Pipeline Q&A: Synchronoss (cont'd)

Pipeline: If I’m a massive carrier, why should I trust critical operations to a smaller company like yours? Why can you run a carrier’s operations better than it can run them itself?

Waldis: One of the points we are able to prove – if you go back to who we are – we are so focused on service fulfillment. Take any major carrier – they all have different flavors of VPN with different brand names – but basically the order is the same and we are so focused on the process that we can take that efficiency and scale. We go to our service providers and say ‘this is all we do for a living’ and that helps them answer ‘why Synchronoss?’

If you look at people that have been successful in software as a service there's two elements – they are attacking a specific problem and doing it in a narrow and deep way from a business process level. We transform orders into customers as fast and as well as possible.

They also manage that whole end-to-end process, and owning our own data center is a critical differentiator. We've not only built our own software, we have process engineers that bring our experiences back into our software, and we run our own data center so we have total control. If you look at a (service like) salesforce.com, they run their own data center as well. We're solving a business problem not a technology problem and we own the whole value chain, all under one roof. That gives us the confidence to walk in and offer these SLAs that are not common in the marketplace today.

Pipeline: With so much outsourcing being done offshore, why would a carrier keep certain processes closer to home with a company like yours, as opposed to sending that work to India, for example?

Waldis: From our perspective we use Canadian and Indian resources as well, but that kind of outsourcing from a labor point of view is an interim solution. If you’re looking at getting cheaper labor overseas, you’re missing the big picture. We want to automate [fulfillment processes] so the human intervention and manual touch points are eliminated. If you’re just trying to get like-for-like cheaper, we’re not the answer. But if you want something that scales and gives you tremendous volume and efficiency per gross add, that’s where we can help.

Pipeline: Given that you provide the back office capabilities for large carriers’ enterprise telecom management offerings, where do you see this business headed, and how are IP and Ethernet-based services affecting it?

Waldis: We’re coming at it from wireline roots, so the growth we’ve had has been from two areas – one is wireless, the other is IP. The future of telecom is definitely a wireless one, a mobile one. Blackberrys are phones, etc. Wifi and new technologies emerge and get more secure and reliable and that adds transactions and value added services. It creates more customer demand for services, and our software plays a major role in fulfilling those transactions.

The same would hold true with IP and Ethernet-based services because as VoIP gets deployed more, the truth is business customers are deploying it for mission critical apps. VoIP has a great cost structure, but as a business customer you need a gold service, so we're seeing a lot of classes of service being deployed. The future is in that area and we want to be the provider that the big guys look to in order to enable those services.

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