Disrupting Telecoms - Norwood Systems Company Story

Invention and entrepreneurship are in the blood for Paul Ostergaard. Paul’s start-up company, Norwood Systems, is named after his grandfather, Arthur Norwood, who invented processes for extracting gold and silver from ore bodies in the 1940s.

The first incarnation of Norwood Systems listed on the ASX in 2001 with a concept and technology to extend the reach of fixed telephone networks to mobile phones using Bluetooth communication. Instead of leaving a voicemail on the office phone, a caller would be transferred to the recipient’s mobile phone if they were within Bluetooth range.

In the heady days of the dot com boom, Norwood was wildly successful, winning the first ever tender for a large telco company to supply dual-mode converged telephony. Norwood was ranked by Time Magazine as one of Europe’s hottest tech firms in 2001 and 2002.

Norwood partnered with a major handset vendor to commercialise their technology but the idea conflicted with the financial interests of the mobile carriers who preferred to carry the call over their networks (and charge for them). The project foundered and Paul sold the company in 2004.

The Apple iPhone launch in 2007 changed the balance of power. For the first time consumers could choose their own phone services via the app store and the position of mobile carriers changed to merely transporting the data.

Paul saw another opportunity for his fixed and mobile convergence patents and in 2011, with David Wilson, relaunched Norwood Systems.

Now taking advantage of Wi-Fi instead of Bluetooth, Norwood launched ‘Work Phone’ as a smartphone app that could extend the range of an office phone. When they upgraded this technology to support multiple Wi-Fi networks it was obvious that the technology was applicable far beyond the geography of the office environment.

But Work Phone required modifications to a corporation’s PBX and that was a barrier to fast adoption of the solution. A lighter version was needed and in mid-2015 a consumer app called “World Phone’ was released.

World Phone, offered significantly reduced mobile roaming fees and easy access to local phone numbers while travelling internationally. With more than 4,000,000 downloads, World Phone is a leading app in the Travel category on both the App Store and Google Play. Underpinning World Phone is a federation of high quality fixed Telco networks which carry the voice signals using internet protocol but with high fidelity.

Norwood did not forget its original mission to provide low cost converged telephony for businesses and in 2016, using the lessons from the Word Phone and inspired by the success of ‘Uber for business’, Norwood relaunched a corporate version of World Phone  called 'Corona Cloud', which avoids the need to integrate with a customer's internal telephone exchange (The PBX) but still offers control and manageability of work phone usage regardless of whether its a company or personal phone.

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Company: 

Norwood Systems

Source: Mike Adams conversations with Paul Ostergaard, Steve Tot and Nick Horton

Story Type: Company

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For Story Students:

The Setting: The early 2000's when fixed telephony is being seriously disrupted by mobile telephony

The Complications: A business failure due to entrenched market forces

The Turning Point: New technology that allowed a re-entry

The Resolution: A booming business that is disrupting the Telecommunications industry

The Point of the Story: Get on board with Norwood Systems, you can improve your company's productivity and pay for the improvement with the telecom spend cost savings

Schlumberger in Russia

I think the first time I noticed the power of stories in sales was when I was managing a sales team in Russia for Schlumberger in 2000.

Schlumberger was formed in 1926 when Conrad and Marcel Schlumberger invented a technique to measure the variation of resistivity in oil wells and hence locate the oil. The invention was an instant success and within a few years, Schlumberger deployed their technique all over the world. They revolutionised the Russian oil industry to the extent that a portrait of Conrad Schlumberger was hung in the Oil and Gas Gubkin Institute as a pioneer of Soviet industry.

But the company suffered a huge setback in the 1930s, when Stalin nationalised Schlumberger's assets in Russia.

In the mid-1990s, when Russia was opening up again to western companies after the collapse of the Soviet Union, Schlumberger needed to make a decision whether to re-enter the market. The CEO, was asked how much money he was willing to risk on a Russian re-entry; His answer was “$200 million”.

