Simpler Networks – Dialing Into Your Future

Imagine picking up your phone and dialing in a code to activate a new high-speed Internet service instantaneously. Now imagine using that same procedure to change phone service providers, or to call up movies on demand, or to deactivate services during vacations so you can save money.

When that happens you will no longer have to wait for “the cable guy” or the phone tech in the middle of a work-day, and you will likely see the monthly cost of services dropping on your bill. But this is not an imaginary future, thanks to Simpler Networks of Canada, which was founded in 1999.

True to its name, Simpler Networks has developed a simpler, reliable technology for automating the manual process that phone companies have used for generations to connect your communication lines to a particular service.

“This is one of the few pieces of the telecom network that is still managed manually,” says Mike Perrault, co-founder, president and executive vice president of sales for the company. He points out that many technicians are still driving out to big buildings and/or boxes full of wires and cables – called main distribution frames (MDFs) – to turn services “on” or “off” for a customer.

“They are still looking at 10,000 wires to make the right connection… [in] a section of the building that is easily 100 feet long, over 10 feet high and three feet wide,” Perrault explains, noting that technicians don’t always make the right connections initially (occasionally disconnecting services to homes or businesses accidentally). “Operators have been looking for a cost-effective solution to this problem for 30 years,” adds the electrical engineer, who also has a master’s degree in business administration from McGill University.

After years of research and development, Simpler Networks has finally found a solution in the form of an automated distribution frame (ADF) called EZ-MDF that utilizes micro electro-mechanical systems (MEMS), a form of microtechnology, to enable remote cable switching.

“This means not only better service for the customer, but significant labor and space savings for the telecom provider,” says Perrault, noting that their EZ-MDF “box” not only eliminates the need for manual connections, but is half the size of a typical MDF.

“Operating expenses for phone companies are going through the roof right now, and work on jumper wiring is one of the largest cost components,” he says, adding that technicians can now be redeployed to more important work as service demands explode.

It is an amazing breakthrough, but the work that went into it nearly disappeared into history. “We were in dire straits when we first met with Burns & Levinson,” says Perrault, recalling a serendipitous invitation in 2003 to a “U.S./Canada Venture Capital Pipeline event” that the law firm sponsored. It was there that Perrault met with “angel investors” from the venture capital community who took an interest in the MEMS technology and the Simpler Networks story. As a result, the company closed some bridge financing later that year – financing that supported critical research and development refinements to Simpler’s then nascent product.

“We had to develop a prototype that was stable and reliable enough to meet carrier class standards of telecom companies,” Perrault recalls, noting that telecom services have to be nearly 100 percent reliable. “We had been working on this solution for years and we were running out of money,” he adds.

“That bridge round saved the company,” Perrault asserts, noting that Len Gold of Burns & Levinson Canada Co. had facilitated introductions to key consultants and potential investors. “We made it to another round of financing, and now roughly half of our funding comes from Boston sources,” he says, pointing for example to Highland Capital Partners and Kodiak Venture Partners.

“This financing allowed us to work the kinks out of our product and get it to market. Now we have become recognized as a world leader in ADF technology, and some of the top operators in the world are adopting our innovation,” he remarks.

One of the largest network equipment vendors, Lucent Technologies (now Alcatel-Lucent), is so confident in the EZ-MDF product that it has become an investor, as well as a global reseller. Lucent announced in October 2006 that it is offering Simpler Networks’ ADF hardware and software to help telecom service providers serve their customers better. Lucent boldly announced that the new technology would “cut operating costs for service providers by enabling setup of broadband services at remote terminals and street cabinets without a visit by a technician.”

Perrault says the product is already in use in many areas of North America and Europe, and his company is suddenly faced with a different problem – managing the growth of sales and operations functions. “Our successful financing has allowed me to get familiar with a lot of other services that Burns & Levinson offers to help with our development,” he remarks.

“Josef Volman and the whole team of lawyers there have impressed me with their knowledge, their skill and experience,” he says. “I’m also impressed with their speed and efficiency, their cost-effective approach, and the quality of the advice,” Perrault adds, noting that he uses Burns & Levinson for “all of our legal needs related to U.S. activities.”

As a result, Simpler Networks now taps the Boston-based firm not only for financing-related legal assistance, but for help with all kinds of commercial transactions, as well as matters related to human resources, labor and management issues, and corporate governance.

“We feel like we are in very good hands when we turn something over to our lawyers, and that allows us to focus on other things,” says Perrault. He acknowledges that today’s demands keep him from focusing too far into the future, but he confidently asserts that “we could one day allow end users around the globe to activate and deactivate all kinds of services through dial-tone access on their phones and via the web.”

This interview was published in the Spring 2007 issue
of our newsletter, Focus
Click here to view the entire 2007 Spring Focus