A New Species of Telecom

Wayne’s Evolve IP aims to be the next big thing in business communications.

If the evolution of the workplace telephone were represented in graphics mimicking those of man’s progress from ape to upright-walking, Wii-playing, SUV-driving head of the food chain, it might go something like this: First came the wall-mounted crank phones and their rotary-dialed “candlestick” successors. Then there was the human-manned office switchboard, typically with a female operator.

The next step: early multi-line phones with a row of big, clunky buttons along the bottom, which gradually morphed into modern multi-line versions. Today’s workplace telephone systems aren’t much different, though connections frequently involve automated systems equipped with pleasant female voices. (Some things remain classic.)

So where do we go from here? Well, the guys behind Evolve IP, a new business information service with operations in Wayne and Center City, are glad you asked. Chairman and CEO Thomas Gravina and CFO Michael Peterson believe they have, in their new company, the next evolutionary step in business communication—one that uses advances in the Internet, high-speed data transmission, computers and off-site hosting to allow businesses to combine multiple information services into one while simultaneously minimizing the amount of equipment they must maintain.

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In essence, the Evolve system means the death of that old workplace standby, the telephone closet. Instead of racks and racks of connections maintained at an individual workplace and tied into a traditional phone service provider, Evolve computerizes the system and moves it off-site. That location also provides the office with its Internet connection and hosting, including a variety of software applications and tie-ins to mobile communication.

Conventional phone service has its own, somewhat derogatory acronym: POTS, or plain old telephone service. And in many ways, it’s changed little since the breakup of the Bell System monopoly in the mid 1980s, when private enterprise was first allowed to enter the market. It was that massive shift in the world of telephony that first launched Gravina, a Lower Merion native and Villanova University grad, on his path toward what would become Evolve IP.

A few years out of college, Gravina migrated to the telecommunications business and began ATX Communications, a King of Prussia company that specializes in providing communications services to small and mid-sized businesses and has since been purchased by New York-based Broadview Networks.

“The industry began to evolve from a competitive perspective. Monopolies began to be broken up,” he says. “Any time you have monopolies breaking up, you have growth opportunities. I spent the next 15 years building ATX into what is now a large, very successful firm.”

At that point, Gravina and the two other principals decided to sell ATX, entering into a merger with two publicly owned companies in 2000. One of them was CoreComm, of which Peterson was a founder.

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“After we did that, the capital markets basically collapsed and all the communications funding dried up,” Gravina says. “It wasn’t my intention at the time, but I was asked by the board, along with Michael, to come and basically take over the presidency of the combined companies and integrate them.”

Over the next five years, the two men turned the companies around and took them private once more, eventually bringing in the holding company Leucadia National to provide a $50 million investment. With Gravina as CEO and Peterson as COO and CFO, both retired and retained the titles of chairman and advisor, respectively. “About a year later, we started Evolve IP,” Gravina says.

One of the primary motivations for doing so was Gravina’s realization that business communication technology was on the cusp of a seismic shift comparable to that of the 1980s Bell breakup that spawned the open telephone service market consumers know now.

Only, this time, the change wasn’t mandated by the federal government. Instead, it was being propelled by the rapid development of voice-over-Internet phone technology, abbreviated as VoIP. This, in combination with the already maturing fiber optic computer networks rapidly expanding throughout the region, offered the convergence of technologies needed to make Evolve IP happen.

But for Evolve IP, it’s what happens on each end of the connection that makes the difference more so than the connection itself. “The technology out there has really changed dramatically over the last 24 months, and it’s our belief that the change in technology is what’s going to change the way people buy communication services going forward,” says Gravina. “That’s the reason we got into the business.”

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Peterson concurs. “I think it’s one of the best industries you can be in,” he says. “Everyone needs a phone; it’s a ubiquitous service, and there’s a huge market opportunity. Even today, with Internet and data, I think there’s a huge growth component where other industries might be completely static.”

The primary pieces of equipment Evolve provides its customers are ultra-high-tech phones connected to Evolve’s redundant servers at its various Philadelphia-area locations via a dedicated broadband line rated T1 or higher. All of the systems, applications and security features are located at Evolve centers. “We’ve been in the business for lots of years under different technology platforms,” Gravina says. “It’s our opinion that the technology platform has changed, and those changes will change the way people buy services. It will all be on a hosted application, meaning the phone closet doesn’t exist anymore.”

That phone acts as the “gateway into our network,” says Gravina. Once customers sign up for service and the new units are installed, any place they plug in a phone allows them access to the network. “It acts as if it’s operating from their office,” he says.

Gravina and Peterson note that it’s impossible to provide hard numbers on potential cost savings for companies that move to Evolve’s system. But they do point out that most operating in the traditional framework can have as many as four vendors—for the phones themselves, Internet access, network security, and management and compliance.

“What we’re talking about is collapsing those four services into one on a hosted application. So the savings across those four platforms will vary,” Gravina says. “When you have those four components that are no longer being managed by four vendors, they’re a lot more secure and a lot more efficient.”

It’s an argument that’s likely to catch the attention of anyone who runs a business, Peterson says. “For us, this was a real opportunity, because any senior manager of a company, CEO, COO of a business, wants to get more services for a cheaper price—that’s fundamental. And this technology allows them to get a great deal of new services—bells and whistles, if you will—with a total cost of ownership that’s significantly less. And they have a service that’s better.”

Among those bells and whistles are voice mails sent to e-mail, the ability to dial directly from a Microsoft Outlook contact list, and the capacity to link the network with employees’ mobile devices and laptop computers. Because Evolve’s software can also track any portable device that’s a part of a company’s system whenever it connects to the network, many potential security issues—even intended ones, should an employee lose a laptop that contains proprietary information—are also foiled.

Since the Evolve IP system went live in December, response from businesses has been enthusiastic, with more than a dozen signing up in a single 30-day period. That could easily be attributed to the fact that Evolve IP is the only regional company that does what it does.

“We don’t believe that there are any other companies today doing anything like what we’re doing in totality,” Gravina says. “What you have are companies selling VoIP phone systems, but they might be contracting out for the bandwidth or contracting out for network security.”

The company’s size may be another advantage. With just 33 employees well-versed in the system and its entire infrastructure centralized in the Philadelphia metro area, Evolve IP has a certain localized edge over international corporate empires that might have the power—but find it difficult to wield it—for the small to medium-sized business.

For the owner of such a business, the first impulse might be to contact a large corporation like Verizon. Peterson suspects, though, that the response from Evolve IP would be quicker and the service more satisfactory. “These behemoths have a lot of attributes, and they’re good companies,” he says. “But when entering into a new technology, you can be a lot more nimble if you’re smaller.”

Evolve IP also benefits from its commitment to the Philadelphia market, which Gravina and most of his managers call home.

“The reason we’re in Wayne is we were born and raised here,” he says. “Many of our management team went to school at Villanova, Temple, Rosemont. This company’s roots are in the Philadelphia region.”

To learn more about Evolve IP, visit evolveip.net.

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