VoIP Blog - Tehrani.com

« May 7, 2008 | Main | May 9, 2008 »

PAETEC: Success Under the Radar

Recently I traveled to San Francisco to PAETEC World, the largest of annual meetings that PAETEC has with its customers. During this cold San Francisco week, over 350 customers and well over 100 PAETEC employees spent a few days in a downtown San Francisco, CA hotel learning, exchanging ideas and networking at evening receptions.

To my knowledge I am the first analyst or reporter ever invited to this event and this fact coupled with my desire to learn more about the company made me jump on a plane to meet with the company's execs and customers.

In a keynote speech there were slides showing how much farther ahead the Company is than the competition in terms of service. At the same time, PAETEC was frank in recognizing they still have room for improvement, admitted their imperfections, and shared their plans for growth. They frankly want to change the dynamics of the industry.

Now let's sit back and think about that for a moment. When was the last time a competitive carrier said they would change the industry? Certainly during the telecom bubble there were hundreds of companies with such lofty dreams. But it is 2008; is such a desire even feasible? Does it even make sense for the company to look at me with a straight face and tell me this?

I sort of expected a punch line at first. But why should this be funny? They've grown every year for the past 10 years. They have already purchased McLeodUSA and USLEC, and they are profitable. I suppose what made it unusual to me is the fact that PAETEC has never had a press briefing with me or virtually anyone else on the TMC team over the years. I have met with some company executives in the past of course but not the traditional phone call and/or meetings about news.

But despite the company's shyness, the more I learned about PAETEC the more I began to understand why they have tremendous potential.

Vision

The first may be their vision, or maybe ambition says it better. They want to be a trusted advisor with unmatched service for business-class data and voice communications. And they want to be the premier alternative to the ILECs for businesses, nationally.
Corporate Values

PAETEC's stated mission is to be the most customer- and employee-oriented communications provider. To that end, they have four corporate values they follow with near-religious zeal: 1.) Caring culture, 2.) Open communication, 3.) Unmatched service and 4.) Personalized solutions. If satisfied employees lead to satisfied customers, PAETEC's bigger ambitions might just be within their grasp.

Corporate Culture

Picture a high-energy, entrepreneurial organization with a leader who is proud but humble, sharp as a tack and not afraid to use humor in his management style. I am referring to Arunas Chesonis the Chairman and CEO of the company.

Broad Product Line

The company has a number of product categories which focus on data and voice services in addition to reselling PBXs and routers, data center solutions, fixed wireless, telecom expense management application suite, and Allworx, which makes award-winning IP-PBXs and peripheral products for small to mid-sized companies.

Customer Focus

Rarely have I seen such a customer focus at a service provider. There is a relentless pursuit of quality at PAETEC. Customers tell me they are proactively notified if there is a problem and they are given refunds if PAETEC makes a mistake. This is in contrast to incumbents who can make you sign complex legal disclaimers even if the mistake is theirs.

As large as the company has become it is obvious the founders are tight -- as if they came back from a military battle where they had to watch each other's backs.

The formation of the Company taught PAETEC how to treat companies they acquire and moreover the company was smart enough to keep brands like Allworx separate to ensure they don't lose name recognition. I have often written about how many companies put ego first and change the names of companies they acquire and in the process lose millions of dollars worth of brand recognition. Nothing makes less sense to me than killing successful brands to satisfy a corporate ego.

Another division acquired eight years ago is PINNACLE, a company you may consider to be in the telecom expense management (TEM) space. But they really do much more as the company's software and services really manage the lifecycle of equipment and services companies utilize.

The latest version, V6 has a very slick user interface, a great search utility and a focus on making the design easy to use for people who more or less live in the program. It is also web-based and does not require any browser buttons to operate efficiently.

In my discussions with company execs it became apparent they believe the quick hit a company gets from discovering billing errors via TEM software is short-lived and by reducing the time it takes to find important data and streamlining communications between systems, companies can continue to reduce costs over time.

In other words, TEM is an important part of a holistic management solution.

PINNACLE does an amazing job of managing telecom and related equipment and services and I was surprised that I hadn't heard more from the company in the past.

And therein is the interesting part of my time with the various PAETEC divisions. The company has the infrastructure and cost management controls in place to become ever larger. They have savvy business leaders at the top if the organization and a relentless focus on quality and customer satisfaction.

