Wireless companies are focused on building solid businesses, products: OWC

The chair of the Ottawa Wireless Cluster (OWC) Neil Knudsen says he wasn’t surprised by the results of a survey of the Ottawa wireless industry last month which showed wireless companies in the nation’s capital are more intent on building their customer base and expanding their sales and marketing teams than they are on pursuing venture capital or government funding. "I think the findings seem to go counter intuitive to what everyone talks about," Knudsen tells Report on Wireless. The OWC’s survey was conducted in conjunction with the Ottawa Centre for Research and Innovation and the Canadian Association of Management Consultants. Nearly 60% of the companies surveyed said venture capital and angel funding were not important priorities for their businesses this coming year, while only 29% said they were important; and 55% said government financial assistance was not important, while 30% said it was. When rating priorities on a scale of one to five, equity financing and government funding scored an average of 2.4, while developing new markets and improving sales and marketing teams both averaged 3.5. Knudsen, however, says these results are only surprising to some because they go against the prevailing attitudes regarding the industry. "If you talk with some people or if you read the local business press they seem to be obsessed with this idea of funding and how much funding are people getting," he says. "Whenever you talk about high technology in Ottawa…that seems to be the predominant focus." As for the results of the survey, Knudsen says one reason for the response could be that wireless companies are just having a hard time getting their hands on any money. "The image people have from five or six years ago that you can have a few ideas on a cocktail napkin and walk away with five million bucks, that’s just not going to happen," he says. Instead, Knudsen says companies are more focused on building solid businesses with actual clients first to mitigate the risk to investors. Of course, the OWC chair bases his opinion on anecdotal evidence. To flesh out the actual answers he says the OWC plans a follow-up in which it will ask companies specifically about their answers. The responses, as well as more comparative analysis of the survey results and insight into anticipated activity for Ottawa wireless companies, will be released in a report this fall. The value of the survey, says Knudsen, is to help the wireless industry in Ottawa by publicizing the fact that it’s well-established and still growing. A third of the companies (36%) that responded to the survey have been in business for more than 10 years and 17% have been operational for five to 10 years; 19% of respondents employ more than 200 people and 23% employ between 50 and 199; and 31% of responding companies total more than $10 million in annual revenues. Almost half (48%) of companies are working on software-hardware combinations, 22% developing software only and 19% developing hosted applications. Knudsen compares Ottawa’s wireless industry to Vancouver’s, which started around a couple of major firms and has spun off many smaller companies. He says that a few years ago most wireless companies in Ottawa were basically focused on the satellite companies or Nortel Networks Corp. and now people are going off in different directions.

Wireless companies are focused on building solid businesses, products: OWC

News | July 14, 2006

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