If Ed Lavin has learned anything from tackling physical challenges like marathons, and corporate challenges in the telecom sector, it might be this: no matter how fit you are, you’re always at risk. Lavin, CEO of Markham, Ont.-based network services and PBX distribution firm Delphi Solutions Corp., said he keeps his body in top operating order. But despite the healthy lifestyle, a couple of years ago his doctor diagnosed him with clogged arteries, telling the entrepreneur that he needed heart surgery. He went under the knife in the winter of 2001.
“The illustration here is, even though you’re fit, even though you eat the right foods and all the rest, you just never know,” Lavin said during an interview with Network World Canada. Lavin’s company went through something similar. He started the Canadian Telecom Group (CTG), a phone system distributor, in 1980, to capitalize on a newly deregulated PBX market.
And capitalize it did. Revenues hit $1 million in the first four months, he said. In December, 1982 Lavin was featured on the cover of Canadian Business Magazine as the scourge of traditional telecom providers – the headline read “Giving Hell to Bell.” And in 1986 CTG captured the attention of British Telecom (BT), which, in turn, captured CTG by acquisition.
But despite this strong start, the firm needed work come 2000. Then known as Delphi, it was acquired by Cannect Communications Inc., a shaky CLEC. When Cannect filed for bankruptcy in 2001, Delphi became little more than an item on the auction block.
Lavin, who had left CTG soon after BT acquired it, bought back his brainchild and helped reshape Delphi into a lean network services provider, he recalled. After all of the above, Lavin knows about handling risk, and has advice so telecom managers can ensure solid-state communication infrastructure at their companies. What follows are excerpts from a conversation wherein he provided some pointers.
NWC: What’s your opinion of the notion that voice traffic is simply another application that runs on a converged voice-data network?
Lavin: “Voice is not an application. It’s the lifeblood of the company. Without it, you’re out of business. If it’s viewed that way (as an app), it’s cavalier.”
NWC: How should the enterprise evaluate telephony equipment
Lavin: “You certainly don’t want to go out and buy from a company that’s brand new, that hasn’t been in the industry for a long time. Remember, telephony never goes off the air. Computers do. When I look at companies coming out of the computer world – Cisco, 3Com and others – I’m suspect. I know there are going to be difficulties in the early stages….I’m not making some political commentary. But we believe in Nortel. The PBX from Nortel is a derivative of the central office in downtown Toronto. It’s the same thing with Mitel.”
NWC: Delphi is a Nortel and Mitel distributor. You’re biased in favour of those firms.
Lavin: “I could be a distributor for Cisco. I could take 3Com. We’re the largest distributor in the country, so people knock on our door. And I don’t want to close the door on Cisco. I don’t want to say something so aggressive that they hate me. I’m sure at some point we might want to talk. But not right now. We just believe voice is so fundamental, it has to be operating all the time….I can’t go off on a tangent and try a brand new technology.”
NWC: How has the telecom equipment market changed since you started?
Lavin: “Telephone exchanges coming from the factory today are different. They’re not the same old stuff. They are IP enabled, some more so than others. If you look at the shipments coming from Mitel and Nortel…last year probably 25 per cent of all shipments were IP-enabled. Next year it will be in the 30s, and the following year, the 50s, and so on. It’s displacing what was there or upgrading what’s already there. “That creates a far better market than we had in the early days, and it creates a better market than we had during Y2K. There was an urgency then.”
NWC: How have changes in the market affected telecom managers?
Lavin: “In the early days the client went to Bell Canada, and they would get everything. It was installed and operating, and they paid for it. “The client wants that again. They don’t want it in a monopolistic format, and they don’t want prices to be mandated. They want choice. But they want a similar deliverable. It’s a nightmare for users who are not educated in telephony, they’re trying to run a business….They need the equipment. They want equipment that’s good, pricing that’s fair….They don’t have that now.” “Most companies appoint someone: ‘Frank, will you take care of that part? We need phones, network equipment.’ Poor Frank. That’s what we call him at our place….He’s just going to get overwhelmed; it’s just madness. He wants somebody to say, ‘Listen, Frank. Your company is special, the way you operate. We’ll understand that and show you where you are, what you could be.’ And he’ll say, hopefully, ‘Thank you. I