What some may say they lack is awareness in the market. The company is an anomaly because generally companies with virtually no well-known brands don't do so well. In this case however I believe the relentless focus on customer satisfaction has led to very low churn levels and higher than average customer recommendation levels.

Couple this with the fact that many of the company's customers explain just how the telecom duopoly is getting worse as AT&T and Verizon are still trying to digest disparate provisioning and billing systems and this digestion is adding to their TCO levels. These customers really want more competition.

Many Fortune 500 IT and telecom managers in fact tell me the large carriers have people who want to provide excellent service but the internal controls and politics make this impossible. The systems actually keep customers from getting adequate service levels.

This is why I think PAETEC will be successful in its goal of taking a few more percentage points of market-share from the larger players in the market. While doing this, expect PAETEC to expand into other areas such as mobility management, business intelligence and more. They will be in other countries soon as well. They look for acquisitions that fit within their corporate strategy and make sure they buy companies where there is a very good chance they will get a solid ROI.

Given the state of the telecom market and the desire for customers to have multiple vendors, there is certainly room for a service provider who has an array of services that reach beyond the traditional telco demarcation line. This coupled with the unique customer focus really has me enthused about this company's future.

Will PAETEC change the dynamics of an entire industry and make others like Verizon take notice? Who knows? There are too many unknowns in this market to make such predictions. What I do know is that customers tell me they are sick and tired of the incumbent telcos and they want carriers who care about them. It is tough to imagine how a company with relentless attention to customer detail playing in such a market can do poorly.

| This entry was posted at 6:16 PM. | Comments (2) | TrackBack

Link this | Email this | Leave comment
Trackback URL: PAETEC: Success Under the Radar
Technorati Del.icio.us BoingBoing Slashdot Digg Spurl Furl

Vonage Record Quarter: Jeff Citron Interview

Vonage has done a great job this last quarter --  posting growth numbers in a slower economy. I just had a podcast interview with Jeffrey Citron where he talked about the company's growth rate and the number of new initiatives at the pure-play VoIP service provider.

Citron explains that they are pleased with their financial performance as their revenue was $225 million and this is a 15% increase from the previous year. One great bit of news is that expenses increased and adjusted operating income is now $8 million.

These results were ahead of expectations and in addition to the news on earnings, Citron was proud to explain how well-received his new  products have been. Visual voicemail and unlimited international calling are some of these new items.

Moreover, the company has a new prosumer product and another called Companion which installs on your computer and works in conjunction with your phone service.

Perhaps most importantly, Vonage is becoming a double-play provider by reselling Covad broadband DSL service.

The company seems to be more enthusiastic than I have seen in some time and more importantly they are becoming product-focused once again.

This coupled with the morale boost of better earnings will likely be the catalyst the company needs to carry this momentum towards higher levels of profitability and growth. After all, having a quarter that beats expectations in a slower economy is something the company should be proud of.

You really have to check out the podcast to learn the details.

| This entry was posted at 4:27 PM. | Comments (0) | TrackBack

Link this | Email this | Leave comment
Trackback URL: Vonage Record Quarter: Jeff Citron Interview
Technorati Del.icio.us BoingBoing Slashdot Digg Spurl Furl

SkyFire: The Cure for iPhone Envy

Do you have iPhone envy? I do. In fact, just this past Sunday I walked into the AT&T store and I browsed TMCnet on the iPhone and was blown away at how easy it was to surf on this phone compared to a Windows Mobile 6 device. I then asked if there was a firm ETA on the 3G iPhone (there isn't) and as I walked into the nearby Starbucks with my family I debated with my wife the pros and cons of switching to the Apple device from my HTC 6800 on Verizon.

I was close to deciding to switch to Apple (you already know I hate the soft keyboard) when I received my text message invite to the Skyfire Beta 0.6 release of their new browser. I had heard incredible things about the browser and any improvement over Pocket IE was welcome.

After downloading the new browser, I immediately visited TMCnet as it is a rich site with Flash, Java and all sorts of technologies which can make mobile browsers choke. To my surprise, TMCnet came up almost as fast as it does on a laptop with an EVDO card. This led me to surmise that the browser works with a back-end server handling compression, etc. In fact the limited Beta program reinforces this assumption.

In fact after further review it is apparent that the Skyfire browser is actually a graphics viewer meaning everything in the browser window is just a small graphical version of a browser being rendered elsewhere.