With that, Schlumberger set about placing senior experts and investing in two of the top six Russian oil companies. The results were startling; using western techniques, the two Russian oil companies doubled production while their competitor’s production fell.

I've told this story many times and heard it re-told by my customers. The story’s effect was remarkable and unmistakable.

The power of stories to capture our attention lies in the narrative journey: the complications, trials and mistakes that expose the hero's vulnerabilities. Without the setback of Stalin's nationalisation, the story would not have the same power.

Today, Schlumberger is a company with revenues of $35 billion, dominating the oil and gas services business - and generating nearly $2 billion per year from Russia alone.

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Company:

Schlumberger

Source: Mike Adams experience and conversations with Schlumberger people in Russia at the time

Reference:

"The Schlumberger Adventure"

, Anne Gruner Schlumberger

Story Type: Company

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For Story Students:

The Setting: Schlumberger in Russia 1930 to present day

The Complications: The company's assets were nationalised by the Russian state

The Turning Point: Schlumberger's successful re-entry into Russia in the 1990s

The Resolution: A massive successful business

The Point of the Story: How an interesting story says more about a company than marketing claims

How to use this Story: We tell this story as an example company Creation story and to illustrate the persuasive power of stories.

Software for Life - The Pronto Story

Pronto Software Managing Director Chad Gates tells the Pronto Story

The seeds for what would become Pronto were planted in 1976 when Dave Nolan formed Prometheus while consulting to an Australian computer hardware manufacturer called CMAD.

By 1983, CMAD was in financial difficulty and its directors decided to sell the ‘non-core’ software division. Dave Nolan purchased the rights to the application and system software and acquired six CMAD software developers as part of the deal.

The software Prometheus acquired was written in an old programming language called COBOL and would only operate on CMAD hardware. The company wanted independence from both hardware and software providers, so set about developing a fourth-generation programming language which was used to rewrite the entire code base into a product called Pronto.

CMAD went out of business but many of their customers continued using Pronto software, and some are still valued Pronto customers today, more than 30 years later.

Over time, customers began using ‘Pronto‘ as the company name and in 2001 the name was officially changed.

By the late 1990’s, Dave Nolan was looking to sell the business and retire. There was a major falling out between directors when Dave accepted what the others considered a very low offer from Sausage Software. However, the deal was accepted and Sausage took ownership in July 1999.

Sausage was an over-hyped ‘dot-com’ business which used its pumped-up valuation to buy ‘real’ companies like Pronto and SMS Management. When the dot-com bubble burst in the year 2000, SMS Management did a reverse takeover of Sausage and set about cleaning the balance sheet. Pronto did not fit SMS's business strategy and was put up for sale by tender.

This was a critical time; there was a risk that Pronto would be subsumed by a competitor or mismanaged to extinction. New CEO David Jackman saw an opportunity for a management buyout, and with a cohort of Pronto staff members and some reseller staff, successfully acquired the company.

There were mixed feelings for the new owners - exhilaration at being in control of their destiny again, and anxiety and concern about the next salary bill and over extended personal finances. Many Pronto staff investors had been advised by their accountants against investing, but put trust in the management team. Their investment has been repaid many times over.

Today Pronto serves over 1600 customers across Asia Pacific with 380 staff. The company has grown at an average rate of 15% per annum. It is a company in control of its destiny and confidently navigating the cycles of the software industry in the best interests of its customers and staff. In 2016, David Jackman retired and Chad Gates took over as CEO.

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Company:

Pronto Software

Source: Mike Adams and Stefan Crisp discussions with early Pronto staffers

Reference:

Story Type: Company Creation

Labels: Control; Change Management; Persistence

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For Story Students:

The Setting: Melbourne from 1976

The Complications: A failing hardware company, changing technology, company sale and a management buyout

The Turning Point: The management buyout in 2002

The Resolution: A stable successful company

The Point of the Story: Pronto has the experience and resources to support its customers through the cycles of the software industry

How to use this Story: Pronto people use flavours of this story to connect with their customers. Its a nice example of a company creation story.