PGi CEO: Privatization Opens New Opportunities for Company, Partners

On the same day that Siris Capital Group completed its acquisition of PGi, the collaboration software and services provider, Ted Schrafft went from president of a public company to CEO of a privately held one.

Schrafft was named PGi’s CEO after serving as its president since July 2006. He succeeded PGi founder Boland Jones, who was appointed to PGi’s new board of directors.

When the deal closed, Hubert de Pesquidoux, Siris Capital executive partner and PGi executive chairman, said PGi is “uniquely positioned to take advantage of a growing $10 billion-plus market opportunity.” PGi’s unified communication and collaboration (UCC) services are used by about 50,000 customers globally.

In a Q&A with Channel Partners, Schrafft talks about the benefits of going private, for both the company and partners, and how Siris is backing PGi’s partner strategy.

Channel Partners: Have there been any changes in PGi and the way it does business since the acquisition?

Ted Schrafft: I think the biggest change, and it’s more of an adjustment or shift as opposed to a massive change, (is) the move from a public company, where you’re a little more beholden and being measured by the stock price and the public-market shareholders … to the private scenario. I want to say it’s a little more of a down-the-middle, you run this business the way you should be running it and want to run this business to drive growth and profitability. It’s a slight shift, maybe just moving to a different scorecard, that we’ve also found very healthy.{ad}

We’ve opened up our strategy. A key part of it is while we have a strong, strong history in audio conferencing, we were very much driving a lot of visibility to our SaaS product portfolio, and I want to say to a certain degree we’ve probably continued to drive our SaaS portfolio because they’re very advanced, competitive products that differentiate PGi in the market, but we have also gone back to our roots and we’ve opened up audio-conferencing opportunities and our operator-assisted business, which is a key part of our business. So I’d say we’ve been a little more balanced in our approach to customers because they need all those core services, as opposed to, again, really just trying to drive toward this shareholder sentiment; we’re really driving toward more of a customer sentiment, and I think that’s been very healthy as a private organization versus public.

We’ve always had a strong partner channel and focus in the company, and Siris has been very supportive of us advancing and accelerating our channel-partner strategy. There’s a lot of shifting and maneuvering going on in the market, and there [are] a lot of partner opportunities, whether they’re …

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… master-agent type of opportunities to advance their portfolio, on up through large carriers that are looking for competitive differentiation in the space. That creates a great opportunity for PGi and that’s been something that Siris has been very supportive of in helping us advance in the private scenario. 

CP: What sort of feedback have you received from partners regarding the acquisition? Did they have concerns, questions?

TS: They had some questions and wanted to know what would change, but we’ve gone back to them and said we’re investing in the partner space, and this is core and strategic to us. And Siris is extremely supportive of our strategy. And it’s true, we’re actually adding resources in our channel program: sales resources, marketing resources, operational support resources. We’ve globalized our business since the acquisition, meaning we’ve always had a partner program, but it’s been a little more regionally based … so we’ve globalized our program to not only drive critical masse, but drive more singular strategies around our messaging to potential partners, etc.{ad}

CP: How has your role changed since moving from president to CEO?

TS: I’ve gone from [being] more operationally driven to more strategically driven. I was president of a public company and now I’m CEO of a private company, so setting strategy, aligning our strategy with our private equity investor, and aligning that strategy through the PGi organization is really what I’m operating toward today. So, it’s been a great change, it’s been a higher-level aspiration. I have a great management team that stays very consistent through the change, and all of those folks are stepping up into their new roles as well. So everybody’s got to take a step up and it’s much more of a strategic look, and that’s probably the biggest change, to pull myself out of some of the day-to-day operational aspects and delegate that down into the organization. And my job is to focus on the strategy, as well as open doors and opportunities for the company. So getting out in front of customers continuously and making sure that we are listening to [them] … is to me the key part of the change in my job. 

CP: Tell me about PGi’s partner program. What does your typical channel partner look like? Is your partner ecosystem growing?

TS: It’s broken into a few different segments. But our channel-partner program represents approximately $100 million of our overall revenue and it’s been our fastest growing in our company over the past few years. It’s comprised of different types of partners, so anywhere from agents who resell our services – so an agent or master agent – … on up through VARs, wholesale companies that are taking our products and incorporating them into their offerings – and we sign them under their name – on up through carriers, which is a big focus of ours because we see carriers needing and wanting to expand their portfolio and drive applications like collaboration into their customer base[s] for value add[s] to help differentiate them and that are sticky. Of the top 50 carriers in the world, I want to say eight of them are existing partners today and we have keen global focus on expanding the carriers.

