On Friday, April 3, the Bytemobile board of directors met in our Mountain View office. I attended the meeting, as I have every other board meeting over the years. What struck me about this session was the sharp contrast between the global economic crisis and the continued optimism that we share in our business results and outlook. In fact, I found this so exciting that I wanted to communicate my impressions.
For the quarter ended March 31, our revenue grew significantly – more than 30% from the same quarter of 2008. This is consistent with our annual and quarterly increases of the last several years. Achieving growth of this magnitude in the current economic downturn is a rare and even counterintuitive achievement.
Hatim Tyabji, our executive chairman, has said that it takes both offense and defense to win the game. On offense, companies need to invest in engineering, sales and other key functions to drive their future growth. On defense, they need to manage their costs and expenses to make their growth profitable.
Contrary to popular myth, growth and profitability are not mutually exclusive. Bytemobile is living proof. Our strong cash position has enabled us to fund our own operations for years. Moreover, we continue to actively invest in both technological innovation and revenue growth.
At last Friday’s meeting, the board uniformly endorsed this mindset by agreeing that we should continue to:
• Invest 20-25% of revenue in R&D – not only product development, but also research that perpetuates market-leading innovation
• Expand our sales and marketing presence in all geographies
• Add staff very selectively across all functions
While playing offense along these lines, we are also playing defense. In the first quarter, we kept our operating expenses approximately 10% below plan. The credit for this continued austerity goes to each and every employee. Last fall, as the crisis deepened, we asked them to work with their managers and teammates to examine their operations for cost-saving opportunities – and they have done just that.
From Strength to Strength
As the board saw in a series of detailed presentations on R&D initiatives, financial performance, account status, and marketing programs, the execution of our strategy is producing consistent results across all functions and geographic regions.
Research and Development
As Hatim noted in his remarks to the board, he has been ‘spoilt’ in terms of the engineering team delivering as committed. The team committed to the release of the next-generation Unison platform on March 31, and once again it was delivered on that date.
Bytemobile is, at its core, a technology company. Our new product innovations have a history of prompting slavish imitation by competitors.
To further increase our lead over the competition, we are now launching a new initiative to fund the ‘R’ in ‘R&D’. Research fuels innovation and the creation of visionary solutions that anticipate future customer needs and issues. Our ‘white space innovation’ initiative – targeting technology and products that customers have yet to envision, much less request – will be a focus of investment and resource allocation that transcend ongoing product development cycles.
Our global sales pipeline is significantly larger today than it has ever been in the company’s history – a formidable fact considering our 104 network deployments in 54 countries. The pipeline consists of a number of sizable deals that include multi-year commitments and leverage our entire product portfolio. Examples include pending multi-year, multi-product deals in Europe, North America, China, Southeast Asia, and Latin America.
In addition, we are competing more and more with traditional telecommunications industry giants such as Comverse, Ericsson and Nokia Siemens Networks. We are winning against them because of our agility, our laser focus on customer needs, and the strength of our technological innovation, execution and support.
Worldwide Customer Support is expanding the breadth and depth of our account relationships. Under Warren Simpson’s leadership, the CS team has set new standards for customer satisfaction and turned post-sale service into a major asset and competitive advantage.
We have increased our presence at customer sites and established a new level of customer intimacy around the world. As a result, support has become a potent weapon.
Our systems integration capabilities have elevated us from a leading infrastructure software supplier to a tier-one provider of total system solutions to operators. We have successfully engaged T-Mobile International, TeliaSonera and dozens of other accounts for these solutions.
As a prime contractor, we provide our customers with a single point of contact and accountability. The increasing value of this role has resulted in triple-digit growth in services revenue for the last two years. We continue to invest in new resources to meet the rapidly growing needs of our customers.
Systems integration is one more element that is changing Bytemobile’s persona in the industry. As part of our strategy, we partner with leading solutions suppliers such as IBM and F5 Networks.
Our customer partnerships now extend to marketing programs in which we support operators’ development and launch of new mobile data services. At Sprint and TeliaSonera, for example, we are integrating our regional marketing teams with those of customers for the planning and execution of custom marketing solutions.
Joint marketing activities further enhance our trusted advisor status within the operator organization. Note Bytemobile’s role in the public launch of TeliaSonera’s SurfPort mobile internet portal and SurfOpen web browsing service earlier this year.
Culture of Excellence
As these programs and initiatives were presented and discussed at the board meeting, I was reminded forcefully of the culture that supports our strategy.
The Bytemobile culture provides a foundation for incisive decision-making, a relentless drive to closure and a dedication to technological innovation. We have a common set of values to guide us through a dynamic and volatile business environment:
• Focus, accountability and execution
• Ethics and integrity
• Doing what is right – by our customers, partners, shareholders, and employees
It is our unflagging adherence to these values that will ensure Bytemobile’s continued growth and success – and our continued ability to care for our people.