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February 09, 2010

With New CEO, Metaswitch Looks Ahead 35 Years

By Marisa Torrieri, TMCnet Editor

Advanced carrier services provider Metaswitch Networks, in the last year, has made a number of moves to shift the direction of its telecommunications business. In the fall, the company changed its name from the moniker “MetaSwitch (News - Alert).” And just last week, Metaswitch announced that industry guru Kevin DeNuccio (News - Alert) would take over for John Lazar as CEO (Lazar still will hold the chairman of the Board spot).
In revamping its business, Metaswitch is attempting not just to look ahead to the next generation, but the generation after that.
Or, as Lazar put it during a briefing with analysts and media, “We were looking at, ‘where do we want to be in 35 years time?’ Today, it felt like the right time to position our management team to do that.”
DeNuccio “brings fantastic experience,” Lazar said, emphasizing the incoming CEO’s telecom market experience. “And he understands us as a company.”
DeNuccio comes into the role as an independent director on the board since December 2008. In addition to Metaswitch, he also serves on the boards of SanDisk and Catholic Charities.
A veteran of Redback Networks (now Ericsson), Cisco Systems (News - Alert) and Bell Atlantic (now Verizon), DeNuccio is known for his ability to turn promising early and mid-stage businesses into multi-billion dollar global players, according to Metaswitch.
As Redback’s CEO, eNuccio reportedly oversaw the company’s transformation into the fastest growing edge router vendor and subsequent acquisition for $2.1 billion. And as a senior vice president at Cisco (News - Alert), DeNuccio in four years grew the worldwide service provider division from a $500 million, 500-person organization to a $4 billion organization with 4,000 employees.
During the press briefing, Lazar cleared up any questions as to whether Lazar’s shift out of the CEO role was based on negative performance. Instead, it’s based on the need for a North American geographical focus.
“If you ask the board about my performance, they’d be very happy,” Lazar said. “We need a strong position in North America to take us forward, and as you know I’m based in London.”
According to DeNuccio, one-third of Metaswitch employees are currently in North America, but because of the level of business, “a more heavyweight structure” in North America would be ideal. Still, “this is not us thinking we should move U.K. operations to the United States. The balance of those two is important.”
Rather, a shift in focus to North America will better position Metaswitch to build a global sales force – but the company is not planning on going public.
“We think there’s going to be opportunities for acquisition, given the model we can build,” DeNuccio said.
Over the course of the last decade, DeNuccio said that one of the issues he’s seen in the telecommunications is established vendors with multiple shrinking revenue streams have cut back on R&D, and lost the formula, people and agility to deliver the continuous rapid innovation the industry and carriers need.
“The reality of our opportunity in front of us is to navigate a global expansion, which I’ve been through two times,” DeNuccio said. “You’re going to see us expand geographically, which we’re doing today. We have a very large customer base, and we want to expand our product lines to continue to deliver to that customer base.”

Marisa Torrieri is a TMCnet Web editor, covering IP hardware and mobility, including IP phones, smartphones, fixed-mobile convergence and satellite technology. She also compiles and regularly contributes to TMCnet's gadgets and satellite e-Newsletters. To read more of Marisa's articles, please visit her columnist page.

Edited by Marisa Torrieri

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