BT showcases hi-tech start-ups

“INNOVATION is alive and well, and changing lives at BT,” said Matt Bross, BT Group's chief technology officer, at an innovation showcase event at Adastral Park, Martlesham, last week.

“INNOVATION is alive and well, and changing lives at BT,” said Matt Bross, BT Group's chief technology officer, at an innovation showcase event at Adastral Park, Martlesham, last week.

The event was attended by companies that have spun out from BT's venturing collaboration with US partner, New Venture Partners (NVP), as well as a handful of companies created by NVP with other corporate partners such as Boeing, Philips and Lucent Technologies.

It was both a celebration of the successful spin-outs to date, many of which are now major global companies, and a reminder to BT technologists of where their innovation can lead, said Mike Carr, BT's director of research and venturing.

“These are fantastic companies here today,” he said. “They really have scale now. We want to show them to BT people and say remember how they were when they left and now look at them winning big business.”

Stephen Socolof, NVP's managing partner, added: “Seeing what these companies have become and meeting the people behind them encourages others that it's a successful way to go.”

BT's Brightstar technology incubator joined forces with NVP in 2003 to exploit the opportunity afforded by NVP's skills, capital and resources to commercialise some of the innovations coming out of BT's corporate laboratory which might otherwise have remained undeveloped.

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“We are excited to demonstrate the success of external venturing with our partners at NVP, with whom we work closely to identify and successfully spin out valuable new business,” said Mr Bross.

“External venturing has enabled BT to accelerate its innovation strategy by bridging the gap between invention and revenue generating opportunities. This open approach to innovation - innovating with partners - complements our internal venturing capability where we nurture emerging profitable businesses from within the Group.

“Both types of venturing help build BT's innovation dividend - the way we measure generated revenue.”

The good news for BT and NVP is that there are another 10 companies in BT's corporate incubator currently being nurtured for possible future spin-out. And NVP recently secured funds that have doubled its investment capability, so there is money in the pot to progress those ideas that make the grade commercially.

“When we started, money was a big problem,” said NVP partner Harry Berry, previously head of BT Brightstar. “Now NVP is a truly global player, we can access those funds and help our new companies get a good foundation.”

Mr Socolof added that over the past year numerous large corporates around the world had expressed a desire to work with NVP as the value of spin outs was becoming better understood.

Since NVP and Brightstar teamed up in 2003, four companies with roots in BT's corporate laboratory have been established: Evolved Networks which provides intelligent solutions for access network data migration, planning and design; Azure Solutions, the world's largest revenue-assurance company which recently won the Best Revenue Assurance Project award at the World Billing Awards in London; Vidus which developed a field service automation platform to help manage mobile workers and was acquired by Nasdaq-listed @Road in December 2004; and the latest spin-out iO which provides a complete integrated mobile digital content solution.

Also attending the showcase was Psytechnics, which spun out of Brightstar in 2000 having developed multi-media measurement tools that can accurately predict the actual end-user experience.

These companies are among a 40-plus portfolio that NVP has created since its own spin out from the US corporate laboratory of Lucent Technologies in 2001, since when it has become the recognised leader in corporate spin-outs.

The move to open innovation in partnership with NVP has proved profitable for BT in more ways than one, with the telecom giant benefiting from the services of the new companies it spawned as well as deriving long-term profit from the stake it maintained in those companies.

To illustrate the point, Mr Bross said BT recently won some corporate networks because PsyTechnics' technology enabled BT to demonstrate that its offer worked better than what the customer had before.

It is not just BT and its customers that benefit however. NVP's innovation venturing has been good for the local economy. All the BT origin spin-outs have offices in or around Ipswich, providing several hundred jobs between them for local people as well as attracting top talent to Suffolk.

“The opportunities coming out of BT here are good enough to attract CEOs from Silicon Valley,” said Mr Solocof.

Some of NVP's spin-outs from other corporate partnerships could also opt for a base in Suffolk at some stage, attracted by the proximity to NVP and other technology developers.

So it seems that while the hi-tech industry may have struggled over the past few years, research and development at Adastral Park has been continuing nicely.

“Innovation is key to industry,” said Mr Bross. “And it is key to the economy - locally, nationally and globally - which is why I have been enthusiastic about our partnership with NVP from day one.”