How to Turn Around a Telecom
AppTrigger corrected its aim and hit one hot technology market.
APPTRIGGER’S CHRIS TODD: “A good public hanging every now and then tends to get people’s attention.” photography by Adam Fish
Richardson-based AppTrigger was founded in 2001 as VoiceRamp Technologies, which changed its name to Carrius Technologies in April 2003. (The company was always better at hiring engineers than it was at picking names.) By 2005, when it wasn’t attracting the kinds of telecom and wireless-service-provider customers it wanted, the company’s investors began to look for new leadership.
They found Chris Todd, the man who changed Carrius Technologies to AppTrigger in 2007 and would eventually get the company to shoot straight. But back in 2005, he didn’t even want the job.
A former sales executive with Cisco Systems, Todd didn’t see the potential of Carrius’s confusing, “service broker” technology. Service brokers, as defined now, are terribly important. But the sausage factory that made them obscured that fact for years.
A service broker is actually a box—one that looks like any other box with blinking lights, sitting between older parts of a phone company’s network (the switches that enable phone calls) and the application servers in the network, used to create call forwarding, click-to-call, and other services.
The problem the technology aims to solve? Telecom service providers often have separate networks providing Internet access, business services, mobile phone services, TV services, and traditional home phone service. Think of them as a highway system where all the lanes are different sizes, with different speed limits, serving different types of vehicles.
Eventually these networks will converge, and the process of creating new services will be simpler. But until that day, decades away, these networks need the help of technologies like service brokers to help them act as one network.
With a service broker in place, a company like AT&T could create services for its customers more quickly. “A service broker enables any communications service to be delivered on any network, regardless of whether the service was originally developed for that network,” writes Caroline Chappell, an analyst for telecom researcher Heavy Reading.
Why bother now, though? Well, thanks largely to Apple’s iPhone and iTunes App store, hundreds of new applications are being developed, sold, and delivered every day to millions of consumers using telecom networks. The phone companies that operate those networks have missed out on that huge opportunity, and now they want in.
Indeed, many iPhone and other smartphone applications use network capabilities like videoconferencing—capabilities the telecom-service providers feel they should be able to deliver and profit from, too. After all, they own the network.
If AppTrigger is right, service brokers can help phone companies behave more like the Internet and smartphone companies that now are showing them up.
Having the right technology only gets you so far, though.
In 2006, Lev Volftsun, then acting CEO of Carrius, convinced Chris Todd to run the company. When Todd first looked at the business, “it wasn’t clear what you could actually do with the technology,” Volftsun recalls.
But after spending months with the Carrius engineering team, Volftsun had some ideas about a more cutting-edge use of the company’s technology, originally touted for enabling data services to run on traditional telephone networks.
Volftsun needed an ally to run the business. Todd was ready for the job, but he insisted that Volftsun—a well-known engineer who had sold two of his previous companies to Cisco—stay on as chairman. “When you’re alone, existing employees basically gang up on you,” says Volftsun, a veteran of many startups. “Typically to bring in new ideas and concepts you need to fire everyone and bring in your own people.”
With Volftsun on board, Todd changed Carrius to AppTrigger. Volftsun recalls Todd would take risks and wouldn’t shy away from trying something that had failed earlier. “I’ve never seen him give up on anything,” Volftsun says.
Todd’s tenacity was rewarded early.
The company had been doing some engineering work for Dallas-based Intervoice (now Convergys Corp.), a maker of automated voice-response systems. Todd went to see Intervoice his first day on the job, even though it wasn’t AppTrigger’s target end-user customer.
“I asked the CEO: ‘What are we doing right and can we do more of it?’” Todd says. His point: “You have to grow your business. You can’t cut costs to save your cash—you have to replenish your cash.”
When Todd heard Intervoice was giving a big development project to Hewlett-Packard, he insisted AppTrigger could handle it, even though Intervoice wasn’t convinced. “He’s a great motivator and leader,” Volftsun says of Todd. “He stands firm but he doesn’t piss people off.”
AppTrigger worked on the project just in case—on spec. “I told the team: ‘We’re going to bet the company that HP fails’—and they did,” Todd recalls. “We got the million-dollar order.”
Todd helped shake AppTrigger out of the doldrums just as its market was heating up. “Even though you have money from investors, you cannot save your way to success,” he says.
Setting big goals, taking risks, and treating customers well helps get a company on track, he adds. Also, you have to purge workers who aren’t on board with your agenda. “A good public hanging every now and then tends to get people’s attention,” Todd says.
After a year on the job, Todd had the engineering group set to a cycle of new software releases every six months. “We absolutely outpaced what everyone thought we could do because we believed we could do it,” he says.
Now that AppTrigger had money coming in, it was time to motivate the service-broker market.
Making a Market
A turning point for AppTrigger came in May 2009, when Todd launched the Service Broker Forum, an association of vendors who agreed on the term and description of “service brokers” to promote their own viability in a somewhat confusing technology market.
“A lot of the people in this market called their products different things, and that’s just death for an evolving market,” Todd says. “My whole premise was if we got everybody together, we’d have a market. And if we have a market, we can just beat them. We’re not afraid of the competition.”
Todd and his team persuaded Aepona Ltd., Convergin, jNetX Inc., and Open Cloud Ltd. to join AppTrigger as founding members of the Service Broker Forum.
Suddenly, this squishy world of telecom software had a name, a well-defined market, and a set of eager customers who realized these companies could bridge the gap between older networks and tomorrow’s new services.
In June 2009, France Telecom published a request for information for a “service broker” capability in its networks. Suddenly, one of the world’s largest service providers declared its intent to buy the kinds of technologies the Service Broker Forum was touting—and asked for them by name. That’s when the market took off:
> In July 2009, Aepona bought Dublin, Ireland-based Valista, a provider of payment and settlement software to mobile and broadband operators.
> In October 2009, Amdocs purchased Dallas-based jNetX for $50 million, net of debts and cash.
> In February 2010, Oracle Corp. bought Convergin, an Israeli company that helped start the Service Broker Forum, for an undisclosed sum.
> In March 2010, Metaswitch Networks, a UK-based telecom equipment maker, bought AppTrigger for an undisclosed sum. Todd’s rejuvenated, motivated company was suddenly the crown jewel in that firm’s software business.
> In June 2010, Richardson-based Mavenir Systems, a service broker for mobile networks, raised $13.6 million in its fourth round of funding.
“A lot of this market activity wouldn’t have happened if we had not started the Service Broker Forum,” Todd says. And the future looks pretty good. With Dallas-based AT&T as one of Metaswitch’s largest customers, Todd says Metaswitch’s service broker group is “in a perfect spot for growth.”
But even after acquisition, Todd says his job’s not done. “It takes a strong leader within an acquired company to champion it,” he says. “Think about it. You’re not going to even be in the building, to be in the room, to have a discussion about things.”
Phil Harvey is the editor-in-chief of Light Reading, a TechWeb publication that covers the telecom industry.