Government Operations Committee on Nov. 3rd, 2011

[Dr. Geoff Hayward]

Sure. Comparing it to the SR and ED program, there is vastly more due diligence required than for the SR and ED program--vastly more. Compared to IRAP, I would say considerably more than IRAP but in the same league.

One of the reasons I found it challenging, and maybe different companies will have had a different experience, is that each of the sections requires a specific number of words--150 or 200 words--to tell them about an aspect of our technology. Multiply that by 40 or 50 fields that all need to be filled out and it becomes like writing an epic poem in 200-word stanzas. It's a little challenging and time consuming.

Having said that, I don't really think of this as a major issue. I think as a taxpayer I want to hold the government accountable, that they are doing their best to find the best companies. I don't think the effort that was required of me was excessive--time consuming, yes, and a risk factor--but it's ultimately up to the companies to make the decision whether or not they want to take that risk.

[Sean Casey, Liberal, Charlottetown, PE]

I take it from your answer that you have had occasion to participate in the SR and ED program in the past. Do you have any comment you can offer with respect to the effectiveness and efficacy of this particular program vis-à-vis the SR and ED program?

[Dr. Geoff Hayward]

A very important difference between this and the SR and ED program, a vital difference, actually, when it comes to raising financing for a company like ours, is that this is revenue, and investors evaluate companies based on revenue, whereas SR and ED is a tax return. So here's a customer, here's customer feedback, customer reference, and revenue. It's very different.

[The Chair, NDP, Pat Martin]

Thank you, Mr. Casey. That concludes your five minutes.

Next, for the Conservatives, is Scott Armstrong.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

Thank you both for being here.

I'm going to start with Captain Patterson. I read that your company was established in 2004. When did you engage the CICP program? When did you start a relationship with them?

[Capt Anthony Patterson]

The first round of CICP was announced last year, in late 2010, so that's when we established our link with them.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

Before you engaged in that program, had you tried to engage the security departments of the Canadian government, DND, others, the coast guard, to try to sell some of your products?

[Capt Anthony Patterson]

Yes, actually. The things we have for them are a crossover from oil and gas. We perfect it in oil and gas and then we bring it over to defence and security. We've been actively pursuing both departments since 2007, with no success, really.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

But now you're engaged in this program. Do you view this program as a way for your company to actually break into the federal government, particularly those two departments, so that way you can get this reference client to start selling internationally? Is this a big breakthrough for you to be engaged in this program?

[Capt Anthony Patterson]

It's a big breakthrough, but I'm not sure if it's going to be the big breakthrough to supplying the Canadian government. Again, this is a one-shot deal. They can't use this procurement vehicle to buy multiples of the same product. They have to go back through the normal procurement process, which then puts you back to the same problem: we're a new company with new technology and we don't hit the thresholds for risk tolerance.

Where the breakthrough for us will be is that this will help us sell to other places, and by getting those reference clients, five or ten years later we can come back and sell here.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

Does the recent announcement of the federal investment in shipbuilding, both in British Columbia and in Nova Scotia, at the Irving shipyard, show a commitment by this government to shipbuilding, and would that, in the end, possibly help your company some time down the road?

[Capt Anthony Patterson]

Yes. These are enormous procurements and fairly complicated. The key for us is to get into the supply chains of the major contractors, which we have been able to do through the Halifax class modernization, not for our products but for our services. We see that our excellent performance on the Halifax class modernization project is going to stand us in good stead for getting a seat at the table, so to speak, at the shipbuilding procurement process.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

How many employees do you currently have?

[Capt Anthony Patterson]

We have 20 full-time and about 40 virtual employees, plus we have about 20 associated researchers at the university who help us develop new technologies.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

It's kind of an evolving market you're breaking into. I wish you the best of luck.

[Capt Anthony Patterson]

Thank you.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

Mr. Hayward, you're working with Shared Services Canada. Can you describe some of the services you're providing the federal government at this time?

[Dr. Geoff Hayward]

Yes. Our software, as I was mentioning, provides the capability of moving these virtual machines while still running between sites. This capability is very important, particularly for Shared Services Canada, as they evolve into what I would call a cloud provider. They're providing information technology services to many different government divisions in a consolidated, centralized fashion, or trying to centralize much more than they have been in the past. From the point of view of reducing the number of data centres they have as a one-time operation, the ability to move servers between sites without any interruption of service is important.

But looking at the longer term, the real value is to protect those regional data centres, ensure that they can continue to operate, provide services locally, and still have centralized protection in Ottawa for all of their data, so if anything goes wrong there will be no data loss as a result.

Those are the major applications of the product.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

So the upgrading by that department to modernize their technology and their data storage and data transfer systems has provided you with an advantage because you have a product that meets those demands?

[Dr. Geoff Hayward]

That's right.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

You talked about data storage and data mobility. Does your product actually protect data?

[Dr. Geoff Hayward]

Yes. It keeps a replica of the data in a remote location. One of those replicas is active and the other is passive and hidden, and when I want to change from one site to another, move the server and have everyone believe that it moved from one location to another, all I'm doing is exposing the hidden replica and hiding the original one. In this fashion, I don't actually have to transmit all the data across the network. You could think of it as a very sophisticated shell game.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

That's exactly what I was going to say--

[The Chair, NDP, Pat Martin]

Actually, Scott, I'm afraid you're well over your time.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

Thank you very much.