An IT veteran takes stock

Ottawa was one of first IT economic engines in Canada – and continues to be so today. Thus, anyone referred to as the “father of high tech” within Ottawa’s local business community likely didn’t come by that title by chance.

Clearly, Denzil Doyle has earned that title. Not only did Doyle found Digital Equipment of Canada Ltd., but by his own estimation he either founded or played a key role in the development of at least a dozen other Ottawa-area high-tech companies. He’s written a book, entitled Making Technology Happen, and even has a street in the nation’s capital named after him. Today, Doyle continues to be active in Ottawa’s venture capital scene as chairman of Capital Alliance Ventures Inc.

Denzil Doyle was recently honoured at the Canadian Information Processing Awards (CIPA) ceremony in Toronto, where he was officially inducted into CIPA’s Hall of Fame. His name now sits alongside such high-profile inductees as Alexander Graham Bell and Java guru James Gosling.

ComputerWorld Canada contributor Michael MacMillan got a chance to speak with Doyle at the CIPA ceremony, getting his impressions of the state of the Canadian IT industry as it suffers through a rare crisis of confidence.

CWC: What would you say are Canada’s IT strengths?

Doyle: Canadians have always been good at information technology, particularly at telecommunications – it’s been forced on us by our geography, primarily. When I look back into the ’70s when computers and the telephone came together, Canada was faced with the challenge of supplying a reliable communications infrastructure right across the country so that computers in the Royal Bank’s head office in Toronto could communicate effectively with Royal Bank offices across the country. In order to do that, we had to develop some unique technologies of our own, such as packet switching. Canada has always pioneered packet switching, and I think we applied digital technology at an earlier stage than it was generally applied elsewhere.

So while today we might be a bit discouraged by the state of the stock markets and so on, I see it as a temporary thing. The world always needs communications and Canada will be back there. The trick is to make sure we keep our key people here at home.

CWC: You refer to the brain drain – that is an ongoing issue, one that the public and private sector seem unable to effectively solve. What’s your advice?

Doyle: I think we have to make better challenges for people here in Canada. As long as we can keep challenging our young people, they’ll stay here. Of course, we have to reward them accordingly, but we also have to allow them to build winning companies and winning industries. Now that I’m in the venture capital industry I have good exposure to the whole financial infrastructure in Canada, and I’d like to see a somewhat stronger financial infrastructure, particularly as it relates to the New Economy. I think we have a financing industry, if I might use that term, which is more attuned to financing the old economy companies as opposed to New Economy companies. I think one of the challenges for Canada is to build a whole new class of financial companies that are capable of acting as receptors, if you like, for small Canadian companies.

CWC: How do you get financial industry leaders to rise to the challenge?

Doyle: Well, interestingly enough, we do have Canadians who know how to take risks. If you look at the home-grown IT industry we’ve built around Ottawa, that’s all been built by people who maybe weren’t born in Canada – although the ultimate risk-taker in this country as far as I’m concerned is (Newbridge Networks founder and Mitel co-founder) Terry Matthews. Terry has set a standard that now everybody in Ottawa seems to be emulating. It’s just a matter of time. Certainly we’ve got a very vibrant, home-grown high tech industry in the Ottawa area, and all that’s been built by individuals willing to risk their own money.

CWC: What role does government have to play in this effort?

Doyle: Our policymakers seem to be focused on this metric called R&D. They seem to be very concerned with the fact that the percentage of our GNP that Canadians spend on R&D is lower than many other countries. I argue that Canada has an industrial infrastructure that doesn’t need a lot of R&D, and until we make up our mind that we’re going to change that industrial infrastructure, there’s no sense pushing R&D. It’s not something that you can force feed, and it will come about…if we can get our financial industry more attuned to building world-class Canadian companies. That’s how we go about restructuring the Canadian economy.

CWC: What do you make of the current slowdown in the technology industry?

Doyle: Well, I have a view that isn’t shared by anyone else, but I’ll express it anyway. Ten years ago many people were saying that the Y2K problem was going to hit us one way or the other. So beginning in about 1994, every IT manager was given unlimited budgets to fight this so-called Y2K problem. Even governments got into the act and subsidized the purchase of new networks and new computers.

The result was that the telecom equipment industry, which had been growing steadily at 20 per cent a year for the last 25 years, all of a sudden started going at 100 per cent a year. That would’ve been okay if it was for only one or two years, but as I say, it started roughly in 1994, and when people saw this happening for five years they said ‘this must a 100 per cent industry.’ Well, it really wasn’t, it was really a 20 per cent industry with a blip, and now what we’re seeing is the blip coming back the other way, and we’re now in the negative end of the blip. It will come back again. And I think the IT industry in North America has a long-term growth potential of about 20 per cent.

CWC: What areas in particular will be hot?

Doyle: I can’t help feeling that photonics is a game that we’re going to have to play. Same for the whole business of wireless Internet – it’s just going to be too darned expensive to lay fibre in all parts of the country, and I think in remote areas you’re going to have to rely on wireless Internet. So I think that’s going to be a big, big industry. The other thing that’s going to happen is that when we come out of this (slump) I think you’re going to see companies like Nortel take a good, hard look at their distribution channels. I personally think you’re going to see companies going more with their own sales force.

CWC: What would you say has been your greatest achievement?

Doyle: I think I’ve had a very catalytic influence on the Canadian high-tech industry in the Ottawa area. That might be boasting, but I’ve made a lot of personal investments in the Ottawa area. I’ve also been a crusader for technology in the Ottawa area, and I can point to a dozen small companies that I either started myself or got heavily involved in. Growing Digital was a lot of fun, but I’ve actually had more fun since I left Digital.