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BELLCORE 3.0

No one could ever rightly accuse Telcordia Technologies or its predecessor, Bellcore, of not being innovative. On the contrary, the company that once manned all R&D efforts for the incumbent Bell companies boasts a legacy based almost entirely on technological innovation.

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Instead, the challenges facing Telcordia relate to a heritage to which the company seems inextricably linked. It's a heritage implied by two words used in the above description of the company—and, in fact, in virtually every description of the company. For as long as anyone can remember, critics have hung the terms “Bell” and “legacy” around Telcordia's neck like a medieval yoke.

Even after it was spun off by the Bells and acquired by SAIC in 1997—and even after it shed the Bellcore moniker and recast itself with the vaguely homonymous name Telcordia—the company was still saddled with the same negative incumbent image. It was still treated like a pariah by the cozy brotherhood of semi-interoperable back office software vendors. It was still criticized for being too big, too entrenched, too exclusive and too embedded in the networks of the companies that spawned it.

SIDEBARS

The culture question

Elementive schooling

 

If Telcordia has its way, however, all of that will change—starting this week. In fact, the company likely would argue that all of that already has changed internally, and that as of now, all the criticism of its inwardly focused practices, all the preconceived notions and assumptions about its culture and all the reservations about its image will dissipate when the company effectively relaunches itself and emerges as a new—that is, a newly new—Telcordia.

“We never had a problem with technology here,” said Matt Desch, Telcordia's CEO since July 2002. “I was a little worried coming in here about what the business model was. The vision I had was that this company represented an incredible foundation for the future.”

Desch is the person at the helm of the new Telcordia, and the same person responsible for engineering the resculpting of the company since he took the CEO spot last year. By his own account, Desch is a growth guy and a big company guy—a leader of large organizations. He plans to grow Telcordia's already billion-dollar business much like he took the wireless infrastructure business at Nortel Networks from a $1 billion business to one with revenues of $4.5 billion in three years.

Desch may even throw in a dash of the entrepreneurial spirit he picked up during a self-inflicted hiatus from executive leadership that spanned from 2000—when he left Nortel after 13 years, stepping down as executive vice president and president of the vendor's global service providers unit—up to the Telcordia appointment. During that time, Desch held board seats at several companies, dabbled in venture capital investment and served as the non-executive chairman of Airspan Networks.

Detractors say that what Desch and Telcordia aim to accomplish can't be done. But as the company begins to respond to its customers in new ways and opens its architecture—as well as its arms—to new partners (partners that are increasingly frustrated at trying to knock down RBOC doors on their own), those critics are dwindling.

Telcordia has long enjoyed the enviable position of maintaining a virtually unbreakable grip on incumbent carriers' core operations processes. This week, however, the company plans to show its customers, partners and competitors how it is just as firmly embedded on the other side of that transition—the inexorable march toward next-generation networks.

Strategically, a new Telcordia is already visible in the company's new corporate structure, its revved-up partnering strategy, its New Generation Systems (NGS) architecture and business model, the leveraging of its applied research group and a more narrowly focused professional services team. It can be seen in the attitude of its 4000 survivors (one of Desch's difficult but necessary first moves as CEO was to thin the ranks) and heard in the confident voices of Desch and the talent he has recruited to help drive the growth markets of IP, cable and wireless—not necessarily in that order.

“We don't use the term ‘legacy’ anymore,” said Mark Effinger, corporate vice president of global engineering at Telcordia and a 20-year veteran of the company.

A new Telcordia is also visible in the acknowledgement that it can no longer go it alone, ending a somewhat self-imposed isolationism as the company branches out—seriously this time—to new global markets. However, to lend credence to a strategy, it must be more than visible: It must be felt.

To ensure that its service provider customers feel the impact of the new Telcordia, Desch implemented a price-slashing initiative for embedded systems that touches carriers in the only place that has not been numbed by the downturn—their wallets. Telcordia's core systems account for 56% of the company's revenue, but they contribute 100% to the image of the old Telcordia. They also contribute an inordinate amount to the operational expense of carriers.

“It has always hung over the carriers' heads—this big number they had to pay us every year,” Desch said. “I don't want to be viewed as expensive.”

