I have been following with interest the articles, comments and tweets around Kevin DeNuccio's appointment as Metaswitch CEO. Among the uninformed noise there is some good debate going on about what this means for Metaswitch.
One of the more thoughtful commentaries was from Jon Arnold, who correctly notes that this is "another step along the way to deepen their management team, and position the company for continued, global growth".
He then goes on to admit that he is "still not entirely sure why this move is happening and why now". I suspect he is not alone, as for many this will have come as a bit of a surprise.
So for Jon and everyone else, let me try to give some insight into the thought process at the senior management level (with apologies for the somewhat introspective nature of this post!)
- First, some context: it took Metaswitch 23 years to reach $50 million in revenue. It took just three years from then, in 2007, to double that to $100 million.
- Then came the recession of 08/09. Our main priority during this period was to hunker down and focus on the fundamentals -- maintaining our existing business and staying profitable. We are proud that we managed this, even growing slightly, over the last financial year (through August).
- As tends to happen in tough economic times, the status quo of the industry was
being disrupted: past competitors were struggling or going away completely, and as the economy started to turn around, our
relative position in the market was much stronger. Carriers were being threatened by the likes of Google, and it became clearer than ever that there was a dearth of innovation in the industry. We, on the other hand, had continued investing heavily in R&D, grown the team, and signed more customers (we recently announced our 500th carrier and 250th OEM customer).
- We therefore spent the early months of this fiscal year reviewing how we could best capitalize on these strengths. We identified several key challenges: (1) scaling our business and organization globally, building on our established presence in North America, (2) the need to continue investing in R&D to broaden our product set, and (3) building the management and organizational strength to achieve (1) and (2) while continuing to stay stable, supporting our existing customers, and without jeopardizing our unique strong culture.
- John Lazar, who has dedicated more than 20 years of his career to Metaswitch and led our carrier systems division through last year and the company for the last 12 months, drove this process. His view, supported by the executive team and the board, was that we needed a CEO who brought experience of scaling a company the way we envisaged. Geography was also an issue - John had already moved his family from the UK to California and back, and was not sure he could commit to the amount of travel required to manage this global business, with nearly a third of its people and four-fifths of its revenues in North America, from London.
- Since Kevin had been on our board since late-2008, we already knew and respected him, and he had been looking for the "next big thing" -- and thought Metaswitch could very well be it. His track record -- having run everything from startups to multi-billion dollar businesses -- speaks for itself. And the timing just worked out perfectly for us and him. The fact that John remained committed as chairman to ensure a smooth transition and ongoing cultural integrity sealed the deal.
So there's the sequence of events, and the progression of our thinking. In retrospect, this is just a logical next step -- albeit a very visible one -- along a path that we have been talking about for some time.
Among the employees, there is a lot of excitement about this move. Having worked closely with Kevin over recent weeks, I can attest to not just his razor-sharp strategic thinking, but also his sensitivity to the culture he is inheriting. While no doubt there will be changes -- no successful organization can ever stand still -- the fundamentals will stay the same: quality engineering, reliability, exceptional support and innovation.
