Bridgewater looks to expand product development, sales activities, professional services

Bridgewater Systems Corp. is hoping that an initial public offering (IPO) will give it the financial resources it requires to expand product development activities, sales operations and a professional services or consulting organization (below is a break down of funding allocation for each activity). The company filed its preliminary prospectus with Canadian securities regulators last week. It's not yet know how much money Bridgewater expects to generate from the IPO as the final prospectus has not been filed. The Ottawa-based wireless technology firm has already got some high-profile clients, including Verizon Wireless, Sprint Nextel Corp., Metro PCS Wireless Inc., Bell Mobility and others. These wireless operators use Bridgewater's software to control how subscribers access networks, content and applications. Highlighting Verizon's use of its technology, the company states in its prospectus that its software authenticates the subscriber's network access, verifies that the content selected is appropriate for that particular subscriber, ensures that the network and the subscriber's device can send and receive the content, and finally, determines that the subscriber can pay for the content regardless of billing model.Success at Bridgewater has been driven primarily by the huge adoption of mobile data services as this has required mobile operators to implement technologies to control subscriber access to content and applications. The company estimates that 65% of global CDMA subscribers "are authorized" on its AAA solution - authentication, authorization and accounting. Growth of mobile data and skyrocketing global net additions have presented challenges to the service providers, though. "Specifically, service providers are faced with increased complexity owing to customer information silos, disparate network infrastructures and a wide range of third-party content and applications, exacerbated by the growth in the number of subscribers and subscriber transactions," states the prospectus. But Bridgewater notes it can make this "relationship" easier to deal with. "Our highly scalable software solutions enable service providers to efficiently manage these challenges in high transaction rate, carrier-grade networks, including wireless, wireline and converged networks," the IPO indicates. Convergence across networks, where a single device can access content and applications using different networks, is another area where the company believes it can help service providers. "Subscribers now expect to be able to roam between service provider networks featuring different technology standards, including wide area and local area wireless networks," reads the IPO document. "Our products also address this consumer trend by enabling subscriber roaming between technologies and service providers." In a rapidly evolving sector such as telecommunications, the company needs to continue to innovate if it is to remain successful. In addition to growing organically through increased penetration in existing markets, Bridgewater plans to further develop its subscriber authentication software with key customers. One area in which the company is experimenting is developing a new product that integrates its software with a hardware platform, optimized for performance, scalability and ease of management. "This turnkey business model is intended to offer our customers an integrated platform, together with network design, support and dimensioning services, that will allow operators to more easily manage and scale their networks as they launch new applications and services," reads the prospectus. Despite the seemingly optimistic market opportunity for the Ottawa-based company, Bridgewater faces some stiff opposition in a number of areas - rivals that aren't trivial. On the network access front, large telecommunications companies such as Cisco Systems Inc., Nokia Siemens Networks, Juniper Networks Inc. and Ericsson LM as well as some smaller independent software vendors are the main competitors. Entitlement and policy management is also a stiff market with Juniper and Ericsson being the big competition. Allocation of net proceeds from the IPOAbout 10% to 15% is to expand professional services capability, which includes consulting services, customer solution design and development, configuration and deployment servicesApproximately 20% to 25% is to extend the product portfolio by accelerating the development of new products and services, including a turnkey product offering, and targeted licensing of third party solutionsAbout 15% to 20% is to expand the sales and marketing activities into new marketsRemaining funds will be allocated to working capital and selective acquisitions or investments in new products, technologies and businesses

Bridgewater looks to expand product development, sales activities, professional services

News | November 14, 2007

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