Newbridge Networks is one of those companies that never seems to make the right move in the eyes of industry watchers and shareholders.
It has struggled to regain industry confidence ever since its ill-fated acquisition of UB Networks two years ago. No matter what Newbridge does, it always provides grist to the rumour mill that constantly churns out speculation the company is facing impending demise.
The latest food for negative thought was the recent sell-off of Newbridge affiliate Cambrian Systems Corp. to long-time rival Nortel Networks in December. Following relatively closely on the heels of Newbridge’s September sale of Advanced Computer Communications (ACC) to Ericsson, the Cambrian deal left analysts wondering if it wasn’t a sign of a larger sell-off to come.
Recent speculation has focused on the possibility Siemens AG — a partner with Newbridge and 3Com in the Carrier Scale Internetworking (CSI) initiative — might purchase Newbridge. Both companies deny they are talking about merging.
A December article in The Globe and Mail hinting at an unreleased Gartner Group Canada report that suggests Newbridge’s LAN equipment alliance with 3Com is in peril hasn’t helped matters either.
The truth of the matter is that Newbridge is OK. In fact, it’s a virtual hotbed of activity.
Although it has sold off two of its affiliates, in recent months it has also made several acquisitions, including existing affiliate Castleton Network Systems of Burnaby, B.C.
Newbridge has long been a supporter of Canadian technology start-ups. In fact, much of the high-tech industry in the Ottawa region has been built on Newbridge’s investment dollars (with the exception of a few major players such as Corel and Entrust Technologies).
Guided by Newbridge chairman Terry Matthews, the company’s rather extensive affiliate program has infused millions of dollars into many young innovative companies, helping them develop technology and release it into the market.
In some cases, the start-up matures to the point that it can strike out on its own as an independent entity. Sometimes the affiliate is sold off to another player in the industry, as in the case of Cambrian Systems.
The Canadian networking industry should be thankful Newbridge is there to help young companies get their start.
Now maybe the industry should let it get on with that and stop the endless speculation that its days are numbered.
