sali
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Among the three local firms on Deloitte’s annual Canadian Companies to Watch list released in November is one that garners few headlines but is ready to make a big splash.

Corsa Technology co-founder and CEO Bruce Gregory sees a bright future for his SDN firm in what is projected to be a $100-billion market.

Kanata-based Corsa Technology specializes in making hardware for the rapidly growing but obscure field of programmable Internet networks known as software-defined networking.

“For us, it’s recognition that we’re really innovating, but being successful at the same time,” says Corsa’s CEO and co-founder Bruce Gregory. “There’s a lot of innovative stuff going on that often doesn’t get commercialized.”

Two other Ottawa-area companies also made the Deloitte list, which recognizes early-stage tech firms that show high potential for growth. But Klipfolio and You.i TV have already worked their way into the public consciousness, thanks in part to big-name wins such as You.i’s deal with Rogers and Shaw to produce the user interface for the Shomi on-demand video platform.

Meanwhile, Corsa has raised more than $20 million in equity financing since it was founded three years ago, all with virtually no fanfare. Launched by tech veterans Mr. Gregory, Yatish Kumar, Carolyn Raab and Steve Yee, the company has assembled an impressive management group to lead its rapidly growing staff of 40 employees.

Its top executives rarely seek the media spotlight, which is partly why Corsa tends to fly under the radar.

But a bigger reason is probably the market it serves. SDN is a sector on the verge of explosive growth – industry news site SDxCentral issued a report last year projecting it will be a $100-billion global market by 2020 but most Canadians have likely never heard of it. Corsa’s customers are not household names like Rogers but rather little-known entities such as ESnet, the U.S. Department of Energy’s dedicated network to support scientific research.

Make no mistake, however: the young Kanata startup is a firm on the rise in a field many experts say is revolutionizing Internet data flow. Thanks to SDN, network traffic is increasingly being regulated by technology instead of people, allowing glitches to be repaired much more quickly and cheaply and speeding up installation times for new services.

Still, Mr. Gregory says it’s “very early in the cycle” for SDN, and Corsa’s suite of four products, known in the industry as data planes, is rapidly making it a market leader.

“It’s a global business and we operate on a global level,” he says, noting he travels to Europe or Asia on business almost every month. “The entire ecosystem has to come together because what we’re doing across the network is so different. We’re putting together an entirely new network architecture, but there isn’t any one company that owns all the pieces. Nobody’s going to rip out the Internet and replace it. Everything we do has to fit into an existing network.”

He describes Corsa’s revenues as “really healthy,” adding the firm is just scratching the surface of its potential.

“For us right now, it’s all about securing the really important networks and the really important customers and growing with them over the next two, three, five years,” he says. “For a small company, we’ve made a lot of noise since we’ve started and we’ve had a lot of success.”

Corsa is just one of the trail-blazing new firms that has already helped Ottawa forge a reputation as Canada’s leading SDN hub.

Buoyed by the National Capital Region’s strong network-building legacy, access to an elite talent base and government-sponsored agencies including Kanata’s Centre of Excellence in Next Generation Networks, companies such as CENX and BTI Systems are among others making a name for themselves in the space.

“Ottawa is a pretty strong region as far as operating networks,” says Andrew McDonald, senior vice-president of core products at CENX. “There have been some great technology companies that have been very telecom network-focused here.”

Though the company has offices in five countries, about three-quarters of CENX’s 200 employees work at its research and development department in Centretown. They design software that gives clients a big-picture look at information from routers and switchers, making it easier to isolate faults and allowing networks to run more efficiently.

The firm’s revenues skyrocketed by more than 4,300 per cent between 2011 and 2014. That blistering pace of growth ranked it 18th among North American companies on Deloitte’s 2015 Technology Fast 500 list.

Mr. McDonald credits much of that success to CENX’s Ottawa workforce, noting the wealth of experienced engineers and programmers nurtured at the likes of Nortel and its many spinoffs has given the region an edge over other would-be SDN hotbeds.

“If I look at some of the staff that have come out of some of those (legacy companies), it’s pretty clear that there’s a lot of telecom networking talent in the city,” Mr. McDonald says. “There are a lot of companies here today because of those initial engineering talent pools. It’s one of the reasons why we’re here for sure.”