So Desch quietly (that is, without broadcasting to the industry at large) instituted the unconventional strategy of reducing licensing fees and support costs for all of Telcordia's legacy core system software over the next three years—because, as he put it, “our customers need us to, and because we can afford to.” The plan is to reduce those fees by an average of 10% per year over the next two to three years.

“I recognized early on that we needed to reduce our reliance on that maintenance revenue,” Desch said. “It is not going to help our bottom line upfront, so of course it brought some push-back internally. But it will help service providers grow. It will free up their budgets to spend on New Generation solutions. I certainly hope they spend it on me, but I'm going to do it anyway.”

Desch himself pointed out that while reducing maintenance fees for existing systems is significant, it would mean little without an accompanying strategic vision. As Desch said (with unintentional irony, given how many of these his company has produced): “There are no manuals on how to do this.”

Manual or not, Desch does have a vision, and most of the pieces of that vision are already in place. Until recently, Telcordia was widely perceived to be a project company that was organized along technological capabilities rather than around the needs of different categories of service provider customers.

“Prior to Matt's arrival, the vast majority of the work going on was in support of the major RBOC clients,” said Teresa Vega, sector vice president and group president of Telcordia's wireless, cable and emerging markets unit, who joined Telcordia earlier this year from Lucent Technologies, where she was chief operating officer of the wireless infrastructure unit responsible for AMPS, CDMA and TDMA equipment. “Matt quickly decided that growth wouldn't occur unless he did something fundamental to change the strategy and, at the same time, continue to support the RBOCs. He decided to focus the company as much as possible around customer segments as opposed to the technology functions it had been organized around in the past.”

Where once a single entity housed both core and next-gen systems, Desch created two. Where once there was a software development team for each business unit, Desch made one. Where once no wireless unit existed, Desch created one. He moved marketing into the global sales organization and applied research into the forefront. He created a Global Implementation & Operations Support team. He gave the sales team new management and a regional focus that brought them closer to their customers. Finally he relocated company headquarters from Morristown, N.J., to Piscataway.

Telcordia now has six primary business units: Professional Services, led by Dave Arbach; Applied Research, led by Adam Drobot; Operations and Network Solutions (ONS), led by Steve Chappell; NGS, led by Ragui Kamel; Wireless, Cable and Emerging Markets, led by Vega; and Global Sales and Marketing, led by Patrick Joggerst.

Desch also combined all the company's software development resources into one group, led by Bill Wanke. Of all the components of the reorganization, that was the one that resonated most with longtime employee Effinger. “For the 20 years I've been there, the power was with the people who developed the software,” he said.

First and foremost, a $1 billion company cannot ignore the group that generates 56% of its revenue. So despite the focus on next-generation and emerging technologies, the ONS group, which manages all of Telcordia's core systems, cannot rest on its laurels—it too must continue to innovate. This group maintains dozens of legacy software solutions running in various telcos. The average age of these products is a little over 12 years. However, some, such as TIRKS—the circuit inventory system—will celebrate their 30th birthday next year.

Telcordia software contains more than 100 million lines of code. This is both a testament to its contribution to the industry and a source of frustration to customers who feel bound by it. However, carriers are not in the habit of staying bound to things that don't serve their purposes. Last year, Telcordia software handled 600,000 orders per day and 7 million trouble tickets. It managed more than 4831 Class 5 switches.

Telcordia didn't invent the acronym, but neither did Henry Ford invent the automobile. Names for service assurance and work management systems such as WAF/DI and WAF/DO (pronounced “whaffa-dee” and “whaffa-do”) still roll off the tongues of operations personnel like some secret language. Carriers such as BellSouth still live and die by the NMA (network monitoring and analysis) system. TIRKS, PAWS and MARCH are as indispensable to guardians of the central office as a serviceable MLT (a non-Telcordia staple).

To Telcordia's credit, said a semi-annual report by Software Productivity Research in late 2001, most of these software systems have kept pace with changes in both the network and the marketplace. The report found that “despite its endowment at birth of 80% of the software supporting the U.S. telecom network, Telcordia has enhanced and maintained its software and introduced new products in the presence of fundamental, discontinuous shifts in technological and regulatory paradigms.”

