MATT DESCH, TELCORDIA TECHNOLOGIES

There is arrogance, and then there is confidence. Telcordia Technologies CEO Matt Desch has plenty of the latter and is using it to expunge the former — even just the perception of it — out of Telcordia Technologies. Desch is not so much positioning his newly adopted company for a turnaround as he is positioning it for a new way of life. He is preparing for a future far less dramatic and far less crowded than today — a future consistent with the technological and business realities of 2003 and beyond.

Since taking the helm of Telcordia last July, Desch has driven the transformation of the company into what he calls a more fast-moving, responsive, market-savvy, open and cost-effective competitor and partner — just what the analysts have called for. Yes, there have been dramatic work force reductions, but Desch bristles at the suggestion that Telcordia has eroded too much of its technical edge.

“We have added more business and market expertise in wireless in the last four months than in the last five years.” he said. “I have more experienced people in IP today by an order of magnitude, and more international expertise. I feel very good about the growth in expertise since I've been here.”

Not coincidentally, these areas — wireless, IP and international markets — are areas in which Desch feels the company needs to grow. In his 13 years at Nortel Networks prior to joining Telcordia, Desch proved he could expand a company. He grew Nortel's wireless solutions division from a $1 billion business to one worth more than $4.5 billion.

Telcordia has made no cuts in R&D and none in supporting its strategic direction, and Desch is concerned with companies that are going into hibernation mode.

“Doing nothing and expending as little cash and effort as possible is a survival strategy. It doesn't mean you are going to thrive when times get good again,” he said.

Desch added that market conditions and mindsets left over from the late 1990s are not conducive to growth. “There is still too much competition and too much dumb money on the sidelines wanting to invest in ideas or companies that should be let go,” Desch said. He added that Chapter 11 laws in the U.S. are prolonging the telecom industry's recovery by forestalling the consolidation necessary for re-creating a vibrant environment.

“A couple years ago I thought this would be a brush fire that cleared out the dead wood,” Desch said. “But the fire's been raging, and very little of the dead wood has gone away. I'm not sure the forest will be healthier as a result.”

To get healthy, the industry needs to learn how to grow again, he said. “There are sparks that create interest and hope, such as Wi-Fi, metro and residential optical and wireless data, but they really aren't in themselves reason for hope. They are modest growth areas, and the investment of resources, time and money needs to be commensurate with the payoff that will occur.”

With that in mind, Telcordia is betting on wireless, and it still sees potential in softswitching. “But the circuit-to-packet transformation will happen gradually, carefully and in a measured way. We want to make sure we time our investments and actions accordingly.”