October 31, 2006

Hires CFO with startup plus merger experience

BPL integrator/operator and "smart grid" technology firm BPL Global hired a CFO with the kind of experience the firm believes is needed for the coming boom.

          Startups and mature firms have different financial needs and strategies, BPL Global CEO Keith Schaefer told us recently.

          The BPL integrator/operator and smart grid applications firm started up only a year ago and has one customer we know of -- Duquesne Light in Pittsburgh.

          That BPL deployment is limited in scope, but meanwhile the firm gained US$25 million in investments last month -- much of it from firms in Kuwait (BT, 9/26).

          BPL Global last month introduced a "smart grid" software platform called Power SG (BT, 9/19).

          Startups tend to rely on board members and investors to help with financing, Schaefer explained.

          As a firm "grows, becomes more sophisticated and matures, it's necessary to bring in a seasoned, qualified chief financial officer.

          Steven Barto helped startups with "early phase technology" grow to become "part of a strategic team to make them successful and stand alone," Schaefer reported.

          But BPL Global's new CFO has experience stepping into mature, internationally focused firms and using mergers and acquisitions (M&As) to grow even bigger, he added.

          "He's got that rare talent," he added, and "it's not often that you can find someone that can do both of those equally well," and he believes Barto can.

          Barto held senior financial positions since 1995 with firms doing "provider work principally to the telecom industry's major service providers," Barto told us.

          His "leadership experience in finance" goes back two decades, noted BPL Global.

          "My background recently has been with the data networks or broadband routing and switching businesses."

          That industry "plays in that same space" as BPL -- and the common theme between them is "trying to get broadband capability pushed out to more and more households and make it reachable to as many folks as possible," said Barto.

          His path first crossed BPL when he saw a clipping in the Pittsburgh newspaper announcing BPL Global's BPL deal with Duquesne Light (BT, 7/25/05).

          The news made him wonder about BPL's potential for his firm and he contacted BPL Global to learn more.

          He "began to explore some of the opportunities," met Schaefer and saw "an emerging market coming on board."

          BPL Global is quite well funded, Barto reminded, and he sees lots of growth potential -- not just in its existing business but through M&As.

          Of all the opportunities Barto has looked at, BPL and BPL Global were good enough to "go after."

          He starts Nov 1.

            Young firm matures

          The firm started with BPL as its main focus but "quickly" learned the importance of helping utilities improve their return on investments (ROI) via smart grid applications, Schaefer observed.

          Improving distribution is "the number one thing" utility executives talk about, he added, based on his meetings at over 20 utility boardrooms in the past 18 months.

          BPL and smart grid are "separate businesses" for BPL Global -- the latter grew out of the acquisition of a software firm.

          The two "come together" to help utilities, ISPs and other joint venture partners get a quicker ROI.

          Schaefer predicts 2007 will be "a breakout year" for his firm and the BPL industry.

          The coming boom "will be led by smart grid applications that will capture the imagination, the attention and the commitment of utility companies around the world."

          Soon after such networks are created "the natural add-on" will be broadband for consumers that Schaefer predicts will "compete" well on price, performance and customer service with DSL and cable.

          Middle East is fertile

          We asked Schaefer about opportunities for BPL in the Middle East.

          Al Deera Holding is the leading Kuwaiti investor in the Pittsburgh-based BPL firm and recently spun off a subsidiary to do BPL and maritime communications.

          That firm, Deera-IT, counts BPL Global among its partners (BT, 10/24).

          "I'll leave you with three thoughts about the Middle East," said Schaefer, based on his travels there in search of potential BPL partners.

          First and foremost -- nations in the region are huge consumers of energy, Schaefer reported.

          Despite having great petroleum reserves, populations are growing fast, leading to serious concerns in governments about stewardship of the environment.

          Such concerns -- not unlike other parts of the world such as the US, Europe, Asia and around the globe -- drive the desire for efficiency in energy management in the Middle East.

          Schaefer believes the region will adopt "a leadership position" and BPL Global wants to help Al-Deera and others meet that demand.

          Secondly, the region has little cable TV -- leaving the telecom carriers as the primary broadband competition.

          Almost all those firms are owned entirely or partly by the state so that competition isn't as keen as it is in the Western world.

          Thus Schaefer sees "huge" opportunities to offer a competitive service.

          We've reported surprising support for competitive alternatives from governments that own telecom monopolies.

          Has Schaefer seen that in the Middle East?

          "Particularly in the [Persian] Gulf region, the governments are enlightened," Schaefer reported.

          "They are adopting Western practices and best practices in many areas and they have embraced alternative sources of offerings and services to be more competitive."

          Those states don't just own large portions of the telecom firms, noted Schaefer, they own large parts of the electric utilities.

          Combining smart grid with a broadband offering means the state will still get its share of the resources -- but with the added benefits competition offers in a free market, Schaefer explained.

          He's talking about better services, lower costs and customer satisfaction.

          And the third finding?

          Governments in the Middle East are aware that despite great wealth in the region, many of their residents don't have access to services that broadband could deliver.

          A desire exists to help citizens become better educated, more productive "and compete successfully in the global economy not just on oil and natural gas but in financial services and consumer goods via the full participation in the economy.

          "Giving people the tool -- in access to the internet -- is an important and very efficient way to catch up and I think that's what is taking place as we speak throughout the Middle East" (www.bplglobal.net).

          He's a trustee at Pitt

            Schaefer is a University of Pittsburgh trustee and gave $250,000 to endow a scholarship for undergraduates, reported the Pittsburgh Tribune Review last week.

          He was nominated for a slot on the alumni board in June (BT, 6/20).

          Conversations with the students teach him how young people use his firm's products, said the report.

          "I'm a better person and a smarter person because I've been in conversation over a period of years with these students and watched their development and growth," the report quoted.

          He meets with the recipients of his scholarship, the report added (http://tinyurl.com/y2vugx).