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Future of hi tech firms in doubt

PUBLISHED: 20:16 30 November 2001 | UPDATED: 10:56 03 March 2010

WITH news recently that Truth Consulting Technology - the first high-tech "spun-out" company from BT's Brightstar incubator - is heading for liquidation, it poses the question: "Is this the end for this type of innovation coming out of Martlesham Heath boffin land?"

Business editor LYNN ABBOTT asked the crucial question of Brightstar's Harry Berry.

WITH news recently that Truth Consulting Technology – the first high-tech "spun-out" company from BT's Brightstar incubator – is heading for liquidation, it poses the question: "Is this the end for this type of innovation coming out of Martlesham Heath boffin land?"

Business editor LYNN ABBOTT asked the crucial question of Brightstar's Harry Berry.

LESS than two years into existence, Truth Consulting Technology is heading for obscurity.

It was the first chrysalis to emerge from the incubator think tank at BT's Adastral Park and was destined to be the bright star coming from the Brightstar boffins.

But almost certain doom for Truth does not signal the same destiny for other Brightstar fledglings said chief Harry Berry.

In fact, Mr Berry who staunchly supports his baby, said: "Brightstar is alive and well. The companies within it are getting stronger and stronger.

"What happened to Truth is different. It was filling a niche market and it has been affected very much the same as other companies in the telecoms sector.

"Many companies have been hit hard and have debt caused by the licensing changes, the supply companies in particular have been really badly hit," he added.

Truth and its 20 employees, had been guaranteed funding of £3 million in the summer through equity stakes from BTexact and venture capitalist 3i.

But when the plug was pulled at the end of October, Truth managing director, Russell Cameron said the board was left with no alternative but to take steps to wind up the company unless a benefactor could be found.

Mr Berry said that he had not heard of financial help coming forward but he was aware that the situation with Truth - based in Ipswich - was still at a very delicate stage.

Brightstar is an off-shoot of BT where innovation among employees is encouraged to the extent that super high-tech ideas deemed viable propositions are given the opportunity to develop.

Companies are set up, under the shelter and financial backing of BT, and with their own board of directors go through various stages before going it alone.

Mr Berry explained the processes of Brightstar's hatchlings.

Incubation: Approved business proposals move into Brightstar's corporate incubator where they develop and build their business for a period of about six to nine months. They are fully funded by BT.

In acceleration: the company is building up value. Still funded by BT and still within Brightstar but accountable to its own board of directors.

Spun Out: Fled the nest and an independent trading company.

Truth had flown the nest. Psytechnics (specialising in the measurement of voice quality in telecoms systems) and Venation (creating efficient and reliable internet networks) were "spun out" last year, which means that they too are self-sufficient, independent trading companies with their own boards.

Companies in acceleration are: APSolve, which markets, develops, sells and supports Taskforce, which manages over 20,000 field engineers in the UK and aimed at large mobile workforces.

Cinnamon River, providing voice activated information service; Evolved Networks, for effective use of network routing and Rocking Frog, location-aware accessing of information from mobile devices.

In incubation: Exago, knowledge management solutions; Gabrielle, the coming together of voice and web; Qariba, for broadband technology and Telopsis, providing a large scale service management system for network providers.

Mr Berry is passionate about Brightstar. He is determined it will succeed and he said that although there will be more failures in the future they would undoubtedly be because of the change in the market.

"The market is dramatically changing and because of these changes of today it will affect the innovation of tomorrow.

"All Brightstar companies are pilot tested on the market, they don't leave without the financial backing.

"If the market goes down, like it has been doing, that really should be the time to invest, to be there for when outside influences improve."

BT itself has been drowning under the swell of a multi billion pound debt and in a bid to remarket itself has been split into separate entities.

Shares in the BT Group, have this week for the first time, gone up to such an extent that on Wednesday prices were featured in the top risers for the day.

Cellnet, now renamed mmO2 is just about holding its own after the split from the main group but the name BT - the oldest telecoms company and with the best inventive brains in the industry - still conjures up horror for investors.

Even though the main company continues to struggle, Mr Berry says that Brightstar will receive the backing of its parent.

He is hopeful, even confident, that the worst has already happened to the industry and added: "Brightstar corporate incubator needs consistency and we will continue to be invested by BT. We are starting new technology at an early stage and it will go into the future.

"Confidence will come back to technology innovation again and we will still be here when it does."

WEBLINK:

www.btbrightstar.com/

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