For 30 years Metaswitch has followed technological changes in the telecoms sector. It’s now looking to make significant gains from current upheaval.

1. i n n ovat i o n n at i o n : m e ta sw i tc h
Upwardly mobile
For 30 years Metaswitch has followed technological changes in the telecoms sector.
It’s now looking to make significant gains from current upheaval. By Pip Brooking
the rapid growth of the mobile internet has
metaswitch He believes Metaswitch has both the technology
sparked massive upheaval in the telecoms industry,
forcing business models to change. While the global
at a glance and the expertise to tackle this.
fixed-line and mobile voice industry is worth $1tn to » established A rich experience
1981
telecoms operators, the average length of calls has Despite its Silicon Valley connections, Metaswitch’s
gone down from three minutes to just 90 seconds. research and development capability is still firmly
Software solutions specialist Metaswitch is rooted in the UK, where the company has ranked
attempting to benefit from these shifts. The company, in the top 15 of the The Sunday Times 100 Best
founded and headquartered in Enfield, London, » headquarters Companies to Work For for the past eight years.
focuses on voice over internet technology, which helps enfield, london To ensure the company remains on top of trends,
enable services such as Skype. To capitalise on the it invests a third of its revenues into R&D.
growth opportunities this offers, its chief executive » employees Metaswitch’s strong financial performance – it has
600
Kevin DeNuccio is steering Metaswitch through the achieved profitability in every year of its existence –
second major transformation in its history. has supported this investment. It also invests heavily
“For the first 20 years the business built very in its employees – and, as the company is 40 per cent
complicated internet software for other telecom owned by them, they share in its financial success.
equipment manufacturers. We’re probably in every » turnover DeNuccio believes it is very motivational to be
£82m
telecoms network in the world,” he explains. “Then part of how people’s communication is changing.
ten years ago when the dotcom and telecom bust And last year, Metaswitch won a Queen’s Award for
hit, we made a decision to start building our own Innovation for its Metasphere application server –
systems – essentially specialised computers that a platform used to deliver the new breed of
allow voice to work over the internet – to sell broadband-enabled telephone services.
directly to the carriers.” The company’s latest product, Thrutu, is an app
That led to business revenue being concentrated which has been created by a small R&D team from
in North America, as it is the largest homogeneous London in partnership with a group of the company’s
market that Metaswitch could penetrate by selling Silicon Valley engineers. When the tool is downloaded
the same product to different carriers. It meant the by two people making a phone call, a set of icons
company could keep a closer eye on smartphone appear on the screen, providing a way for them to
developments in Silicon Valley and attract investment share contact information, pictures, videos or even
from the likes of venture capitalists Sequoia and their location during their call. “It makes that call a
Francisco Partners, which it secured in 2008. much richer experience than it has been in the past,
The company’s new mantra is “global and and keeps them on the phone longer, which helps
mobile” and it’s opening up in a different country on carriers transition to a new model as they try to get
a monthly basis. The scale of the opportunity can be consumers to use more minutes,” he adds.
seen when you compare the first wave of the DeNuccio values agility over all other business
internet, which had up to 1.5 billion users, with the qualities. The Silicon Valley investment was the
2.5 billion already using mobile internet. DeNuccio company’s first step away from self-funding and it is
believes that will extend to “virtually everybody on now planning an IPO in the next 24 months.
the planet in the next few years”. He is more than aware that with every industry
Such rapid development brings problems, upheaval, structures will change and new
however. DeNuccio points to security concerns that competitors will emerge. “We don’t necessarily
we won’t have experienced before in the way a know who those winners are going to be yet, but we
phone works. intend to be one of them,” he says.
“If we’re doing everything over the internet, “I always say to people that this company was built
including our voice calls and text messaging, it is to last. But what we’re doing now is making sure
exposed to attack just like the internet,” he explains. that it’s also built for change.”
BUSINESSVOICE I April 2011 49