Just as important to carriers—almost as important as the 30% discount mentioned above—is that Telcordia continues to develop many of these mostly mission-critical products. And even though the changes at this point for most systems are small, the volumes of systems deployed give them meaning. “Small incremental improvements can translate to significant savings,” said Zach Gilstein, group vice president of service assurance and workforce management solutions for Telcordia's core systems group.

Telcordia has upgraded many of its core systems to support the various technologies that have emerged since the systems were developed, such as dense wave division multiplexing, Gigabit Ethernet, Sonet and fiber to the premises. Future capabilities for core systems include optical and control plane support, ATM, frame relay and DSL surveillance capabilities. Further down the road is provisioning and service assurance support for IP-based DSLAMs and optical mesh networks.

A telling sign that Telcordia is serious about helping carriers make the transition to the next generation is the development in and commitment to providing a Web services architecture that ties its legacy systems into next-gen architectures through XML-based interfaces and middleware. “Our goal is to provide a less than one year payback on new capabilities,” Gilstein said.

Providing carriers with relief on the cost of maintaining these core systems is important to service providers that “have not been satisfied with the kind of financial help Telcordia has been giving them until now,” said Karl Whitelock, program director for OSS competitive strategies at Stratecast Partners.

It is also important because, as Desch pointed out, the licensing fee reduction is only a first step in Telcordia's relationship with carriers. “This is just a foundation,” he said. “If we didn't have anything to follow that up with, it would be pointless.”

The responsibility for Telcordia's follow-up falls to Ragui Kamel, sector vice president and group president of New Generation Systems. The NGS group accounts for 23% of Telcordia's revenue—not bad for a near-fledgling unit, but not enough to be the backbone of the company, which it will have to be within a few years. To do that, 22-year Nortel veteran Kamel will have to, as he put it, “transform the gorilla.”

Kamel plans to achieve that transformation by doing what few vendors are yet able to do: sell interoperable, commercial off-the-shelf products that support next-generation networks. Telcordia has a portfolio of products in such areas as workforce management, interconnection and service fulfillment, as well as additional OSS realms like planning and engineering, inventory and surveillance. Some of the newest products, such as Force, Managed IP and Network Engineer, have been developed in-house. Others are the result of partnerships.

Telcordia has high hopes for the workforce management software known as Force, an integrated suite of workforce management products aimed at the mobile field corps. “Some people would say it's not a new product—that we've had it for nine years,” Kamel said. “What I say is that we've had a lump of software for nine years, but it's only in the past 12 months that we've truly taken that lump and turned it into a solid product.” Solid enough, indeed, to convince BellSouth, McLeodUSA and Telecom Italia to implement it, and at least one other international Tier 1 provider to put it under trial, for a total of $60 million in revenue in the past nine months, according to Kamel.

Also ranking high on the expectations list is Telecordia's Managed IP platform. It is at the heart of what lies on the other side of the generational crossover for carriers using Telcordia platforms today, and what the company is hoping will entice carriers around the world to the new Telcordia tomorrow. Managed IP includes inventory management, service creation, network monitoring and configuration management as well as performance management for IP-based networks.

However, the products themselves are never enough. In fact, according to Stratecast's Whitelock, they're not even all that new. Telcordia has been developing products along this line for the last couple of years. However, they are now market-ready and proven, Kamel said. What's more, Telcordia is backing them with internal business process changes that it says will result in more open, user-customizable solutions.

In the coming weeks and months, customers and competitors will be hearing a new watchword: Elementive, a chemistry-inspired concept that helps explain one of the company's major changes. It is the cornerstone of a new marketing campaign that heralds Telcordia's modular and open approach, which is: No more customization.

Telcordia will still do projects. It will still consult and provide professional services. It will, at times, play second fiddle, while at other times it will conduct. And in some cases, it will play a duet. It will even help you address the enterprise market. But it won't play jazz—that is, it won't improvise. However, it will provide you with the instruments for your own improvisation.

