DragonWave’s biggest problem, in one graph

Dragonwave Graph

DragonWave reported its Q3 2017 results this week, and looking back year-over-year, it wasn’t good news.

The Kanata-based company, which provides packet microwave radio systems, brought in revenues of $10.2 million for the quarter ending November 30, 2016. This is compares to $21 million for the same period a year ago, and $47 million for the year before that. (All figures in USD)

This graph provides some insight into what’s been lacking in the Ottawa tech firm’s revenue streams over the past two years.

In a word, Nokia.

Communications giant Nokia has historically provided a significant portion of DragonWave’s revenue as an original equipment manufacturer (OEM) sales channel.

When Nokia acquired DragonWave competitor Alcatel-Lucent in late 2015, the relationship between the two companies became increasingly uncertain.

At first, DragonWave said it would continue to support and provide a few “legacy” products through the Nokia channel, but a year ago DragonWave CEO Peter Allen switched gears, saying the company would need to shift its marketing efforts away from the Nokia channel. That transition, he said at the time, has meant a loss of customers where Nokia now supplies partners through Alcatel-Lucent.

DragonWave’s restructuring has been primarily based around exploring new regional sales channels, especially outside of North America. The company hopes the development of 5G connectivity, on which DragonWave has partnered with Kanata-neighbour Mitel, will provide the right opportunity to return the company to the glory of its Nokia days.