A conversation with Telcordia's Matt Desch

Telcordia Technologies’ journey to transform itself into a product and services company is entering its second year. The journey continues, but the company has come along way and is beginning to gain converts among skeptics. This week, Telcordia announced several new products and even more new customers. CEO Matt Desch talked to Tim McElligott about his company’s Elementive campaign, its burgeoning relationship with parent company SAIC and the success of the risky price reduction scheme introduced last year.

On the Elementive campaign: "Elementive was never thought of as just a marketing campaign. We didn’t say, 'Let’s create a marketing campaign.’ We’re a very different company than we were a year ago. We are radically different. We have told our customers that, but we asked ourselves how could we tell the world how we are different. So we had to ask ourselves how different we really were. And we came up with the idea that we have completely evolved for being this proprietary, monolithic suite of products. It started snowballing form there. At that point, about a year ago, we were getting pushed hard by people like Verizon, who helped us become more open and fast-moving than we were. Even then we didn’t go nearly as far as we should have gone. Now we have. And Elementive has become a language internally. Its not just a marketing term--it defines how we do what we do. People ask themselves, 'Are we doing this in an Elementive way?'"

On the transformation to a product company and the role of one-off projects: "While I am trying to get to a product methodology, from projects to product--and everything you have heard [this week] was about products--we still solve unique problems. We don’t make announcements about the great projects we do, because we implement these projects with products. Say SBC has a unique problem; we are still finding solutions for that problem. Then maybe we put those on the shelf and invest in them and find out that another carrier really wants it. So it becomes a product. We used to provide [a yearly set] of features for our core products that were part of our maintenance model. That wasn’t very efficient, so we blew that model up. We began selling enhancements outside of maintenance and developed business cases for every one. Carriers liked that approach. That way they only bought what they wanted. I think at one point we were not investing as much in core systems because we were putting all our money into next generation systems. But now we are investing in both. It’s the right thing to do for our customers and the smarter thing to do from a business perspective."

On the growing relationship between Telcordia and its parent company SAIC: "We are a wholly owned subsidiary, as you know, but in the last six months the relationship itself has changed. We were sort of an outpost, a unique company with a different business model in a different industry, so we were independent and outside of the mix of SAIC. [New SAIC CEO] Ken Dahlberg is a very collaborative, strategic guy who gets involved in the strategy of where we are going. Now we are a full member of the SAIC team. There is the federal space, the commercial space and Telcordia. It’s interesting that our business unit presidents like [Wireless, Cable & Emerging Markets president] Terry Vega and [Operations and Network Solutions president] Steve Chappell now meet with the president of the intelligence business or with the aircraft carrier maintenance group. Ken is really committed to bringing the whole team together. Besides, there are an awful lot of synergies we are getting now with SAIC that we wouldn’t have a year or two ago. We are putting products together for defense and commercial customers and bringing in some of their technology and resources. It is a much more strategic relationship."

On the 30% price reduction to RBOCs on core systems: "When I announced that, there was a little hard swallowing [going on.] Could I afford it? Would it be received well? The worst thing would have been committing to reducing my prices and customers didn’t see the value in it. But I believe it has been extremely well received. I think our relationship in the last four-to-six months with every carrier has improved dramatically. We have a much more strategic relationship now and are working on problems together. We are at the heart of their core initiatives and helping them reach their goals of massive cost reduction and massive service introduction. As a result of the [price-cutting] initiative, there was probably a little skepticism at first, but now that we have added our Elementive CE [continuing evolution] platform, I believe they are pleased with the results."

Send e-mail to tmcelligott@primediabusiness.com