ITAC Online - Digital Solutions - September 2012
In ITAliCs

Everything is Becoming Digital!

The Digital Revolution, which started with the development of computers in the 1950s, has had a significant impact on daily life. Take for instance, the impact of the Internet Protocol Suite which was invented in 1982 and by 1995 the Internet was open to anyone with access to the new technology albeit it slow access (remember the 56k modem!). Since then the speed of internet access and microprocessors has increased significantly so that the world's communication via the internet has grown exponentially.

Today we have a World Wide Web that is estimated to be at least 7.85 billion pages (www.worldwidewebsize.com) and it continues to grow as does it uses and the information it carries. Everything is becoming digital! Even mundane things like maps are digital. Google has already photographed the world to create the most comprehensive map ever seen and GPS maps have replaced the paper based maps everyone used to use for directions.

Our world is becoming increasingly digital in ways that could not be have been comprehended twenty years ago. The promise of the paperless society may yet be attained as everything from paying for goods and services to billing becomes digital. At the heart of this digital transformation is software. Software is what makes the hardware work and makes the digital world go round.

ITAC, as the voice of the ICT industry in Canada, is a prominent advocate for Canada's software companies. In this month's ITAC Online, we will take a look at two Canadian software companies: Redknee and bitHeads. Both companies develop unique software solutions for their customers and are achieving substantial success in doing so: Redknee recently launched the world's largest commercial interconnect system at Indosat in Asia Pacific and bitHeads has created software applications ranging from a firearms identification system that matches shell casings from crime scenes to individual firearms to a fun, blockbuster mobile game inspired by the movie classic, Jaws.

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The Swiss Army Knife of Converged Billing

Lucas Skoczkowski, Chief Executive Officer, Redknee

What do AT&T, Bakrie Telecom, Bintel Group, Cricket, Digicel Group, Far East Tone, Inmarsat, KPN Group, MTS, Orange Group, Safaricom, T-Mobile USA, Bell, Telefonica, O2 Group, and Vodafone Group have in common?

They all have Redknee!

And no, it is not some kind of telecommunications virus. Redknee (TSX:RKN) is a leading provider of next generation real-time converged billing, customer care and analytics software solutions. These solutions enable communication service providers (CSPs) to monetize the value of each subscriber transaction while personalizing the user experience to meet all market segment requirements across any communication platform, including mobile, landline, broadband, cable and satellite.

“Redknee is in the digital billing solution business,” said Lucas Skoczkowski, Redknee’s Chief Executive Officer. “Our converged billing is a comprehensive, fully integrated billing, rating, charging, and customer care solution that resolves some of the major challenges facing CSPs today.”

Redknee serves over 90 CSPs in more than 50 countries. These customers receive a comprehensive solution that goes from the point of sale to customer relationship management to collections for all transactions (social media, data, messaging, voice, etc.) This translates into:

  • Fast and easy launching of new marketing promotions while providing customer self-care options that give subscribers more control of their user experience.
  • Customized support for today’s ever-changing business models including entry into new markets, launching new brands or supporting Mobile Virtual Network Enabler (MVNE) or Mobile Virtual Network Operator (MVNO) models.
  • An ability to support any technology, service, and payment model at a low total cost of ownership with real-time analytics that can help increase subscriber usage, reduce subscriber churn and support cost.

Redknee has offices in Toronto, Spain, UK, Hong Kong, Lebanon, Australia and India and the focus of its team is producing software that simplifies and speeds up complex processes for its customers. For example, a Tier 1 North American operator wanted to accelerate its sub-brand and mobile virtual network enabler (MVNE) business quickly, using a low-risk strategy.

Redknee’s solution to this challenge was an out-of-the-box billing and customer care solution coupled with business intelligence and analytics that maximized average revenue per user (ARPU). It also enabled the hosting of multiple brands and mobile virtural network operators (MVNOs) available on-premise or cloud-based platforms. The business benefits included faster time to market for new brands, a low risk and low cost business and pay as you grow scalability.

