Rising with Computers

Kanatek president Terry Kell (left) and CEO Peter Karneef are resilient in the face of digital uncertainty.

The history of data-management specialist Kanatek Inc. is one for the digital age

Kanatek is an ever-evolving enterprise, says Peter Karneef, who founded this innovative enterprise in 1982. And the company’s history is tied closely to the rise of computers—as the machines evolved, so did the company.

Kanatek is based in Ottawa, Ontario, and has offices in Montréal and Toronto. The company has developed into a data sentinel—safeguarding, managing, and supporting data infrastructure for major players in the telecommunications, government, and utilities sectors.

Development involved a four-step evolutionary process, and the first stage came in 1982, at the beginning of the PC boom. “Peter began by reselling PC hardware and software technology in Ottawa, which is known as ‘Silicon Valley North,’ an area that proved rich in research and development and that was populated by early adopters of computer technology,” says Terry Kell, Karneef’s business partner and company president.

In 1984, Karneef incorporated the company as Kanatek Technologies, which moved forward by developing its own branded computer, the Max PC. This vanguard business model enabled the company to sell to major technology firms such as Northern Telecom (which would become Nortel).

During the next evolutionary phase, Kanatek opened offices in Europe and the United States, an expansion driven by customer needs. “As clients like Nortel and CIBC grew, we went beyond the
local and national markets and into international projects, in as
many as 15 countries,” Kell says.

The three-person company, once simply involved in mainframes, slowly matured by acquiring new trends. The first was a move into network solutions, notably with UNIX, an operating system developed by the military. As UNIX found more applications in the public sector, Kanatek was able to expand its business as well.

Storage management became a strong focus for Kanatek, and the maturing UNIX found its way into data centres. “Clients experienced storage-management issues, and we developed a skill and service set around a UNIX environment that demonstrated scalable backup and recovery capabilities,” Kell says.

In the early 1990s, Kanatek moved on the global stage with its relationship with Sun Microsystems. “The client list grew,” Kelly says. “Bell Canada, Boeing, CIBC, Rogers, Ericsson, and the Bank of Canada became customers.”

Business burgeoned with the UNIX integration and connectivity capabilities, and Kanatek opened new offices in Ottawa and expanded into Toronto and Montréal. That was in 1994. By 1998, Kanatek moved with its partner base—which included Veritas and Hitachi Data Systems—overseas.

Then the company suffered a one-two punch. First, there was the burst of the telecom bubble that occurred in the summer of 2001. The 9/11 terrorist attacks happened soon after, and the world was significantly changed.

“Globally, everything slid,” Kell says.

The shifts compelled market changes and forced new responses. Kanatek made its own. “We repatriated a lot of our business back into Canada, as a lot of business went away following the catastrophe,” Kell says. “Everything in Europe and the United States ground to a halt.”

The response helped the company get back on its feet, and within three years the company generally stabilized, until the 2008 recession.

“[The recession] led us into the next evolutionary step,” Kell says. “We restructured and refocused our company.”

Faced with new and unforeseen problems in the new millennium, Kanatek redeveloped its corporate values, underscored by its EFFECT acronym—ethical, focused, flexible, enduring, creative, and trusted. “These, we feel, are elements that relate to the changes going on within the company, the industry, and in the global economy,” Kell says.

Once again, the results proved positive. In both 2010 and 2011, Kanatek saw an 8–10 percent growth.

More importantly, the growth is robust and moving the company in new directions. “We’re in our fourth evolutionary step, which has led to the development of a professional-services-led model that focuses on large enterprises,” Kell says. “[This] will help such clients develop strategic, long-term plans to manage unprecedented data growth. We will fulfill day-to-day, month-to-month, and year-to-year requirements around data storage and management.”

Kanatek is strategically aligned with its clients, privy to their direction as far as new applications. Today, the company employs more than 50 data-storage professionals. It’s clear that Kanetek is an evolving enterprise, not an entity doomed for extinction. In the Darwinian landscape of recession, it has proven itself adaptable to changing business environments.