“Customization is the nature of fitting into a complex industry, but we want to allow others to do the customizing,” Desch said. “We've been a custom IT shop for so long. I keep reminding people that we can't keep doing one-offs for customers.”

The biggest change in the new Telcordia is that the company finally has come to the realization that it can't build everything by itself. “That's very important because it is something the market—and their big customers—have been telling them for a long time,” said Whitelock of Stratecast.

Another sign of the new Telcordia: It listens. The NGS platform is built around a growing list of channel, integration and technology partners. Though the list isn't growing as fast as some experts think it should be, it is taking shape to provide Telcordia what it needs to get started in the areas it feels are most critical: expanding into Europe, Asia and South America, offering best-of-suite solutions for service-level management, inventory and mobile IP, and reselling in areas where Telcordia is not licensed to do business.

“We want to expand in Asia Pacific, but we won't put our own footprint there,” said Gerry Dehkes, group senior vice president of channels, partners and alliances for Telcordia. Dehkes' goal is for his group to generate 10% of NGS revenue through its partners and channels. He admits there isn't a big backlog of potential ISV partners, but the company did say it would explore a more active merger and acquisition strategy.

Telcordia isn't just trying to partner more—it's trying to change the way it partners. The company has instituted a value delivery system that is meant to distribute products and services in the manner customers want to buy them. It also governs the relationship between partners and sets expectations for each partner up front to eliminate confusion and especially the appearance of such to the customer.

“Customers can see through that right away,” said Joe Cronin, director of IBM's global telecom business. “If we say we are partners and are sitting on opposite sides of the room not talking to each other, they wonder what kind of partnership that is.”

Cronin is responsible for IBM's alliances and business partners, among which Telcordia is key. Telcordia is expected to help with IBM's push into the telecom back office. In turn, IBM is critical to Telcordia's push into international markets and—dare we say it?—into the enterprise.

IBM and Telcordia have been partners for about a decade, but the partnership has grown over the last year into something more substantial. Cronin admits that both parties stumbled somewhat in the beginning before they came to understand each other's cultures and expectations. “Telcordia had a captive audience in the RBOCs and they were a little stuffy, just like IBM was a little stuffy,” Cronin said. “But they have become much more open and flexible in the last couple of years.” He gives much of the credit for that to Desch. “I think you will agree that he is looking at things a lot differently than his predecessors have,” Cronin said.

But Dehkes knows a thing or two about partnering himself. He came from Lucent Technologies, where he was vice president of strategic alliances. “Telcordia's commitment to partnering is why I came here,” he said.

Telcordia can point to several contract wins that are due in large part to its partners, including doing business for SBC Communications with Micromuse, for Telecom Italia with Granite Systems and for MM02 and Deutsche Telecom through IBM. Some of the newer partnerships include Atreus Systems (service fulfillment), ESRI (mapping), CoManage and Sheer Networks (discovery, reconciliation and activation) and i2 (supply chain).

Partnerships will also be a key part of the growth Telcordia is seeking in wireless and other up-and-coming markets. Driving that growth is another Lucent alum, Teresa Vega, who now oversees Telcordia's wireless, cable and emerging markets business. Like her boss, Vega built a reputation, in part, with the bricks of wireless infrastructure. She was largely responsible for doing for Lucent what Desch did for Nortel—helping grow its substantial wireless infrastructure business into something substantially larger.

As head of wireless and emerging markets, Vega will have an even bigger challenge than her colleagues in NGS. However, having Telcordia's foot in the door with an 85% market share in wireless number portability solutions should get her off to a good start.

Vega is in a different world now, and it's clear that she learned during her tenure at Lucent how to insulate herself from adopting or emanating a wireline mentality. “The worst thing you can do to grow in the wireless market is to go to an operator and say, ‘Here is all the great stuff we do in landline,’” she said.

Vega will push her unit to focus first on corporate data services, which Telcordia says will grow from $50.2 billion worldwide to $150.1 billion by 2007. “There will be a lot of teenagers pushing photos around, but corporate data services will be the biggest area of growth,” Vega said. “So the real measure for mobile operators is to what extent they can move beyond voice.”