What I like about it is the fact I can immediately see an entire web page. I can then quickly double-tap to zoom into a view where I could read comfortably.

Because the resolution of Microsoft Windows Mobile devices is far inferior to an iPhone's (why?) you cannot read as comfortably on a Windows Mobile 6 device as you can on the one from Apple. The cure for this problem is a technology called SmartFit which ensures text does not scroll so wide that reading it will require you to scroll to the left and right. Basically it limits the margin size on articles and other web text.

The Safari browser on an iPhone allows you to use two fingers to expand and contract the zoom levels of the device. Skyfire allows a rapid double-tap which will zoom in a predetermined amount and you are further able to customize the auto-zoom level.

Perhaps the biggest improvement this browser brings over the version of IE that comes with Windows Mobile 6 is the ability to drag a finger up and down on the screen to focus on different parts of the web page. You no longer need to navigate using arrow keys or anything else. This is the way browsing should work - at least on a touch-screen device.

Another major benefit of this browser is the fact that it has a start page which is actually very useful. There is a page of featured content titled "Info" where Yahoo, Wikipedia and The New York Times occupy the top three spots. Next to this tab is another for Sports, Social, Shop and Media.

The Media tab has sites which work well with the browser and surprisingly YouTube videos look very good on this phone. You certainly won't confuse the quality of these videos with the ones you see on your PC, but they are still very good and obviously your experience will vary depending on connection speed.

You are also able to get last.fm to work meaning you can stream music. But attempts to get Pandora or Slacker to work were not successful. For those of you who are interested, links under the Media tab include Break.com, DailyMotion, Metacafe, Yahoo! Video, Flickr, Veoh, Photobucket and Blogger.

What is compelling however is the two other high level tabs which represent your bookmarks and history. You see these items are synced with the company's servers and you have a login and password which means you can also access this information from any browser.

Another plus is the ability to search from the start page and see results from Google or Yahoo. In addition when using a program like Google Reader and others, the browser does not divulge it is running on a phone and subsequently you get a full screen experience. You do not get the often crippled mobile version of popular websites.

Google Reader becomes very useful when you can approximate desktop viewing in such a fashion.

The problem however is that if you want to forward a link via e-mail, you can't. There is not only no way to forward a link via e-mail, there is also no way to know what URL you are viewing so you can manually cut and paste it to share with others.

Having such a powerful browser with no ability to share links is akin to having a Lamborghini in a parking lot or heavy traffic.

But the good certainly outweighs the bad. For example, another feature the browser offers is help in filling in text fields. Once you click on a dialog box you get a relatively large standard box at the bottom of the phone where you can enter text in a more legible fashion. You can also benefit from Windows Mobile 6 suggested words which come courtesy of the auto-complete function.

My areas of improvement include being able to e-mail web links as mentioned above.

There also needs to be better battery management as the browser has a persistent connection to the server. It is for this reason in fact that the program has an exit button which the company recommends using to conserve power.

In addition, the connection with the server is frequently severed. This could be done intentionally to conserve power but the program requires you to restart it before the connection is reestablished. This action can take five seconds or more.

Obviously it would be great to be able to reconnect to the server without restarting the program and moreover it would be great to have settings which auto-disconnect from the server at a predetermined time to save power. One minute increments would make sense.

I would further have a setting to disable or allow web pages to auto-refresh.

Since the browser is graphical, you aren't able to cut and paste text. To offset this, I suggest a function which allows the zoomed text or even all text on a page to be auto-copied to the clipboard.

It is worth mentioning that the browser is stable but in about twenty or so sessions, it did lock up the phone once. This is a small price to pay and in my experience, Windows Mobile devices tend to lock up even when not running Beta code.

In conclusion, this browser is fantastic. It brings some of the best features of the iPhone Safari browser to the world of Windows Mobile. The ability to take advantage of leading-edge technologies like Flash and others means you can actually use many sites which were previously off limits to mobile browsers.

Speaking of mobile browsers, you will soon be able to use this program on other platforms but to date only Windows Mobile devices in the United States are supported.

I recommend this browser and suggest each download be accompanied by at least one spare battery purchase.

| This entry was posted at 6:04 AM. | Comments (0) | TrackBack

Link this | Email this | Leave comment
Trackback URL: SkyFire: The Cure for iPhone Envy
Technorati Del.icio.us BoingBoing Slashdot Digg Spurl Furl