Life after Nortel

OTTAWA – Don Sylvester wants Nortel Networks to succeed. He really does. But in the meantime, he sees a positive spin-off effect of the current economic downturn ravaging the former telecommunications giant.

Sylvester, CEO of Network

Planning Systems (NPS), says as Nortel continues to cut jobs, more and more highly skilled and trained people will be looking for opportunities to do something new. He and other former Nortel employees formed NPS in 1999.

“”I do believe that the challenges Nortel’s been going through and the way that Nortel has been forced to disgorge people into the marketplace has fundamentally enlivened the entrepreneurial nature of the Ottawa marketplace,”” says Sylvester.

This burgeoning do-it-yourself spirit was demonstrated earlier this week at the Sixth Annual Ottawa Venture Capital Fair. With more than 100 venture capitalists representing almost $20.5 billion in available funding, experts say Ottawa’s startups have a lot to be optimistic about.

NPS was one of a handful of Nortel spinouts vying for investment at this year’s event. Sylvester says his company offers software, originally developed at Nortel, to optimize network decisions and achieve maximum performance with minimum operating and capital requirements.

He says Nortel was an excellent source for technology ideas and experience.

“”One of the things I’ve found interesting is the level of professionalism that is inculcated into individuals when they work with a professional company like Nortel,”” he says. “”That level of professionalism, translated to a new job, dramatically increases the chances of success.””

Sylvester says NPS has benefited, particularly from a sales and marketing perspective, from contacts made while he and other NPS employees were at Nortel.

“”Knowing the landscape that you’re working in and understanding who the contacts are is really important. It helps you open doors and shortens the sales cycle.””

Stephen Goodman of Ottawa-based startup Seaway Networks Inc. agrees. “”The number one thing for any company that’s growing at this point is customer traction,”” he says. “”And customer traction is not about mass marketing and advertising when you’re a startup. It’s all about relationship development.””

The president, chief technology officer and many of the key engineers at Seaway are all former Nortel employees.

Seaway has engineered a semiconductor chip – originally commissioned by Nortel – that scans data passing through networks in real time. The function allows network operators to see how individual users gobble up bandwidth. Goodman says Nortel would have axed the semiconductor project had Seaway not negotiated the rights to the technology.

“”The founders of Seaway had this idea of wanting to promote a business around what they were working on in Nortel – a technology which they felt seemed to be at risk,”” says Goodman.

As for the economic downturn, Goodman is optimistic about his company’s chances.

“”For us, the timing is great. We know we’re developing something which other people aren’t at this time because of the market,”” he says.

David Cork, CEO of Natural Convergence, another Nortel offspring competing for investment in Ottawa, also believes his company can survive in the current economic climate. Natural Convergence makes what are called virtual key System voice applications for telecom service providers.

Like Seaway and NPS, Natural Convergence benefits from the expertise gained at Nortel, specifically through contacts and exposure to technology.

And like Sylvester and Goodman, Cork is confident Ottawa will continue to see promising startup activity, despite the Nortel collapse.

“”With Silicon Valley, all of the big companies like Intel started when Fairchild Semiconductor blew apart,”” he said. “”I’m not suggesting Nortel’s blowing apart, but they’re certainly feeding a lot of capability here.””

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