Mr. Gregory is equally effusive in his praise of local talent, calling Corsa’s current crew of engineers the best with whom he’s ever worked. And while a 70-cent loonie might have many snowbirds and importers north of the border groaning, he says it makes the city a more cost-effective R&D option for companies that earn most of their money in U.S. currency.

“The dollar works for us right now when we’re competing for talent,” he says.

Ottawa tech workers also tend to be more loyal than their California counterparts, Mr. Gregory adds.

“In Silicon Valley, retaining talent is really difficult because there’s so much competition for engineers,” he says. “If you bring a person in and you’re able to keep them for a year, you almost feel lucky that you had them for a year. That’s not an issue in Ottawa right now. If you create an environment that’s challenging and exciting to work in, people will come and work with you and they want to see it through right to the end. They want to build a big company.”

The city’s universities and colleges are laying the groundwork for the next generation of networking innovators by graduating top-tier engineers with skills particularly well-suited to SDN, says Peter Landon, director of product architecture at BTI Systems.  

“Ottawa’s unique because it has a lot of the educational institutions that are really pushing the new networking control with SDN,” he says. “The fact that Ottawa’s got all of the good schools does give us a lot of opportunity to tap into not only good engineering talent, but also some of the new methodologies that are being used in networking.”

With 150 employees at its Kanata headquarters, BTI is one of the larger SDN-focused firms with a major local footprint. California-based Juniper Networks, which also makes SDN software, announced in late January it was acquiring the company, adding it plans to continue operating BTI’s Ottawa office as a separate subsidiary.

BTI and Juniper are among the membership of CENGN, a consortium of more than a dozen tech companies, telecom providers and economic agencies that finances research and development in emerging fields such as SDN and the Internet of Things. Other members include Alcatel-Lucent, Invest Ottawa, Rogers and Telus.

CENGN’s members collaborate with corporate partners to solve problems and refine technology. For example, BTI and Corsa recently worked together on a proof-of-concept demonstration that showed networks under SDN control can effectively expand their bandwidth to accommodate “elephant flows,” or unexpected surges in Internet traffic. Gatineau’s Inocybe Technologies, another key local player in the SDN sector, also took part in the project.

“It’s really useful, especially for a smaller company that’s building their business in this space, to get access to a whole bunch of different products and work together to build solutions,” says Mr. McDonald.

“I think of (CENGN) as a catalyst. What they’ve been able to do is bring folks in this space together to look at different opportunities to collaborate. That gives us the ability to do some prototyping, looking at some future ways of doing work together that maybe we wouldn’t have done otherwise.”

Mr. Gregory agrees.

“To a company like Corsa to get access to that network and that level of integration would’ve been prohibitively expensive for us to do on our own,” he explains. “We get more understanding of the world that we’re building into. It provides a real service that way.”

CENGN’s goal, says president and CEO Ritch Dusome, is to help more quickly bring to market new technology in rapidly evolving sectors such as SDN by proving it works. He believes SDN could be the next big thing driving tech-sector growth in Ottawa.

“We’ve think we’ve got the right formula,” says Mr. Dusome, a 20-year industry veteran who spent time at Bell and another CENGN member, Cisco Systems. “Are we going to replace Nortel? Probably not, but it all starts somewhere.

“I would say that there’s no leader (in SDN) that’s evident right now, except for Silicon Valley. We have a chance. We’re not behind, but we’re not quite leading just yet. I’m hoping I can do my little part to feed this ecosystem so that that does happen.”

However, others in the industry caution that CENGN alone isn’t enough to keep Ottawa ahead of the curve when it comes to emerging technologies.

“It’s a really interesting example of what we can do when we put our minds to it,” Mr. Gregory says. “I think we need to do an awful lot more.”

Organizations: Corsa Technology, ESnet, U.S. Department of Energy BTI Systems Nortel North American Juniper Networks Alcatel-Lucent Telus Bell Cisco Systems

Geographic location: Ottawa, California, Kanata Europe Asia Canada National Capital Region Silicon Valley Centretown U.S.

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