[ASC-media] Media release: Australian ICT spinoff hits jackpot
crcamedia at starclass.com.au
Mon May 3 22:17:33 EST 2004
CRCA Media Release 04/19
May 4, 2004
AUSTRALIAN ICT HITS THE JACKPOT
A spinoff company from Australia's Co-operative Research Centres (CRCs) has signed an historic export deal potentially worth hundreds of millions of dollars.
RBN Inc, a spinoff firm incubated by the Australian Photonics CRC, has signed a 5-year agreement with the Marconi Corporation, one of the world's largest communications technology suppliers, to resell the Australian-developed technology for expanding the capacity of existing communications networks.
In a boost for the knowledge economy which is already being compared with the $US300m sale of Radiata Pty Ltd in 2000, RBN has secured partners for its CWDM (coarse wavelength division multiplexing) technology in Europe, America and Asia, while retaining the intellectual property in Australian hands.
RBN was founded by Dr Richard Lauder, a Photonics CRC researcher from the University of Melbourne, and Ross Halgren, who led the Sydney node of the CRC's networking vehicle, Redcentre PL.
RBN is an innovative designer and developer of carrier class optical transport and switching platforms for the access and metro markets. It develops cost effective technology for use in offices, enterprises and telephone exchanges enabling carriers to offer lower cost broadband services.
"Designed with a small form factor, low power consumption and low cost of ownership, RBN is pushing the boundaries of optical networking closer to the end user," says Dr Lauder.The company's administrative headquarters are now in California while its research centre remains based in Sydney where it employs 70 staff.
"The overall world network market has been flat for a couple of years but our segment is one area that is showing strong growth," Dr Lauder says.
"Today the game is all about getting greater capacity out of existing networks at a lower cost, rather than putting in new networks. That's exactly what CWDM does - it complements existing technology. And it is very cost competitive."
Dr Lauder says the world market for coarse wavelength technology was $US100M in 2003, is estimated to be $US200M this year and expected to double again by 2006. The Australian technology is well positioned to capture a major slice of that growth.
The fledgling company was nurtured in the Photonics CRC with help from the Commonwealth Government's Technology Diffusion Program. Lauder and Halgren pooled their ideas to develop a new product which addressed a key gap in the metropolitan communications network market.
Around the same time, the Australian Photonics CRC, through its commercial agent, Australian Photonics Pty Ltd, established incubator company Redfern Photonics Pty Ltd, which successfully raised over $220M between 2000-02. Redfern Photonics, in turn, invested in subsidiaries including RBN, enabling it to further develop its product and break into global markets.
In the process, says Dr Lauder, RBN received strong support from local venture capitalists Macquarie Technology Fund and Allen & Buckeridge and found further capital for expansion from partners in the United States, leading to the launch of international company RBN Inc. in which Australians are majority shareholders.
"We had great support from Australian venture capitalists, but there just wasn't enough to fund the rapid expansion we were planning, so we looked for a US partner," Dr Lauder says.
The second challenge to be overcome was building market confidence in the ability of a small startup like RBN to service the exacting needs of major telecommunications suppliers - and the answer was found in partnership with major technology suppliers.
"Marconi is our largest partner so far, though we have four others and now cover all the main markets. The Marconi contract means we can give telecommunications carriers everything they need to get the most out of their existing networks," he says.
Despite its early success, RBN is upping the pace. New technologies are being readied for launch in the coming months, and returns from sales anticipated from the Marconi arrangement will be substantially ploughed back into R&D in Australia to stay ahead of the game, he says.
"By combining our optical network offerings with RBN's CWDM product, we're providing carriers with the ability to implement leading edge technology that overcomes most of the cost issues associated with the provisioning of a broadband network, reducing the cost of service delivery," says Martin Harriman, chief marketing officer, Marconi Corporation.
Australian Photonics CRC CEO Professor Mark Sceats says the success of RBN highlights the role of Co-operative Research Centres as business founders and incubators, capable of delivering 'born global' technology companies in Australia.
"This would have to number among the largest ICT export deals done by an Australian-owned company," he says.
"This one deal has the potential to pay for a very large slice of the taxpayer investment in the CRC program through new export income for Australia - and there are plenty of promising young spinoffs in the pipeline from ours and other CRCs," he says.
Prof. Sceats says the 5-year deal also highlights the value of embedding leading edge hardware and software together, to build commercially viable technology products that have a good market life.
The RBN technology addresses Australia's third national research priority, frontier technologies for building and transforming industry.
Dr Richard Lauder, RBN Inc 02 8918 1900
Prof. Mark Sceats, Australian Photonics CRC 02 9209 4790
Elizabeth Elenius, Australian Photonics CRC 02 9209 4148
Prof. Julian Cribb, CRCA Media 0418 639 245
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