We’ve also been going after …

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… some new types of partners in the voice space, with voice players that have been traditionally more in voice PBX and are going to the cloud, that are looking for additional applications beyond voice, such as collaboration. So we’re looking at new investment areas of opportunity in addition to even some of the traditional ones, and we’re expanding in all of them. We’re putting resources in the agent program, the reseller program and the carrier program, and investing in the voice industry as well to be opportunistic.     

CP: Is PGi’s channel strategy evolving according to channel/market trends?

TS: It’s evolving certainly in terms of the investments we’re making and it’s evolving in terms of the portfolio of products that we bring to the channel, whether it’s traditional audio capabilities up through our UC stack – a product called iMeet – so we continue to innovate to bring new capabilities to the channel. We continue to look at infrastructure capabilities, so we’re evolving there relative to reporting and billing, and how we assist our partners. We continue to evolve our marketing strategy relative to how we go out and support our partners in the market. And PGi has a reputation for being very partner-friendly, so if we ever run into a situation where a partner of ours could be competing with our direct salesforce, we will always lean into and align with our partner. We’ll take care of our salesperson, but we want to ultimately be known as partner-friendly. …That’s been a great strategy to attract new partners that maybe partnered with somebody else who is not as partner-friendly as we are.{ad}

And another evolution has been in the private scenario where we’ve [become] very open to white-labeling or private-labeling our offerings to our partners, whereas in the public market, we were more concerned with our brand and wanted to get the PGi brand out there. In the private scenario, we’re less concerned, so we’re very happy to white-label or private-label the offering, which I think again is a nice partner-friendly step and part of our continuing evolution.

CP: What are the biggest issues facing PGi? As CEO, what is your role in addressing those issues?

TS: It’s a very dynamic, competitive landscape. So on the one hand, you say there’s a lot of competition going on in this space, there are competitors out there who want to commoditize our space, and so every one of those issues or challenges creates an opportunity for us. And I call it the chess match in the industry. So for us, the opportunity is to go find partners in the space that we can align with our products and services, and our global capabilities, and that we advance their competitive position in the market, because they’re under threat as well by some of these shifts and changes in the market.

So for me, it’s that chess match of finding partners and players, and continuing to differentiate our products because it’s moving so quickly, making sure that service, global quality of service, stays as a competitive edge, because at the end of the day, you can get a customer, but you can’t keep a customer without …

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… that service and support.

CP: How do you think your company’s IT portfolio will change in the next three to five years?

TS: The product portfolio in the industry, in a lot of cases, is consolidating. You share these concepts with UCaaS and UC, and UC and collaboration, so that’s where we have to stay very, very current, if not one step ahead of the market. Video capabilities are key, so if you look at our product portfolio, we have our core audio capabilities on up through … iMeet, and we can … extend the capabilities and the applications associated with iMeet. And mobility becomes key. So ultimately building products that are intuitive, that we say fit nicely into the inertia of the user, [which] are just very, very simple to use, easy to access, are the key aspects of where our products are going to go.

Voice quality and continuing to enhance voice quality in our products is key. And continuing to sell and package each product the way customers want to buy them because in some cases they want to buy them in a portfolio or a stack, so to speak, and in some cases they want to buy them a la carte. So packaging and pricing of products is going to continue to be a key part of our strategy as well.

And then obviously supporting distribution and looking at how our carrier partners want to sell and service these products versus our agents, versus our direct-sales organization. So being channel-ready, with channel capabilities, and being very efficient and channel effective is going to be a key aspect of how we go to market over the next few years as well.{ad}

CP: How do you think PGi’s channel strategy will change during that time period?

TS: We’ll continue to have a strong sales organization, but the opportunity for channels is we’re going to continue to invest there, and we’re going to continue to get into more focus. We can’t be all things to all people around the globe all the time, so we can get to new markets, new geographies, we can get to verticals, so it just opens up so many doors, efficient doors of distribution, new markets, new customers to go find a channel partner that has an existing (slate) of customers that want to add these capabilities, where those channel partners know those customers and have access to those customers and have credibility with those customers and relationships with those customers that we don’t have. It sounds pretty basic and obvious, but that, to me, is the opportunity for a company like PGi to go grab. So it’s going to continue to be a big part of our go-forward strategy.