Tehama founder and CEO Paul Vallée said being able to sell his product to governments without having to go though a laborious and time-consuming RFP process could be “transformative” for his company, which has just over 20 employees.
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An Ottawa remote-working technology company that was rescued from insolvency two years ago is hoping for a growth surge after gaining preferred access to government and other public-sector clients across Canada.
Tehama Technologies announced last month it has qualified for a supply arrangement with Public Services and Procurement Canada that makes it easier for federal government departments and agencies to adopt the firm’s cloud-based platform that allows employees to remotely and securely access sensitive information and applications.
Tehama founder and CEO Paul Vallée said being able to sell his product to governments without having to go though a laborious and time-consuming RFP process could be “transformative” for his company, which has just over 20 employees.
“The global market opportunity for what we have here becomes very large,” said Vallée, who spun Tehama out of information technology services provider Pythian Group in September 2019. “There is reason for optimism, but everything is going to start at home.”
Tehama’s subscription-based software creates secure “enclaves” that prevent unauthorized personnel from accessing sensitive data while working on laptops and other devices that aren’t necessarily protected by sophisticated cybersecurity firewalls.
Vallée said the platform is more valuable than ever as usage of generative artificial-intelligence technologies soars.
The federal government and other public agencies are in “a race against time to adopt AI as fast as possible,” Vallée said, but most civil servants in departments such as national defence and the Canada Revenue Agency are prohibited from using tools such as ChatGPT because of the security risks of sending data to cloud-based AI applications.
“Finding a way to safely adopt cloud AI becomes unbelievably mission-critical … but everybody is just really nervous about touching the hot stove,” he explained.
Tehama’s platform solves the problem by strictly controlling and monitoring access to information that can be shared with AI tools, creating an "accountability trail” that ensures sensitive data won’t be leaked, Vallée said.
“It becomes like a safe, cloud-hosted sandbox,” he explained, describing Tehama’s software as “a made-in-Canada silver bullet” that could pave the way for much more rapid adoption of AI across all levels of government.
Vallée said Canada’s public institutions can’t afford to fall behind when it comes to using AI to streamline processes and make workers more efficient. A 2023 U.S. study, for example, concluded that generative AI tools can boost the productivity of skilled workers by nearly 40 per cent.
“AI brings a massive productivity advantage to the average white-collar worker,” Vallée said. “This is a chance for us to overcome some of the productivity gaps between Canada and the United States.”
Through an agreement known as the Canadian Collaborative Procurement Initiative, the supply arrangement also opens the door for Tehama to sign deals with governments in a dozen provinces and territories as well as hundreds of Crown corporations, municipalities, academic institutions and hospitals across the country.
Vallée said the company is now in talks with several federal government departments and expects Tehama’s software to be adopted “at scale” within the federal bureaucracy before the end of the year.
“The Canadian government has an opportunity to lead the way and buy a made-in-Canada technology to solve a burning problem,” he said. “I’m very excited about what’s to come.”
Gaining a foothold in the federal government would be a massive shot in the arm for a company that had a meteoric rise but was facing insolvency just a couple of years ago.
Tehama flew out of the gate as demand for its products surged during the pandemic, when a massive shift to working from home prompted employers to beef up security measures for remote employees.
But despite raising US$10 million in venture capital five years ago from backers such as the Ontario Municipal Employees’ Retirement System and the Business Development Bank of Canada, Tehama was eventually forced to apply for insolvency under the Companies’ Creditors Arrangement Act in early 2023, with assets valued at about US$6.9 million and liabilities totalling about US$10.2 million.
Later that spring, Vallée and former Tehama executives Rob White, Kevin Haaland and Mick Miralis led a successful $2.9-million bid to buy the firm’s assets under a court-supervised auction process.
Formerly known as Tehama, the company was reborn as a new corporate entity called Tehama Technologies. Vallée and his management team, who oversaw more than 80 employees at the original organization’s peak, pared back the workforce and made a series of other cost-cutting moves that included ditching the company’s 17,000-square-foot office and shifting to a four-day work week.
Vallée said the decisions, though difficult at the time, have paid off.
Tehama hasn’t lost a single employee in the last two years, he said, and the firm is now turning a profit. Meanwhile, management’s decision to create a U.S. subsidiary to serve clients south of the border has proven prescient in light of the current trade war.
Now, with the path to lucrative government contracts apparently cleared, Vallée believes the best is yet to come for Tehama.
“From a business perspective, I would say the company is actually on a pretty solid footing,” he said. “There is every reason to think that this company is not only profitable now, but it can grow profitably – which means the benefit of this breakthrough will stay in Canada.”
