Rid­ing the back­haul wave

Ottawa Business Journal - Techopia - - Mobile Internet - WRIT­TEN BY EL­IZ­A­BETH HOW­ELL PHO­TOG­RA­PHY BY MARK HOLLERON

B uried in dense fog, a Vik­ing ship is de­picted sail­ing across a rolling ocean in a mu­ral just out­side the main en­trance of DragonWave’s Leggett Drive of­fice.

It’s a sou­venir of the tech­nol­ogy com­pany’s ge­n­e­sis in the early 2000s, when the up­start firm saw it­self as a gang of “ma­raud­ers,” ac­cord­ing to chief ex­ec­u­tive Peter Allen.

“ We were one of the chal­leng­ing (com­pa­nies) in­vad­ing the in­cum­bents’ ter­ri­tory,” said Mr. Allen of the early days.

Al­though Mr. Allen isn’t at all Scan­di­na­vian and wasn’t there at the time, he has helped carry that spirit for­ward as the com­pany – which pow­ers mo­bile wire­less net­works – fought through a some­what frothy 2010.

All was rosy that Jan­uary, when DragonWave raised its out­look as third-quar­ter sales jumped 421 per cent to $55.82 mil­lion from $10.7 mil­lion.

But 82 per cent of that growth came from a sin­gle cus­tomer: Clearwire, a wire­less broad­band ser­vice provider based in Vir­ginia.

The vul­ner­a­bil­ity was noted by sev­eral an­a­lysts, but be­came clearer later in the year when Clearwire de­layed the roll­out of its nextgen­er­a­tion net­work. That took DragonWave’s rev­enues down with it as the mi­crowave back­haul provider scram­bled to sign new cus­tomers in the in­terim.

In the third quar­ter alone, DragonWave cut its rev­enue guid­ance 10 per cent to $27 mil­lion as Clearwire slashed spend­ing.

“ We had this re­ally good re­la­tion­ship with Clearwire, and who wouldn’t want that?” Mr. Allen said.

“But at the same time, it’s an ex­po­sure, right? Be­cause you have a lot of rev­enue tied up with one cus­tomer. So of course we’re try­ing to win as many other cus­tomers as pos­si­ble.”

Part of DragonWave’s road map for growth in 2011 in­cludes “di­gestible merg­ers and ac­qui­si­tions,” of­fi­cials say – es­sen­tially tar­get­ing a com­pany with com­ple­men­tary tech­nol­ogy and prod­ucts, and ide­ally one with cus­tomers, con­tacts and a pos­i­tive cash flow. Then, snap­ping it up.

In­vestors got a pre­view of this in Oc­to­ber,

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