Double act shows way in telecoms

FRIDAY INTERVIEW:Openet founders Niall Norton and Joe Hogan

‘WE LIVE our lives at 35,000 feet,” says Joe Hogan, one half of the technology and business duo that runs Openet, the relatively low- key Irish software company which employs 840 staff and could have revenues of about €100 million this year.

Hogan is chief technology officer at the company he founded in a tiny basement office in Dublin’s Fitzwilliam Square back in 1999. Both he and chief executive Niall Norton spend the bulk of their time on the road visiting customers like ATT, Orange, Verizon, Vodafone and Turkcell, and convincing more telecoms operators to sign up. The company’s software is used by customers in 29 countries and the software runs in 32 different jurisdictions.

“We live weird lives, it’s not a normal nine-to-five existence,” says Hogan. He might get an e-mail from Norton at 1.30am to see if he’s awake and the pair will talk for half an hour when they are on different sides of the world.

It sounds like an all-encompassing job but their commitment seems to be paying off. The pair got mainstream recognition by recently winning the Ernst Young Entrepreneur of the Year competition.

Hogan gave up a job at Sun Microsystems to set up Openet in 1999. On the second or third day he arrived at work to find a chunk of plaster had fallen off the wall, on to his desk. “I remember looking at that and thinking – what have I done, this doesn’t happen at Sun,” he recalls.

He pressed on with his vision for a telecoms software company that would be different from its competitors, who tended to look at problems from an IT perspective. Openet initially helped operators handle issues such as whether a pre-paid customer had credit to send a text message SMS and keeping their all-important billing systems working. There was some notable success relatively early on.

“Our seventh customer was a big customer – ATT. We had to go through performance tests, achieve all of the function and performance they wanted. If that had failed, we would have won a customer and lost it straight away and that would have been the end of Openet right there.”

Deals with Orange and Verizon followed shortly after, which put even more stress on the young company’s resources. “It was extremely painful,” remembers Hogan.

One of the earliest backers of the firm was Barry Maloney’s Balderton Capital. Maloney persuaded Norton, who had been his chief financial officer at Esat Digifone, to take a similar role with Openet, in 2004.

Two years later the company had to do some “repositioning”, as Norton puts it, and he assumed the role of chief executive. “Some stuff had to be international rather than based in Ireland and we had to move on that.” The result was that there were some redundancies.

The shareholders had an opportunity to sell but Hogan and Norton presented a five-year plan for how they intended to develop the business. Having delivered on those targets – revenues were €31 million in 2008, €46.1 million in 2009 and €75.8 million last year – the pair are preparing another five-year plan for investors.

“If we address all the opportunities that present, and you never get them all, and we get the funding we have in mind and all those good things happen, our expectation is we will be in the $500 million turnover range. God is rarely that good but that’s what we see based on the product set and the vision,” says Norton.

The plan had been to float on the Nasdaq stock exchange in New York to tap the necessary funding but that has been put on hold following legal action by Israeli software company Amdocs. The action in a US court alleges Openet has infringed Amdocs patents – a claim the Irish firm is vigorously defending – and the judge is currently deciding if the case should proceed to trial. When asked about the case, Norton responds with a brief “no new news”.

In its 12-year history, Openet has developed a suite of seven products that address particular challenges for operators in areas such as online charging and policy ie managing which subscribers should get access to what services.

“For operators, it wasn’t particularly a pressing problem,” Hogan says, “but the advent of iPhone, iPad and other devices like that has made it an issue because the utility that people get [out of them]. They can’t charge for the traffic, they have to charge for the utility. They need to be in the connection and know what’s happening on the device.”

That’s what Openet’s software enables operators to do and, while it is normally buried deep in the network, the Dublin firm’s latest product, launched last week, makes that information available to subscribers.

Called the Subscriber Engagement Experience, it allows customers to manage their own account using an app on their phone. Typical actions might be seeing a breakdown of call costs since their last bill, viewing how much data is being used while roaming abroad, requesting extra bandwidth to download a large file, or to see if a child on a family plan has left a particular physical area.

“This allows the carrier to be front and centre of the customer experience,” explains Hogan. “We want to own the conversation between the operator and the subscriber for all mobile phone companies.”

In the era of apps and smartphones, the carrier has become less important. As Hogan puts it, for most consumers they are relegated to the tiny logo at the top of the screen showing their signal strength. The software has been in development for less than a year and Hogan says the reaction from operators has been phenomenal.

The challenge for Openet now is managing that growth. “Last year we hired more people than were in the company when I joined it,” Norton says. “When you get that kind of growth, can you scale all your processes, your training and your quality to meet that need? That is the challenge.”

Where once there might have been some wariness about buying from a small Irish firm, that is no longer an issue. “We have plenty of reference sites and the industry awareness of who Openet is is there,” says Norton. “That makes a big, big difference. You are not kicking in the door. They can pick up the phone and ring our customers and our customers take the call and say nice things, typically. It’s an incentive to keep your customers happy.”

Five years ago, the firm was competing against similar-sized companies but now the opposition is Swedish telecoms giant Ericsson, the rapidly growing Chinese firm Huawei, and the aforementioned Amdocs.

The pair are full of praise for Enterprise Ireland for helping them to do business overseas.

Hogan remembers having problems getting to meet the chief information officer of a South American operator but the issue was soon solved when he was invited to a lunch with the Irish ambassador at which Hogan was also a guest. “We closed the deal. You can’t get that if you are a German company,” says Hogan.

Almost uniquely in an Irish technology company, Openet is equally strong on the business and technology side. Hogan credits Norton, a qualified chartered accountant, with bringing the leadership to the company which allowed it to accelerate its growth.

On the flip side, Norton says Hogan is the real entrepreneur in the company and credits him with having the vision to hire the right people to develop the business. “We rarely agree but we always come to a decision that’s on common ground,” Hogan says.

“It’s a great partnership because there’s very little ego,” chimes in Norton. “The business is down to selling and we don’t sell software we sell trust and reassurance. I couldn’t sell anything to save my life but I do a good job of looking them in the eye and looking sincere. I do the sincerity real well,” he laughs.

ON THE RECORD

Name: Joe Hogan.

Position:Openet Group founder and chief technology officer.

Age:45.

Family: Married to Niamh with two children, Sinéad and Ciara.

Lives: Malahide

Something you might expect:The technical brains behind Openet has bought a plot of land in New Mexico where he is building a high-end telescope which he will view from his PC at home or on the road.

Something you might not expect: His brother and sister both work at the company.

Name: Niall Norton.

Position: Openet Group chief executive.

Age:44.

Family:Married to Ann with one child, Conor.

Lives:Dundrum.

Something you might expect: He claims not to have time for hobbies although he and Hogan have been known to take customers salmon fishing in Co Mayo, where he owns a home.

Something you might not expect: Norton claims not to be able to sell. "I couldn't sell anything to save my life but I do a good job of looking them in the eye and looking sincere."