Redknee also engages in alliances to provide effective solutions. For instance, it has a very successful strategic alliance with Microsoft. Its Turnkey Converged Billing solution is integrated with Microsoft Dynamics CRM and provides CSPs with flexibility on the solution architecture to best address their business needs. This combined solution provides a broader and more substantial set of capabilities to the telecoms market.

These types of solutions result from Redknee’s commitment to driving innovation through the development of patents for its R&D. Redknee’s R&D, which commands 20% of its annual revenues, is done in-house. The innovation that flows from this strategic activity is demonstrated by Redknee’s patents: To date, it has been awarded more than 30 patents and has more than 70 applications pending.

Although Redknee is still assessing the full impact of the recent changes to SR&ED tax credit, Lucas believes these changes will have an impact on R&D in Canada especially as the appreciation of the Canadian dollar has made it less competitive. There are, according to him, many other favourable R&D locations across the world which might present a viable option to bigger companies undertaking R&D in Canada. He firmly believes that the ecosystem for growing larger technology companies needs to be maintained in Canada by measures that nurture the industry as a whole.

Redknee, just like a Swiss knife, has varied solutions to meet its clients’ needs. This and the fact that it has high-growth market opportunities (continuing growth of 4G LTE adoption & IP data and a real-time worldwide billing industry that is expected to total $2.2B in 2015) has positioned it well for the future.

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Realizing Ideas Through Software

Scott Simpson, President, CEO and Co-founder, bitHeads

Seventeen years ago – October 1995 to be precise – three Ottawa entrepreneurs got together and started a company called “bitHeads” that delved in computer security hardware as a service company. However, it soon dawned upon the founders that they had the ability to build software from scratch.

“We realized that we would never be a body shop for our customers because we had the ability to be a soup to nuts development team that could work alone on a software solution or work with companies as a virtual extension of their R&D team, “ said Scott Simpson, President, CEO and Co-founder of bitHeads. “This was our “Aha” moment and we have never looked back since then.”

Since that seminal moment bitHeads has always had something to do and has built 500+ software products including:

  • A software application for a firearms identification system that matches shell casings from crime scenes to individual firearms.
  • The fun, blockbuster game inspired by the movie classic Jaws which is the #5 top paid iPhone game in major markets with over 1.6 million downloads.
  • Extending Fandango’s (the #1 movie ticketing mobile app) reach to mobile consumers by providing smartphone apps for watching trailers, looking up show times, and buying tickets.

Today bitHeads can, through its ProductStream™ methodology, overcome difficult software design and development problems to realize the ideas (written on napkins or in a more corporate brief) of its customers faster, cheaper and almost risk free.

This build-it-from-scratch approach has its own challenges but it’s very exciting and encompasses dealing with a product that only exists in the mind of the customer or an existing product that needs to be taken to the next level. This may be one of the reasons why bitHeads employees have, on average, been with the company for 10 years or more (of course, having a built-in cinema and a great working environment helps).  

The bitHeads team never thinks about one app in isolation as users don’t want to be constrained: They use an endless variety of hardware including smartphones, tablets, notebooks, desktops, game consoles etc. This is advantageous to bitHeads customers because it meets a user want head-on. And we all know that what the user wants, they usually get in the end. This is why bitHeads places lots of emphasis on creating eye-grabbing, “I must have it” user interfaces. It does this thanks to its wealth of hands-on knowledge derived from 17 years of user research coupled with an innate ability to gamify all of its products to deliver a more engaging user experience.

bitHeads is also concerned about the whole back-end experience. It has years of experience in designing and building some of the world’s largest-scale infrastructures for banks, telecom companies, and online game networks so it can quarterback complex, diverse infrastructures. Taking all of this to next level is bitHeads’ R&D which is usually in-house but can include some external consultants when needed. About 20% of its revenue is reinvested in R&D projects. The recent changes to SR&ED tax credit have made the credit less effective but, according Scott it is still good for what it does.

