by Alex Rudnicki

Contributing Editor - WIIE

In the current world situation, the business development function is becoming critical in general, but with an unprecedented importance for small companies and start-ups.

If until two years ago, companies having an interesting product could open the doors of their prospective customers alone or with a local agent, today, when we are in the middle of a very different economic situation, closing a deal with a new customer becomes almost “mission impossible”.

Starting in 2000, all the Communication Service Providers (CSPs) have been racing to launch as many new applications and solution as they were able. Their purpose was to increase ARPU from their subscriber base, while the associated costs were a secondary consideration. CSPs were looking for “best of breed” technology, thus looking for small companies, even without any installation in place. During such a period, companies could sell directly to the CSPs without any intermediary/partner. They were, even, encouraged by the CSPs to work alone, without partners, being OEMs and/or System Integrators (SI). The CSPs purpose has been to reduce expenses (it is easier to reduce the purchasing price from a small company than from a major OEM or SI).

The change in the economic sentiment has created a major change within the Modus Operandi of the CSPs. The main business objective has changed from revenue’s increase to cost reductions.

Several ways are possible for the CSPs. The main ones include: (i) outsourcing operations to 3rd parties; and (ii) consolidation of suppliers. Both ways have been adopted by the major carriers – outsourcing, mainly for legacy services; and consolidation of suppliers whenever possible.

by Chuck Morris

Contributing Editor - WIIE

I have always advocated remaining open to opportunities, and still feel that everyone’s right to evaluate opportunities while working with an organization is a given. For over 25 years, I have consulted with senior executives recruiting and placing them in the cable, competitive telephony, wireless and now the digital media industries. During this time I have experienced numerous growth spurts and then consolidations with Cable TV Operators, Programming Services, Competitive Telephone ventures, Wireless Operators and related technology and software ventures. The technology ventures serving each of these sectors tend to be impacted like the tail of the beast, but are also excellent indicators for future potential.

As we stop and look around, the state of the economy is not exactly healthy. Our leading companies are closing shop, going into bankruptcy, cutting back, closing down divisions and in some cases thousands of people are being tossed out on the streets. Unemployment levels are at their highest point ever, in some states they can’t afford to cover costs for benefits. Some people are completely caught off-guard, and others may have seen it coming for weeks, months, or even longer in the case of an acquisition. The streets are crowded, and opportunities are not as prevalent as they have been in the past.

Our leading industry players on the Fortune 100 list include AT&T, Cisco, Comcast, Disney, Microsoft, Motorola, News Corp, Sprint-Nextel, Time Warner and Verizon all highly integrated organizations with tens of thousands of employees. The pyramid factor has narrowed the growth opportunities for many great folks who established and built these companies. Through organizational shifts, executives have been forced to either reinvent themselves or to accept more narrowly focused positions in order to survive. The General Managers of old, who were responsible for all operational aspects of a service provider, are now department heads, or have segued out of the industry. Yes, they are typically now in larger operations that have been rolled-up or merged following the acquisition. Of course, some if these former GM’s are now the Division leaders or serve in corporate staff roles.

by John Perry

Contributing Editor - WIIE

Introduction

The prospect – or specter – of a potential merger with another company has impacted many in the telecommunications industry. Sadly, the track record for telecom leadership is not a good one in that regard. The results of the below-indicated 2008 Maritz poll measuring telecom employee satisfaction (contrasting those who had experienced a merger versus those who had not), are arresting: telecom employees who had undergone a merger are more deeply disenfranchised and mistrustful of management than their non-merged counterparts. Generally, as can be seen in the table below, merged employees under-indexed 11%-13% in their answers regarding basic work needs being met compared to those telecom employees without merger experience. This data suggests that telecom companies are less than fully successful in dealing with vital people and culture issues.