Shopify, Alcatel-Lucent provide memorable week for Ottawa tech landscape

The week of April 12 provided both excitement and stability for the Ottawa tech scene, according to one marketing strategist.

In fact, Francis Moran said Shopify’s announcement April 14 that it was planning an initial public offering is “the most exciting news in Ottawa’s tech sector in five, 10, 15 years, certainly in the last five to 10 years.”

One of the reasons, Mr. Moran said, is because the wealth created through the initial public offering will stay in Ottawa.

“The team that runs Shopify are deeply committed to that city,” he said. “They live there, they’ve made their lives there, they intend to continue living their lives there.”

The company said it hopes to raise $100 million, but with that influx of capital comes the new challenge of operating a publicly traded company, said Mr. Moran.

“Your timing horizon tends to get a little shortened. You can find yourself responding to very noisy activist investors who may not like what you’re doing,” he said.

But Mr. Moran said with the e-commerce juggernaut valued at more than $1 billion and the IPO expected to be worth just under 10 per cent of that, going public shouldn’t alter the game plan of CEO Tobias Lütke and company.

“It sounds to me like they’re still hanging on to more than enough to allow them to pursue their strategy,” he said.

While Shopify provided the excitement, Nokia provided the stability when it announced on April 15 that it will acquire Alcatel-Lucent in a deal worth $16.5 billion.

“At one time in the last year or two, Alcatel-Lucent was the most shorted stock on European stock markets and a lot of people were ready to write it off,” Mr. Moran said. “Bankruptcy seemed to be the likeliest outcome for Alcatel-Lucent.”

While Nokia CEO Rajeev Suri said he hoped to trim costs by $971 million with the deal, Mr. Moran said those cuts likely won’t include any of the 2,300 workers at Alcatel-Lucent’s Kanata office, noting they were mostly spared in recent rounds of layoffs.

“I can only assume that if they were spared, it meant the technology programs that were being developed, the technology that was being built in Kanata was integral to the network-centric core business of Alcatel-Lucent,” he said.

Kanata North BIA executive director Jenna Sudds agreed. Alcatel-Lucent was one of 36 companies recruiting new talent at a job fair her group organized last week at the Brookstreet Hotel.

“This is really the nucleus, the brains of their R&D function,” she said. “So I get a sense from speaking to people here that they don’t feel the threat as much as one might think.”

Alcatel-Lucent’s research and development arm has the most value for Nokia, according to Finnish finance analyst Mikko Ervasti.

“Nokia is clearly focusing on its networks operations and this acquisition makes it a big enough player to clearly challenge Ericsson, perhaps even in several sectors,” he said when the deal was first announced.

That means the “redundancies” Nokia wants to eliminate won’t come from Kanata, Mr. Moran said.

“A lot of executive vice-presidents are going to lose their jobs.”

- with files from The Associated Press