MetaSolv Emerges from a Successful Transformation

A Pipeline Q&A with MetaSolv President and CEO Curtis Holmes

By Edward J. Finegold

For this month's Pipeline Q&A, Editor Ed Finegold sat down with T. Curtis Holmes, President and CEO, MetaSolv Software. In this one-on-one interview, Holmes explains how this once CLEC- and US-focused software vendor leveraged telecom's dark times to become a global technology partner to some of the world's largest communications operators.

Pipeline: Curtis, when you have 30 seconds or less to tell service providers the main difference between MetaSolv and other OSS players, what do you say?

Holmes: I think the main thing that differentiates MetaSolv is that it is focused on being a strategic partner for its customers. It's also our proven experience; product scale and reliability; and an intense focus on serving customers.

The key is having strategic partnerships with our customers. Service providers are moving away from trying to find who has the technology to fix a specific problem, and moving toward working with partners who will be there for them in the long term. They're asking which company understands our business, can bring talent to the table, and can help us reach our business goals?' We believe we do that better than anybody in the space.

Pipeline: You've helped to see MetaSolv through some massive changes in the past three years. As the dust settles and recovery begins, what will it take to make MetaSolv profitable for the long term?

Holmes: In 2001 we put together a well-defined strategy to address just this point, and we realized we had to take three critical steps. First, we had to globalize the business. It was North America-centric and CLEC focused. We said, 'this needs to be a global company from product, customer, people and revenue perspectives.' Second, we needed to shift our customer base from primarily CLECs to large Tier 1 carriers around the world. Third, we needed to focus on next-generation services, with specific focus on mobility or wireless - and IP-based services.

Now, we did not have a clue back in 2001 that the industry would turn quite the way it did. We, and everyone we spoke with about it, didn't think [the downturn] would be as bad as it was for as long as it was. However, during the past three years what we've done is to execute on our strategy, and we've done this mainly through two strategic acquisitions. We changed our company.

We formed a team called project Accelerate - to accelerate the transformation of the company. When we went to do the Nortel/Architel acquisition, we talked to the customers, looked at the products, and realized that if we pulled off this transaction, we would be able to pull off our transition very rapidly.

What that acquisition has allowed us to do was go from having 10 percent of our revenue coming from outside the US to more than 50 percent coming from outside. In 2001, CLECs represented two-thirds of our customer base. At the end of 2003, two-thirds of our customers were global service providers and only one-third were CLECs, so we switched it around completely. CLECs are still very important to us, but we recognized that for us to survive and eventually thrive, we had to transform the customer base. Further, in 2001 only 3 percent of our revenue came from mobile carriers, but today 23 percent of our revenue comes from mobile.

We believe we've now put all the pieces of the puzzle in place - the strongest customer base; products that are tested, proven and scalable; and we have the talent from our acquisitions and that we've hired from the marketplace. Most importantly, we have a stabilizing market that will allow us to reach profitability and sustain it.

If you look at what [the industry] went through from 2001 to 2003, it was unprecedented. No one had seen anything like it in telecom. Now we're battle tested; we have the scars, and have a leadership team now that's better prepared, more proactive, and that has the talent to prevent us from getting into the situation we were in before.

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