Sir Terry Matthews’ history lesson

Conpute, one of the top solution providers based in Oshawa, Ont., hosted a rare opportunity this week to meet and listen to Mitel Networks founder Sir Terry Matthews’ vision of the future of IP convergence. Instead the audience got a history lesson.

You see Matthews, besides starting Mitel

with Michael Cowpland in 1972 and NewBridge Networks in 1986 — not to mention 22 other technology and leisure companies — is an historian. And he is banking on history repeating itself.

Matthews has investmented more than $500 million to change Mitel’s products from TDM- to IP-based. He admits the company is losing money because of all this research and development spending. But he believes the industry is going through dramatic change and that there will be a system change based on broadband communications.

These changes, he said, are centred on low cost and open technology. Matthews cited the plunge in ADSL cable modem port cost in just four years: Back in 2001 it cost more than $1,000 a port for ADSL. Today Viet Nam pays $9 a port for the same technology.

This dramatic change in the technology history parallels what happened in the Victorian era of the 1840s. It was a time when companies long since forgotten were making huge profits moving goods on barges through canals. One of the more famous canals was located near Paddington Station, the major hub for products being sent to London.

By 1850 these businesses were in the process of building canals across the British Isles, Matthews said. But by 1860 all were bankrupt: Railroads were being built faster and cheaper.

“With canals you need clay beds, locks and water,” he explained. “It is a slow process. People could lay 10 miles of railroad track the same day. Railroads were able to ship products 100 per cent faster and with 100 per cent more payload.”

Railroads were also able to transport perishable items such as fish, milk, and livestock the same day. “Cities were created around railways and it all came down to low cost and fast,” Matthews said.

Funny enough, CP Rail lost Matthews’ first shipment of cordless electric lawnmowers. Mitel stands for Michael & Terry’s Lawnmowers. Because of this unfortunate accident Mitel worked around the clock on its touchtone receivers, which started the company’s move into information communications and technology business.

Matthews wants to be ready with the right products when this system change next occurs. His next step is to raise the profile of Mitel by increasing marketing efforts.

“Broadband networks are the same as railroads,” Matthews said. “IP broadband networks gives us lower costs and it is always on and always running.”But Mitel isn’t just betting on history to repeat itself. The company has also developed a communications software suite of applications that Matthews said will be meaningful to the user. He added that in the past the desktop consisted of a PC and telephone; historically they have been independent. “We are going to bring them together,” he said.

Mitel has partnered with Microsoft, or as Matthews puts it, Microsoft has partnered with Mitel. Microsoft Live Communications Server will be part of the Mitel suite.A sample of the type of communications that can be done with this solution is being done by retailer CompUSA today. In the past when a customer from Dallas called the local store and asks to speak with a printer specialist, the call was directed to a call centre.

With Mitel’s IP communications technology that customer is now directed to a specialist within the Dallas store. If that person is busy with a customer, the call would be directed to the next available in-store specialist even if that person is in another city. As a result, CompUSA shut down its call centre and saved a considerable amount of money.

If Matthews is right about history repeating itself he will make history, again.

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