Telecom veteran takes over Natural Convergence

The new CEO of an Ottawa maker of hosted voice over IP software for carriers is familiar with the company – he’s been the chairman for several years after having helped Canadian telecom entrepreneur Terry Matthews invest in the firm.

Patrick Smith assumed the head post at Natural Convergence last month after co-founder and chief executive officer David Cork suddenly decided to leave the firm.

Cork “had some personal objectives” he wanted to achieve, Smith said in an interview. The departure was not due to a disagreement over the company’s strategy, he added.

The company’s main product, Silhouette, gives carriers, service providers and ISPs a way to offer hosted VoIP service to companies – or branches – with up to 50 employees. Among its Canadian customers are Rogers Communications and Ottawa’s BluArc Communications.

Until recently Natural Convergence sold Silhouette either through its own sales staff or through partners such as equipment maker Mitel Networks. Sales were even between the two channels. However, Smith said that several months ago the company realized that large carriers prefer buying direct and decided to emphasize in-house sales. As a result it overhauled its sales staff, hiring Bill Crank from Avaya to be its president and executive vice-president of sales, marketing and business development. Crank has held senior sales positions at a number of wireless and telecom companies.

“The margins in selling direct are better,” Smith explained, as well as the speed in which deals are closed.

Smith has some 24 years of experience in the telecommunications industry, including holding senior management positions at U.S. carrier Sprint. But lately he’s been removed from day to day operations of companies he’s involved in. Instead he divides his time between Matthews’ venture capital company Wesley Clover, where he’s chairman of the executive advisory board, Montreal mobile chipset designer Wavesat, where he’s executive chairman, and Natural Convergence. He’s chaired its board since Wesley Cover invested in it four years ago.

Becoming a CEO at this stage of his life was “a little unexpected,” he admitted. But, he added, he plans to stay “indefinitely.”

Among his goals is “to take the progress we’ve made in the past few weeks in positioning ourselves more effectively with larger carriers, and having their [VoIP] launches occur more quickly, therefore drive more [end user] licences.” A year ago the company said it had sold more than 20,000 licences.

The company is on track to deliver its next release of the software in November, which will include features such as automatic call distribution (ACD), which Smith described as giving customers a mini-call centre capability.

Although founded in 2001, Natural Convergence has only 27 provider customers, mostly in the U.S. Only three are Canadian. “The Canadian market doesn’t have the same competitive issues as the U.S. market does,” said Smith. “Canadian carriers haven’t felt the need to move as rapidly. I would suspect that may change this year.”

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