Feature Story

August 24, 2006

by Charles Waltner, News@Cisco

"Management is about choices, pick one," says Mike Fong, the chief executive officer of Calence, LLC. Earlier this year, Cisco Systems made the choice to honor Calence's exceptional accomplishments as networking experts, naming the Tempe, Ariz., business as Channel Partner of the Year for North America.

Cisco channel partners such as Calence are part of a global workforce of over 200,000 people in 20,000 independent equipment resellers, systems integrators and network consultancies that account for more than 92 percent of Cisco's sales to businesses and public organizations around the world. Channel partners are the face of Cisco to the majority of its customers, and their success is vital to the network equipment manufacturer.

To understand Calence's own remarkable success, one only needs to remember Fong's comment. "From what I've seen, you always face multiple choices," Fong says. "There are so many that it is easy to lose focus."

But Calence has never lost focus on what it does best: provide the highest quality network consulting and development services available. Calence offers a full gamut of services from design and consulting to implementation and management, as well as boasting expertise in a wide range of networking technologies, including voice, video, data, wireless, application performance, and information security. "When it comes to networking, we aim to provide the full soup-to-nuts service," Fong says.

Calence's business rests on a combination of its business consulting sensibilities and peerless technical expertise that permeates the company. Chris Cushman, a Calence employee in the Northwest, had previously worked as an information technology manager for various companies before joining Calence's sales force. But Cushman says sales at Calence tap every ounce of his technical knowledge.

"Sales at Calence is a little bit different than other places. Actually it is tremendously different," Cushman says. "Calence is very focused on the most advanced networking technologies. It's the way we stay valuable to our customers. The client's in-house people usually don't have the time and resources necessary to keep track of and assess all the latest innovations. So as sales representatives for Calence, my team and I have to be able to very effectively explain the new technology and how it will help their business."

"And it's not just about technology," Cushman adds. "We are trained to work with our customers on all facets of any network implementation, from business process changes to financing and long-term support. All of these things have to be in place for the technology to work at its best."

And when customers want to talk about the technical nitty-gritty, Cushman can answer their requests with one phone call. Subject matter experts, such as John Howard, a director in Calence's network strategy and infrastructure practice who is also a wireless network architect and 20-year industry veteran, travels to wherever a customer needs the most sophisticated network technology help.

Howard says Calence's own assiduously maintained business processes for network implementations make it possible for the company to maintain its same level of quality service even as it grows. By following formal methodologies-such as procedures for when and how sales teams call in subject matter experts such as Howard-the company can repeat its high-quality customer support style across the organization while ensuring new insights and information are consistently disseminated throughout the company. "Lots of places don't have such rigorous organizational mechanisms in place, so a customer's experience depends much more on the knowledge of a particular person rather than the organization as a whole," Howard says.

Jim Ortbals, Cisco's director of operations for U.S. channels, says Calence consistently earns extremely high customer satisfaction ratings, noting the company's business consulting approach differs from many other Cisco channel partners. "The company founders come from a business consulting background, and so they apply rigorous business management practices to all of their technology implementations," he says. "Thanks to their disciplined methodology, their forte is dealing with complex networking problems."

Ortbals believes such skills explain in part why the company has been so successful with major Fortune 1000 companies.

One customer eager to speak about Calence was Desert Schools Federal Credit Union, Arizona's largest credit union with 1200 employees in 52 locations. Chris Kearney, director of technical services for the organization, says during the past six years Desert Schools has been most impressed with how well Calence executes the basics-the aspects of business that customers assume most companies would consistently provide but yet shockingly few do. "When Calence says they'll get something done, they get it done," Kearney says.

And despite its involvement with multiple major network projects with much larger customers, Kearney says Calence is willing to offer just the amount of support a customer wants-from equipment sales and design to outsourcing and security auditing. "They seem to have figured out that there's multiple layers to the client relationship," Kearney says. "They are able to meet us where we're at."

