Corp Profile part 2
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Brian Edwards Pres & CEO
THE CEO's VIEW
From Brian Edwards' perspective, among the factors driving last year's merger of his company, MPACT Immedia, with the Electronic Business Solutions (EBS) division of Bell Emergis, one factor stood out as an imperative. Namely his strategy to bring MPACT's applications together with a network.
"We saw that as a key success factor for the future," he says. "Many of the major e-commerce companies have failed to understand that this is the way to go. We looked around for a partner that could provide the network, and were lucky to be able to team up with Bell, which was obviously our first choice for many reasons, but particularly because it was aiming to become a North American and global player in the network realm."
The strategy posits that as business evolves, the network will become the prime focus of e-commerce. All of the applications will reside on the network, and once a company is on the network it will have access to any available service.
"Eventually," says Edwards, "the network and the computer will be one and the same. It will be difficult to tell the difference between using a computer and using the network, because that is where all the services are going to be. That is the direction this business is taking."
It is a direction that Edwards believes will appeal to SMEs as they come to e-commerce in greater and greater numbers. "Small and medium sized companies don't want to buy technology," he says. "They want to buy solutions. They want to buy capa-bilities and applications."
Like all of his colleagues at BCE Emergis, Edwards spiritedly welcomes the opportunity to cite those applications-and to contemplate inevitable future ones.
"We just did a deal with Bell ActiMedia [previously known as Tele-Direct]," he says. "Practically every busi-ness in Quebec and Ontario is a customer of the Yellow Pages. Bell ActiMedia wants to be able to offer those customers the ability to put their list-ings on the Internet. Say you're a consumer and you want to buy a wine cellar. you'll be able to go on the Internet and say, 'I live in Montreal. List for me all the vendors of wine cellars in this city.' It's not illogical to suggest that very soon you're going to be able to click on the names of the wine cellar dealers and see their products. And order their products. But understand the role of BCE Emergis. We don't tell retailers how to automate their store fronts; we help Bell ActiMedia put together the service. They have the access to the customer base. This is the pattern of our business. We do not work directly with the consumer. Rather we enable large organizations that have access to client or user bases."
Earlier in his career Edwards spent a number of years with Burroughs Corporation (now Unisys), where he held a variety of executive positions. He was then named Senior Vice-President of 1ST Inc., which was one of the largest computer-services companies in Canada. His founding of MPACT Immedia in 1988 responded to his conviction that business would eventually and overwhelmingly grad-uate from paper based operations and turn to elec-tronic forms of communication. His prediction began to be proved overwhelmingly correct when the sales of his company between 1993 and 1998 increased by almost 700 per cent, and MPACT Immedia was identified as one of Canada's 100 fastest growing compa-nies five years in a row. BCE Emergis is today rated the North America's 6th-rated growth company in its sector (Report on E-Commerce, Dec./98).
"With our network-centric strategy fully in place," says Edwards, "we expect to outperform the industry, and we will grow at a rate of 50 to 100 per cent. Our realistic expectation is to be a $1 billion company within a few years."
BCE Emergis's offerings come in four main product lines:
 network services security services
 payrnent services
 e-cornmerce services
BCE Emergis is concentrating on six industry verticaIs:
 Financial
 Mortgage
 Automotive
 Sports and Leisure
 Merchant Enabling
 BCE companies and telecommunications
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Barry Engel Sr. VP Corporate Affairs -on the investor side
They see that we're on to something." The "they" Barry Engel is referring to are
the analysts and investors who have helped multiply the stock price of BCE Emergis by a factor of nearly ten in a single year. As Senior IVice-President in charge of corporate affairs, Engel's responsibilities include investor relations. He is the man who fields the telephone calls from the analysts and institutions.
"A couple of years ago, MPACT Immedia was a niche-type player," he says. "Now, with its network-centric solutions, BCE Emergis is on the threshold of becoming a key global player in the e-commerce market. Investors are effectively saying that this company may have something that not everyone else has. And people buy into that."
It will be five years next month that Engel has been with the company, and he's seen it grow from a market cap of $30 million to $1.8 billion. Revenues for the current quarter will approach $40 million. Analysts project that the company will generate $180 million in calendar 1999, without acquisitions.