And the real measure for Telcordia may be how well it can leverage the work of its Applied Research group to develop the solutions and systems it will need. Vega points to the group's transmission study work that led to smaller cells, the development of low-cost antennas, advancing PCS standards and field demonstrations of dynamic per-cell load shifting in CDMA and 1XRTT networks as examples of some of its unsung contributions to wireless.

“Despite the fact that we haven't been a big player in wireless, the Applied Research group has done a lot of work—it just hasn't been leveraged,” Vega said.

Vega also maintained that growth in the emerging markets sector can't all be done organically: “We will also do it through M&A,” she said. If that happens, Telcordia also may be able to acquire more of the new wireless talent it requires.

Telcordia's wireless focus won't be all OSS software, either. The company plans to be a leader in wireless service platforms as well, exploiting its ISCP service creation platform, which is currently deployed by 12 customers in 11 countries. Vega says the platform still needs a little work with regards to redundancy and pre-pay support. Those and other capabilities such as a third-party service gateway and VPN services, along with a price point meant for attracting smaller operators, are all in the three- to 18-month roadmap.

Leading the cadre of expected new wireless products are Telcordia's Auto RF Optimization and Mobile Assurance. Auto RF is designed to improve coverage and capacity in part by allowing dynamic remote asynchronous node configuration and an ability to match RF capacity to traffic demand. Tests so far show a 20% efficiency improvement.

Mobile Assurance measures and monitors performance and processes from a user perspective, including IP-based services and applications from the operator, third-party applications and servers, and devices.

Perhaps, in wireless, Telcordia will focus most intensely on the area of service assurance, particularly as wireless carriers work their way deeper into the corporate enterprise sector. It is there where the vendor sees the most expansive prospects and the most opportunity to prove that Telcordia is dedicated to helping carriers fix snags they may have yet to encounter or not even realize they have.

“We want to help them solve new problems, and wireless service level management and service assurance are the most important new problems,” Desch said.

Telcordia's Applied Research group holds 1400 patents. Its work has helped lead to the deployment of technologies such as ADSL, ATM, frame relay and Sonet, and has created more than 850 software products, said Dave Sincoskie, group senior vice president of Network Systems Research. And it is not the same as Bell Labs.

Contrary to some perceptions of research folks being a bit cloistered, the people who work for Telcordia's Applied Research group seem to be among the company's most enthusiastic. Maybe it's the new company direction, maybe it's the leadership. But when a crowd of them gathers quietly in the back of a room just to hear their boss give a presentation, one gets the feeling they have always been that way.

Sincoskie said his is a nontraditional research organization. It helps, he said, to be externally focused and (mostly) internally funded. The external focus provides the opportunity to do research on other people's dime, such as for government projects, but, along with the group's matrix management style, gives research people what they need: the ability to work on a variety of projects and explore the commercial viability of new technologies. The internal funding allows them to develop patented technology and enhance Telcordia's products.

“The reorganization of the company has made it cleaner and easier to work with other groups, especially wireless systems,” Sincoskie said.

Given that much of today's communications technology has its origins in the military, Telcordia's AR group is well positioned to be on the cutting edge. The group manages the Lab for Telecommunications Sciences for the National Security Agency, the Collaborative Technology Alliance for the U.S. Army and various other combat communications research projects. The reorganization has made it possible for software development people to move among the groups as well as Telcordia's traditional telecom projects.

About his group, Sincoskie echoes a refrain Matt Desch uses to explain the most significant difference about the new Telcordia: “Similar culture. Different business model.”

Perhaps the most significant difference in that new business model, in Telcordia's view, is Telcordia's ability to alter the way it is perceived: as a forward-thinking, flexible, open, growth-oriented company rather than one that's stuck on past issues, constantly retooling legacy systems and never truly moving forward.

“Some competitors say, ‘We are the next Telcordia,’” Desch said. “Heck, I hope they are, because I don't want to be the next Telcordia.”


The culture question

Matt Desch, CEO of Telcordia Technologies, doesn't think the changes he set in motion at the company constitute a cultural overhaul.

“The whole concept of a culture change is overblown,” Desch said. “I don't think it's a cultural change—it's a business change.”