As for the future, it is all about the cloud for bitHeads. Scott is moving bitHeads in the direction of cloud-based software that connects games and other digital activities together on all platforms and multiple devices including mobile phones and game consoles like PS3. This software can either be fully licensable to bitHeads customers or be handed over to them completely. Projects are getting smaller as everything is going mobile but bitHeads is positioning itself as a producer of platform businesses that can still be developed and is applicable in many different areas where ideas need to be realized through software.

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WCIT 2012: A really Digital Event

The congress, scheduled for October 22 - 24, features a diverse range of speakers and panelists who will discuss everything from digital solutions to the role of social media in our daily lives to the ICT skills shortage to the power of technology to influence political, economic and social revolutions across the globe. It will be as fast-paced as the digital world and will focus on the theme of "ONE Vision for a Global Digital Society” and is expected to attract more than 100 high-profile speakers and attract up to 3,000 delegates from more than 80 countries.

The Congress will feature the following aspects for attendees:

  • An unrivalled perspective on the promise of the digital revolution delivered by an exciting line-up of inspiring "digital guru" keynote speakers.
  • Keynote panels of internationally recognized thinkers from government, industry and academia will debate strategies, discuss what leading innovators or countries are doing and reflect on how digital collaboration among stakeholders can deliver the promise of the digital age.
  • Intense breakout sessions, where delegates, speakers, moderators, representatives from the ICT industry, and stakeholders will share best practices and prioritize the output of the World Tech Jam.
  • Unique showcases of Canadian Innovations and Young Global Innovators, where presenters will demonstrate world-changing ideas and answer questions from the audience.
  • An online social platform that will connect thousands of delegates before, during, and after the conference.
  • Structured B2B meeting sessions aimed at renewing or developing multinational and cross-industry contacts and partnerships with executives and decision-makers from both developed and emerging economies.
  • The WITSA Global ICT Excellence Awards Ceremony, which will honour organizations that have achieved exceptional results in using ICT to benefit societies, governments, individuals, organizations, and the private sector.
  • Optional pre-conference activities and parallel events.
  • Unforgettable social events.
  • A closing ceremony where the Global Digital Society Action Plan will be unveiled and become a tool for policy development, educational curricula, corporate citizenship programs, and much more.

We look forward to seeing you there.

Did you know that WCIT 2012 will have an interactive Digital River that showcases Canadian ICT companies? If you want to learn more about the Digital River, please go here or contact Lynda Leonard, Senior Vice-President (leonard@itac.ca)

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Update: A Summer of Economic Consultations

Karen Atkinson Partner, Business Tax Services, Ernst & Young and Chair of the ITAC Tax and Finance Forum

There has been a flurry of submissions to Finance Canada throughout the summer regarding various aspects of the Federal 2012 Budget.  The Budget announced a broad array of changes to the SR&ED tax credit for R&D investment.  The legislation introducing these changes has been circulated for comment from interested parties by September 12. The Budget also raised concerns about third party tax filers for SR&ED claimants and has initiated a consultative process on that issue.  ITAC Tax and Finance Forum Chair Karen Atkinson will participate in the consultation later in September.

The Budget also expressed the Government’s intention to address the chronic shortage of venture capital in Canada with $400 million allocation.  ITAC’s submission on how this money should be used can be found here.  Finally, in preparation for Budget 2013, ITAC has filed a submission with Finance Canada regarding measures it would like to see put in place, which can be found here.  For further information please contact Lynda Leonard leonard@itac.ca.

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ITAC Events

October 11, 2012

ITAC 18th National Executive Forum

October 16 - 18, 2012

eHealth Risk Workshops

October 22 - 24, 2012

WCIT 2012 Montréal - The New ICT-Driven Society


ITAC Committees and Forums

September 20, 2012

Smart Regulation Forum

September 20, 2012

ITAC HR Forum: Employee Engagement and Employee Value Proposition

September 25, 2012

Cyber Security Forum - Ottawa


For a full list of events, and to register for ITAC events, visit itac.ca

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