"If you add in the inevitable acquisitions for which we have a war chest-we could within a short time become dominant, especially to the extent that other major players start to use our solutions.
Whereas we're one of the leaders right now, we could well become the leader."
That's not just Barry Engel talking. That's the feedback he's getting from the market cognoscenti. BCE Emergis is indeed something special when compared to the competition, because it does not sell product; rather it delivers services on its networks. In 1994 only one of every three dollars in the industry was spent on network services. Last year that number had gone up to eight of every ten dollars. Next year, Engel predicts it will be nine of every ten dollars. Two of BCE Emergis's main competitors in the U.S. (Harbinger Corp. and Sterling Commerce) are still largely wedded to the model of selling software licences. The sales of BCE Emergis, on the other hand, are 95% service-based.
A lawyer and MBA, Engel began his career in corporate finance at First Boston on Wall Street. He became involved in a number of entrepreneurial small ventures, and then did consulting work in computers. That is when his interest in high tech took hold, and joining MPAG was an ideal fit for his suite of skills. He certainly regards BCE Emergis as an ideal fit for today's evolution in business communications, and he cites the stock market to support his conviction:
"Investors, particularly in the U.S.," he says, "are reacting to the belief that e-commerce will be very powerful, and that it will be Internet based. That is what accounts for the huge run-up in Internet stocks that we have been seeing. We are there, and the industry is still in its infancy."
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Christian Trudeau Exec VP &COO
These days, not to be behind the competition, even small companies are putting resources into their Web sites. The Web site is a window through which the whole world can look at their business. Soon, if they have not already done so, most of these companies are going to move forward with a transaction-oriented Web site. They will put in "store fronts" and enable their customers to order online.
Christian Trudeau, BCE Emergis's Executive VP and COO, wants small and medium-sized busi-nesses to know just how easy the process can be.
"For most SMEs we provide a turnkey system," he says. "They effectively plug in and become operational. All applications reside on our network. every layer of service: the
access layer, the hardware layer, the application layer, the professional services layer. Clients access the applications via the network. That's why we call it network-centric and not user-centric. Most of our clients just need a powerful computer with a good browser. One of the most important effects is that they are benefiting from the economies of scale that a company like ours provides."
At this point in time, e-commerce tools are so developed that a company can become transaction enabled in a mailer of days. "We develop the graph-ical interface," says Trudeau. "We develop the storefront, we get the catalogue up, and we obtain the merchant account. In other words, we are there to ease the transition totally."
In a previous incarnation, Trudeau was CIO of the Montreal Exchange, where he showed consider-able vision in his exploitation of information tech-nologies. Colleagues comment that his understanding of human resources and his talent as a negotiator contribute significantly to his success as a manager.
When Trudeau joined Bell Canada in 1996 to manage the largest e-commerce project in Canada at the time (the CSST's Electronic Commerce Network), his goal was to put in place an e-commerce division that would become one of the largest such players in the world.
"That has always been my goal and my challenge," he says. "When I made the decision to join Bell, I knew that Bell would play a part in developing such a business But it was also clear that to implement and grow an e commerce company, we could not stay within a telephone environment. We had to manage differently. We had to create our own culture while benefiting from the backing of BCE."
BCE under the leadership of Jean Monty was quickly persuaded that the EBS division of Bell Emergis had to spin off and find a partner. Many potential partners were considered, but only one loomed as the obvious choice.
"The coming together of MPACT Immedia and Bell Emergis EBS has been a true merger," says Trudeau. "We've taken the best of both organiza-tions and combined them. One plus one equals three, which is the best description of what we've accomplished."
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Rory Olson Exec VP Business Development -the acquisition man
In January of this year when Mpact Immedia changed its name to BCE Emergis,the company announced that it had sold 4.5 million shares to Bell Canada for close to $49 million. With the war chest primed, the hunt for acquisitions could begin. And the point man on the hunt would be Rory Olson.