Desch's opinion is based, perhaps, on the definition of “culture.” If the term is considered with new economy connotations, then he's right—there has not been a cultural transformation at the company. There are no sock-footed, foosball-playing dot-commers roaming the halls of Telcordia. Those halls are long, sparse and narrow, lined on both sides with little offices occupied by lots of people doing lots of complicated, esoteric work. Telcordia is a big, venerable old engineering company, and despite the radical changes that have occurred on Desch's watch, it still has that feel.

But as Desch himself will tell you, those are not the characteristics of the company he wanted to change. On the contrary, he took the CEO job at Telcordia last July largely because of the company's scale and scope—because he believed that with some changes, Telcordia could grow even larger and dominate the telecom network software sector.

And Desch doesn't define culture in that new economy way. Instead, he sees it from a strategic viewpoint, relating culture more to how organizations change in changing business environments. “Culture isn't related to the way people think or act,” he said. “It has to do with the business model. All we had to do was define the problem differently.”

To do that, Desch said, Telcordia had to make its products more universally applicable rather than customizing them to the whims of its core customer market, the RBOCs. It wasn't that Telcordia was too sluggish, complacent and legacy-minded to adapt nimbly to a faster-paced telecom industry, he said, but rather that it was trying too hard to remain at the mercy of its longtime core constituency.

“People aren't slow here—they aren't passive,” Desch said. “The problem was they wanted to respond to every aspect of the problem.”

Mark Effinger, Telcordia's corporate vice president of global engineering, said the old Telcordia way was heavily influenced by the need to be on the same wavelengths with its biggest customers.

“The dynamics and culture of the company are a function of the companies we serve,” Effinger said. “If we had been too hip, the 75% of us serving the RBOCs would be at odds with the customers.”

Effinger has perhaps one of the best vantage points from which to judge cultural shifts: He has worked for the company for nearly 20 years. And by his assessment, the way the company has changed under Desch's leadership—culture or not—is significant. “It was totally reinvigorating at a time when it wasn't clear where we were going,” Effinger said.

In the end, semantics about what culture is and isn't are somewhat irrelevant—or at least take a back seat to one of the most important measures of any company's success. Said Desch, “We have happier customers now than we've ever had.”
—Jason Meyers

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Elementive schooling

Patrick Joggerst has been around the world many times during his stints with AT&T, Global Crossing and PrimeCo. Now, as senior vice president of global sales and marketing for Telcordia Technologies, he will travel the globe once more, carrying with him the message of a new Telcordia.

For those in Joggerst's international audience, the idea of a new Telcordia takes on a different meaning than it does in the U.S., since not everyone on the other side of the ponds or the Gulf is familiar with the old Telcordia. “It is important when you are working overseas that you first sell your company,” Joggerst said. “People have to know what your company is about and what you stand for.”

Joggerst will be emphasizing Telcordia's heritage of strong technical leadership, which he says plays well. “We will sell our technical prowess, the heritage, the expertise and the fact that we have an Applied Research organization that still does fundamental research and brings the benefit of that research to our customers,” he said. However, the message must not be too complicated. “That's why we like the concept of Elementive.”

Elementive. That's the buzzword. The one word that describes a new philosophy, a new business model and a new product set. It's the one you will see sprawled across billboards and airport terminals. Buses? Maybe not.

“Obviously it's a made-up word, but it expresses the idea that this is elemental,” Joggerst said. “It's fundamental. It is a back-to-basics approach that says any company that really wants to get synergies going across their business has to start looking at operating support systems. And they don't have to be thinking big just because it's Telcordia.”

It also expresses Telcordia's product-specific message of openness: “We have a broad range of products, we have decoupled them and we have pre-integrated with partners, so you don't have to rely on a system integrator anymore,” Joggerst said.

And for the domestic market?

“It's critical we don't ignore the fact that we have four very large and important customers in the RBOCs,” Joggerst said. “We must make them understand that the things we are doing are truly unique and unique to Telcordia, and that they know we are much more open with regards to interfaces and working more collaboratively on the core systems that are still at the heart of their networks.”

Elementive enough.
—Tim McElligott

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