CEO Spotlight

Fonality CEO Shares His 'Magical' Software Story

By Paula Bernier, Executive Editor, TMC  |  March 31, 2016

Fonality (News - Alert) Inc. provides business phone service with integrated collaboration and contact center capabilities. But at its core, Fonality is a software company, says CEO David Scult. This software enables organizations to be more productive, he adds, which can help them grow their businesses. INTERNET TELEPHONY recently touched base with Scult to learn more about his love for water skiing, his interest in software, his life’s journey, and how it led him to where he is now.  

What was life like for you growing up? 

Scult: I never touched a computer in my life until I was 23 years old. I was totally into math and sports. I wasn’t the slightest bit interested in software until I starting working as an analyst for a Wall Street research firm. 

Where did you go to school? 

Scult: I went to college at Wesleyan University, in Middletown, Conn. I went to high school at River Dell (News - Alert) RHS in Oradell, N.J., about 30 minutes outside of NYC.

What were your career goals when you were in college? 

Scult: I studied science in society and architecture. I thought I wanted to be an architect.

How did you get to where you are now?

Scult: At my first job for an architectural firm in Wilkes Barre, Pa., I was introduced to an early CAD system. I thought it would replace my ‘artistic skills’ as an architect, so I decided to pursue a different career after one summer. 

I started working for Wall Street research firm Market Guide and got fascinated with software. I taught myself how to program nights and weekends. Over the next several years, we became more of a software and information services company than a research firm. I continued to develop my passion for great software at several large companies including Lotus, IBM (News - Alert), and Microsoft, and several earlier stage companies including Radnet, Groove, and Fonality in the more than 25 years since.

What excites you most about your job? 

Scult: Two things: Working closely with our customers to see how our software can help them grow their businesses and being surrounded by really smart people (employees, partners, and customers) who are really passionate about their ideas on how best to evolve our products.

What keeps you busy when you’re not working? 

Scult: Spending quality time with my wife, talking with my two grown daughters by phone, mentoring former colleagues who want to pursue entrepreneurial opportunities, golfing, water skiing, pottery, and cooking.

How do your leisure time pursuits reflect who you are and your leadership style? 

Scult: I am very collaborative. As CEO you ultimately have to make some tough decisions. However, most of my leadership style is to listen, learn, and build consensus.

In terms of how my leisure activities influence that style, I love teaching kids how to water ski. It’s something that most kids aren’t exposed to in their normal summer activities. It takes a lot of patience, but when you ultimately succeed at getting them out of the water, they are addicted for life! The same is true with a new hire. He or she may not have had the deep appreciation for how magical software can be.

You previously worked at Microsoft (News - Alert). What did you do there, and what did you learn? 

Scult: I held several positions including general manager Office 365, during which time we launched Office 365. I also served as general manager – Office field and partner marketing, where I aligned corporate office business strategies with the thousands of individuals who marketed Microsoft Office in their local countries. 

Through the school of hard knocks, I learned how to evolve a company from an on-premises $20 billion software and server business to a mission-critical software-as-service provider. This was so helpful in overseeing the transition at Fonality from a traditional PBX (News - Alert) provider to a hosted VoIP service. I also learned a lot about good, better, best packaging and pricing. 

What are some of the biggest shifts you’ve seen in enterprise communications and networking during your 30 years in tech? 

Scult: Before we launched Lotus Notes in 1989, I remember using MCI mail over a 1200-baud modem on a Compaq luggable (12-pound) computer. Most enterprise communications were through interoffice memorandums – snail mail as some referred to it. You would spend a good part of your day going from conference room to conference room.

It’s amazing to see how connected we are today by comparison. Could you imagine what it would be like to not be connected for 24 hours? To not have the ability to hold virtual meetings? Our CFO lives 3,000 miles away and I see him in person maybe twice a year. How times have changed.

What do you consider to be your biggest professional accomplishment?  

Scult: I’m most proud of what I’ve achieved with my Fonality team. We have spent the last four years transitioning from a traditional PBX vendor to a cloud-based, unified communications as a service provider for more than 300,000 users. Almost 90 percent of our revenue now comes from subscriptions. 

We’ve done that by becoming a trusted advisor to customers. We improved from a monthly churn rate of almost 4 percent to less than 1.4 percent. Such a seismic shift takes an entire company. It’s truly a cultural change, to think of walking in our customers’ shoes as opposed to selling them a product or service.  


What are your goals for Fonality going forward?  

Scult: We are very proud of our customer retention. However, I want to challenge the entire company to get our churn number under 1 percent. This one metric embodies the behaviors we – and our customers – value. We have a mantra that it is everyone’s job at Fonality to delight our customers. No customer is too small to listen to, and we pride ourselves in trying to address any issues that they might have.

Edited by Maurice Nagle