The dominant impression that a visitor takes away from a meeting with Rory Olson is that he is a former business streetfighter turned corporately genteel. He has taken quite naturally to the boardroom, but you lust know that his entrepreneurial brass knuckles are still handy in a desk drawer. This guy has been around the block, and has built and sold his own companies (including the feisty Internet service provider, TotalNet, sold to MPACT Immedia two years ago). As BCE Emergis's Executive VP of busi-ness development, Olson is enjoying the opportunity to fashion what he calls the synthetic part of the business, or growth through acquisition. "A viable acquisition target," he says, "is going to be a company with electronic commerce-enabling tools that will help us expand our leadership position in any of the verticals that we currently have presence in, or which will give us clear leader-ship in a new vertical niche. Along with that will come human resources that will help us underpin our products."
When Olson focuses on companies to acquire, more often than not those companies are in the same kind of position that MPACT Immedia itself was in before partnering with Bell. "They don't have the wherewithal financially, or human resource wise, or developmentally, to realize their vision, and therefore they see being as a potentially tremendous benefit. To put what I'm saying in the simplest of terms: our stock was trading at eight or nine dollars when we did our merger, and today it's in a whole other ballpark. Which means we can look at a whole new level of expectation and growth."
Olson points to the recent acquisition of Newstar as a prime example of BCE Emergis's strategy.
"Newstar was an industry leader in the context of Canadian banking. It had about 60% of the electronic bill payments in Canada. We had only a small position as a result of our shareholding in CAN-ACT Payment Services, an initiative we undertook with a subsidiary of the Royal Bank. So acquiring Newstar gave us a clear leadership position in Canadian banking with regard to electronic bill payments. The merger also gives us access to Newstar's client base as potential clients for our other products and services."
Olson also points to Newstar's exclusive relationship with Microsoft to deploy that company's software for bill presentment in Canada. Such rela-tionships, especially with the giants, are critical in today's high-tech marketplace. By leveraging Newstar's market share and alliances within BCE Emergis, the combined entity is far better positioned in that vertical. Accordingly, Olson's recipe for an ideal acquisition includes any ingredient that will expand BCE Emergis's circle of alliances.
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Joel Leonoff Sr. VP Sports&Leisure Services
In its quest for niche markets that have potential for large transaction volumes on the Internet, BCE Emergis has identified sports and leisure as
a prolific opportunity. There is a tremendous follow-ing by sports enthusiasts who seek out contact, interaction, and information on the Net in regard to their favourite sports teams.
We have signed deals with major league sports franchises that include the New York Mets, the Baltimore Orioles, Detroit Tigers, Chicago White Sox, and others," explains Joel Leonoff, Senior Vice-President, Sports and Leisure. 'the first question
we ask when we approach a major league team is, 'Are you guys deriving revenue off your Web site?' The answer is typically no. So we offer to manage their site, to help them generate money. We bring major advertisers to the table, and it's a win-win situation. The traffic on these sites is very high and the marketing opportunities are limitless."
On a monthly basis, the combined sites of sports teams managed by BCE Emergis are visited fifty to sixty million times. For some teams, to provide extra added value, the company actually employs a reporter to travel with the team, stay around the locker room, and provide Web content that is not other-wise available in the media.
Leonoff's department is in the process of establishing an on-line ticketing operation for the New York Mets, whereby anyone can go to the team's Web site, take a look at the seating arrangements, find out what the best available seats are for a particular game, and purchase the seats with a credit card. Leonoff is looking next to college football and basketball to pursue similar arrangements. Ticketing is bound to proliferate on the Net and act as very strong sources of revenue for infrastructure enablers like BCE Emergis.
Leonoff began his career as a management consultant at Zittrer Siblin, obtained his C.A., and then launched his own software company which he eventually sold at the ripe age of thirty. He then teamed up with Rory Olson (who had also just sold a business) to form TotalNet. When that company was bought out by MPACT Immedia, the two joined a trajectory that has landed them in the executive suite of what is now BCE Emergis.
Given the aggressive entrepreneurial culture that characterizes the company (and for which they themselves are in no small way responsible), Olson and Leonoff may have only barely begun to make their mark on the business history of Montreal.
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