Now even more companies will be able to enjoy the same benefits of working with Calence. In February of this year, Calence made its biggest move yet, combining with Avnet Enterprise Solutions, a network integrator and a division of Avnet Inc., Phoenix, Ariz., one of the world's largest distributors of electronic components and computer products. With more than $200 million in annual revenue, Avnet Enterprise Solutions (AES) was twice Calence's size. The resulting company is one of the largest network integrators in the country, with $300 million in revenue and 400 employees in 21 markets within the United States

Fong, a graduate of Carnegie-Mellon University with a bachelor's degree in electrical engineering, started Calence in 1993 with three other networking consulting colleagues from Anderson Consulting (Accenture) in Chicago. The group set up shop in the Phoenix area in part for its growing technology market. While one member left the company after the first year, Fong's other partners Tim Porthouse and Rich Lesniak are still executives in the company.

For four years in a row from 1998 to 2001, Calence made it into Inc. magazine's list of the 500 fastest-growing private companies in the United States. Computerworld magazine has also named Calence as a "best place" to work in the technology industry multiple times, and in 2004 Fong was named business leader of the year for Arizona's technology industry.

To Fong's chagrin, Calence just missed out on entering Inc. magazine's Hall of Fame, earned by any company that makes the Inc. 500 list five years in a row. Fong, whose competitive nature shows in his mild disappointment at the missed opportunity, says the collapse of the Internet bubble in 2001 stopped the company just short of the elite award.

But the "techno nuclear winter," as Fong describes it, taught his company some valuable lessons, including how to adjust company strategy to address changes in the market. He says he feels fortunate that the company is still around and thriving after that close call. "We've dodged a few bullets over the years, and we've lost a lot of competitors through all the big market cycles," Fong says. "But I believe it has been our relentless focus on our customers that has helped us survive and thrive."

Cisco partners such as Calence bring a crucial level of sophistication to network deployments that make communications technology even more useful to customers, Cisco's Ortbals says. Calence, for example, has won several awards from Cisco for its custom-made Extensible Markup Language (XML) applications for IP telephones, including MyRX, which makes it possible for pharmacists to use Cisco IP telephones to find and print drug compounds, check order status and contact the help desk of the Professional Compounding Centers of America (PCCA), a licensed re-packager of bulk pharmaceuticals. "Using technology to solve business problems as Calence does will consistently win you customers," Ortbals says.

But it's not just customers that take note of Calence's exemplary business practices. The quality of the Calence work environment has maintained an extremely low (single-digit) employee turnover in an industry that typically records double-digital employee loss. "Good people beget good people," Fong says.

Above all, a potential employee must demonstrate the ability to work as part of a team and show total customer dedication, as well as having technical expertise in spades. Cushman, for example, says that Calence's Portland, Ore., office has been regularly interviewing candidates for the past three years, adding only 6 people during that time. "The standards are that high," Cushman says. "We want to blow the room away with our expertise."

Though not often emphasized in the technology industries, people familiar with Calence quickly note its highly professional and ethical approach to business as one of its most appealing qualities. Howard, for one, gives much of the credit to management. He says he has never worked for a company where employees had such access to top executives. One day, for example, Fong stopped Howard in the hallway and congratulated him on the success of a recent project. "He knew my name and everything about the project," Howard says. "It may not sound like that big of a deal, but I've never been at an organization that executives at that level would care enough to do what Mike did."

Now with the addition of Avnet Enterprise Solutions (AES), Calence has a chance to make a good thing even better. It gives Calence far more geographic scope, with more offices in more cities throughout the United States. "Teaming with AES has changed our business overnight," Fong says.

Jim Teter, former president of AES and now Calence's chief operating officer, says that the two companies had the same basic focus yet little market overlap. AES had a strong customer base in the education and public sector markets while the former Calence was fully entrenched with Fortune 1000 corporations, but they are both "flat in the middle of the network solutions business," Teter says. The merger also gives Calence another blue-chip customer. Calence will now manage Avnet's global voice and data networks.

Teter, who knew Fong through the greater Phoenix business community, says the two lead executives from each company are equally complementary. As COO, Teter will focus on the day-to-day "nuts-and-bolts" operations of Calence, freeing Fong to do what he does best: strategic leadership. Teter believes the stage is set for a very promising future. "It's the right place at the right time with the right people and the right products," he says.

Perhaps Cushman best summed up the opinions of Calence's management, employees, customers, and Cisco. "I love where this company is going," he says.

Charles Waltner is a freelance journalist in Oakland, Calif.