Area Company Now Sees Early VoIP Work Pay

With the latest spate of telecom mergers, traditional telephone and cable companies are transforming themselves to embrace broadband Internet-based technology such as Voice over Internet Protocol.

But to smaller companies, such as Lincolnshire-based Sphere Communications Inc., the VoIP craze isn’t new and the telecom giants are scrambling to catch up, lacking the agility of those for which VoIP is their bread and butter.

In contrast to the phone behemoths’ hardware-dependent systems, Sphere divorced itself from any specific phone or computer system and built its VoIP business solely on software.

The company’s vision of IP-based data networks has attracted major customers such as ADM Investor Services Inc., an Archer Daniels Midland Co. subsidiary based in Chicago, which adopted a VoIP system a few months ago.

“One of the problems you have with traditional (phone carriers) is it’s a solution that’s anchored to a particular place,” said Sam Helmich, vice president of technology for ADM Investor Services. “Voice over IP is going to allow us to have a totally fluid solution.”

However, the telecom field is constantly changing, forcing even the most nimble companies to constantly re-evaluate the landscape and emerging technology. For Sphere, this means having what co- founder and Chief Executive Officer Chuck Pearson called his “brain trust,” a group of about five engineers and company execs who keep a constant eye on the telecom horizon.

“We work very hard trying to predict the future,” Pearson said, speaking from a Sphere office in Naples, Fla., using a video phone run on an IP network.

Sphere, a privately held firm that has about 60 employees, sells its software to technology solution providers, which in turn sell it to companies ranging from 100 phones to 30,000.

Todd Landry, Sphere’s vice president of marketing, said the company expects to book revenues of more than $10 million in 2005, up 40 percent.

Sphere’s flagship product, Sphericall, manages voice, data and video transmitted using broadband technology.

The software integrates the applications to a single program run on the desktop, and it is intended to be scalable to meet the needs of different sized companies with various locations around the world.

The software allows users such capabilities as double clicking on a contact to make a call, receiving voice mails in an e-mail application, and sending instant messages.

At ADM Investor Services, the IP network connected the company’s headquarters in the Chicago Board of Trade building with a disaster recovery site across town.

Although the initial costs of deploying a VoIP system were slightly higher than building a traditional phone system, the company foresees the investment paying off quickly.

Helmich said the company expects to cut telecom costs by 35 percent within a year, and that could grow to 50 percent in two years.

Sphere’s founders banked on the notion that eventually voice and data could be integrated over a single network.

“Our view from Day One was that you could put voice over a data network,” Pearson said. “We always believed from the day we started the company that in fact we would be able to replace traditional hardware with a software application.”

Pearson said the company began in 1994 and launched its first product three years later. However, it hasn’t always been a smooth path. Sphere suffered in the technology bust of 2000 as money flowing into the industry dried up. It halted spending on marketing and sales while maintaining basic spending on engineering.

“We went through the valley of the shadow of death as the bubble burst,” Pearson said. “We realized on the other side of the bubble, the market would respond. We just had to survive, and we did.”