In the CEO
Spotlight section in Internet Telephonyï¿½ magazine, we recognize the
outstanding work performed by exemplary companies. Each month we bring you
the opinions of the heads of companies leading the Internet telephony
industry now and helping to shape the future of the industry. This month, we
interviewed Nick Branica, President & CEO of Comdial.
IT: What is Comdialï¿½s mission?
NB: Comdialï¿½s mission is to provide innovative and cost-effective
telecommunications solutions to small and medium-sized enterprises (SMEs).
We also recognize that SMEs must support technology choices with solid
IT: What is your vision for Comdial, and how is the company
positioned in the next-generation telecom market?
NB: My vision for Comdial is for the company to continue delivering
leading-edge technologies that drive paradigm shifts in the SME telecom
space. Bringing to market innovations that cost-effectively allow small and
medium-sized enterprises to cross the next-generation telecommunications
chasm has been Comdialï¿½s core competency over the past 25 years. This is the
key to the companyï¿½s success and will remain Comdialï¿½s sole purpose into the
IT: Describe some of the key decisions that you have made as CEO to
steer your company through the recent challenging financial straits.
NB: When I became Comdialï¿½s CEO several years back, the company was
in a very precarious financial position. However, we still maintained a
solid product portfolio, enthusiastic employees, and an industry-leading
channel partner network. The challenge was to optimize operations and
financially restructure Comdial while preserving as many jobs as possible,
sustaining significant R&D investment, and retaining dealer loyalty.
To optimize operations, we streamlined our product offerings by
eliminating product overlap and focusing on our profitable product areas.
While we could do anything, we couldnï¿½t do everything. By focusing on its
product strengths, Comdial was able to maintain significant investment in
key product areas, such as IP telephony.
To remain cost competitive, we made the decision to fundamentally change
the operating expense structure of the company. This involved consolidating
our headquarters operation in Sarasota, FL and outsourcing manufacturing.
This was a difficult decision as it involved a rather large reduction in
force. While everything went as planned, the events of September 11, 2001,
the economic recession, and the failure of our primary
contract-manufacturing partner led to unforeseen production issues. However,
Comdial has overcome these obstacles without compromising product quality.
Despite the benefits of a streamlined product offering and optimized
operations, Comdial was still constrained by a heavy debt burden. We
succeeded in negotiating a dramatic reduction in our financial liabilities
with some new investment. This resulted in a complete financial
restructuring of Comdial. This restructuring provided Comdial with the
capitalization required to aggressively execute our long-term business plan.
By successfully executing on these difficult decisions, Comdial is now in
great shape to compete in the dynamic telecommunications marketplace and has
even managed to complete an important acquisition that strengthens our
technology position and enhances our ability to innovate.
IT: What is the most pressing issue facing our industry today, and
what can be done to alleviate this problem?
NB: The most pressing issue facing telecom customers today is whether
or not IP telephony is really worth the investment and, if so, how can they
preserve their investment in previously installed equipment while migrating
to IP. Technologists will have you think that if you are not supporting IP
telephony today, your company is already behind the technology curve. This
assertion is based on the promise of emerging IP-based voice/data
applications and their associated ï¿½softï¿½ dollar savings. With the latest
economic slowdown, however, enterprises require ï¿½hardï¿½ dollar business cases
to move forward with new technology investment. As such, the killer
applications driving the move to IP telephony in the SME space remain toll
bypass and networking.
IT: Describe your view of the future of the IP telephony industry.
NB: IP telephony has come a long way since the idea of transporting
voice across data lines was first proposed. The industry is overcoming
significant challenges in the areas of quality, standardization, and cost
effectiveness. However, I believe, we are just seeing the tip of the
iceberg. Analysts predict that, at its current 30 percent annual growth
rate, IP telephony will overtake TDM around 2006.
I believe that all voice calls will be made over packet switched networks
at some point in time. IP technology holds the promise of increased
functionality, lower product cost, reduced maintenance costs, simplified
installation, and many more benefits.
IT: What is your philosophy regarding customers?
NB: Comdialï¿½s philosophy is that customers are for life, and we have
designed our company with this philosophy in mind. We are about more than
just providing customers with products, but providing them with business
tools to help them increase their productivity and profitability.
To The July 2003 Table Of Contents ]