Telcordia Technologies Inc. has appointed as CEO former Nortel executive Matthew J. Desch.
Desch succeeds Richard C. Smith, Jr., who has been appointed vice chairman of the Telcordia board of directors after serving as CEO for five years.
Desch, 44, spent 13 years at Nortel Networks before leaving in 2000. There he was executive vice president and president of the Global Service Providers division, responsible for growth in the company’s carrier business in Europe, the Middle East, Africa and Asia. Earlier, Desch was president of Nortel’s Wireless Solutions division, where he led the company’s revenues from less than $1 billion to more than $4.5 billion. Under his leadership, Nortel was the fastest growing supplier of wireless equipment to major operators worldwide.
“While Telcordia is highly respected for the expertise it has and some of its systems, there are opportunities here to move faster, to be more responsive,” said Desch in an interview today with XCHANGE. “I don’t think it’s been as open as it could be. The OSS and other software the company produces do not have as many open interfaces as will be needed in the future.”
Of course, Telcordia was previously known as Bellcore, which had been the research and development arm of the Bell operating companies. The company changed its name to Telcordia and began a transformation to deliver solutions to service providers of all stripes years ago. But the Bells are still Telcordia’s primary customer base and the company continues to struggle with its reputation as a slow-moving legacy outfit.
“Telcordia has a long standing reputation that doesn’t necessarily fit what it is capable of doing and what it is doing,” said Desch. “I think we’ve got to be more aggressive about showing what we can do.”
Desch, whose appointment as CEO was announced today and was recruited just last month, said specific plans for making those changes have yet to be decided, but he indicated some of the initiatives he intends to undertake.
One is more teaming with other companies. Telcordia already has partnerships with IBM and Micromuse, he said, and there will be more such deals to come.
Telcordia may also buy some companies outright, he said. “I personally am very interested in some acquisitions in OSS,” he said, mentioning the business opportunities in the areas of next-generation/IP networking and mobility.
Indeed, the fact that Desch has a strong wireless background is “a key signal” of the importance of wireless to Telcordia’s strategy going forward, he said. Today Telcordia is a leader in the wireless network portability area and has some other wireless products, he said. But as wireless operators gain scope and scale and continue to consolidate, Desch said, they will face many of the same OSS issues Telcordia has helped solve for wireline operators.
Desch also said he hopes to expand Telcordia’s business more rapidly in the international space, an area in which he has experience from his Nortel days. Today the majority of the company’s revenues come from business within North America, and the company has small businesses in Latin America and Europe.
Desch began his career at AT&T Network Systems and AT&T Bell Laboratories (now Lucent Technologies), where he was a senior manager in software development and strategic planning.
For the last two years Desch has served on the boards of several upstart telecom companies. He has been chairman of Airspan Networks Inc. He is board chairman of Cyneta Networks and a board member for Flarion Technologies, Glenayre Communications, Celerica Inc. and Taqua Inc.
“The last few years I’ve focused on venture firms, startups, in terms of building and innovating in the space,” said Desch. “But I also recognized, given the unprecedented nature of the downturn, [for carriers it’s become] more an issue of surviving.” While some startups will succeed, he said, “we’re really falling back on a model where telecom companies are looking to established companies for security and long term viability.”
Desch said he’s been looking to lead a company that could be a long-term leader in its space. He likes the OSS model that is central to Telcordia’s business, he said, because OSS is something “that service providers are going to need no matter what” and “Telcordia has a really strong position today.”
The company today has more than $1 billion in annual revenues, which is about 30 percent down from its high point in 2000 and 2001, according to Desch. In the last couple years Telcordia has scaled down its employee headcount by about 30 percent in a move to cut costs in light of the telecom market’s downturn.
In light of the downturn and service providers’ new focus on lowering capital expenditures and realizing quick returns on investment, XCHANGE asked Desch whether Telcordia’s reputation as a provider of total solutions is more of an advantage or a disadvantage. Desch answered that although companies are looking for low costs, they are not necessarily looking for point solutions. “These companies are still looking for a seamless end-to-end picture of their network with solutions that manage the flow through from the beginning to the end of the process. But they want them to cost less,” he said, adding, “We have to find ways to sell the parts, or smaller pieces if necessary.”
