By Nick Mitsis

The year 2004 began with one major objective: to grow the business. Starting the first quarter off as a cash-flow positive operation allowed the executive management team of Herndon, VA-based iDirect Technologies to focus on selling its products and expanding its global presence. And that is exactly what John Kealey, president and CEO, accomplished throughout the following 12 months. Now that they were no longer solely burdened with making sure the financials remained in the black, the executives at this privately-held equipment company focused on the business and pushing the envelope of satellite-enabled broadband.

Kealey introduced new products, landed significant contracts, expanded his workforce and maintained a vision for how a business should be run during a year filled with challenges for cutting-edge satellite applications. In 2004, iDirect announced an entirely new product line that allows for infinite scalability for a hub platform, enabling any number of networks to be controlled from a single point and scaling to multiple thousands of remote sites. Likewise, it achieved FIPS 140-2 (federal encryption standards) certification for its satellite router product, making iDirect the only company to offer built-in certified encryption on this type of product.

But such milestones were not the only gains iDirect garnered in 2004. To name a few, the company won a military contract for the U.S. Army’s Connect the Logistician Program. This project allows combat support personnel to transmit supply requisitions in real-time. The initial network launch will call for 200 units to be deployed immediately with a growth potential of more than 1,000 units throughout this year.

Likewise, iDirect expanded into the Latin American and Asian markets in response to the growing demand for broadband access, particularly networks that can support voice, video and broadband IP over satellite. In addition, the company announced that the Puerto Rico Department of Education selected it to support a contract to provide high-speed Internet connectivity to 1,539 school locations throughout Puerto Rico.

Through Kealey’s leadership, iDirect won recognition as the seventh fastest growing technology company in Virginia and ranked in the top 100 in the United States by Deloitte and Touche as well as Inc. 500, all consecutively for 2003 and 2004. In addition, Kealey made the top three ranking of Ernst & Young’s Entrepreneur of The Year award. As such, Kealey assured his place as an innovative leader destined to further establish his niche within the global satellite market, and won Via Satellite‘s Satellite Executive of the Year 2004 award.

Established in 1994, iDirect Technologies was founded by engineers working in the satellite data transmission arena. The company first dedicated itself to the development of satellite modems for virtual private network (VPN) applications. In 1998, the company released the DAMA NetModem broadband router, strategically enhancing iDirect’s technology offerings to address the Internet and related broadband services. Later, the company launched the NetModem II product line and followed up with the introduction of its advanced hub chassis solutions.

Today, iDirect Technologies provides its two-way broadband IP access over satellite solution through a channel distribution strategy employing a worldwide network of service providers and network operators.

One of the major vertical successes iDirect garnered has materialized in the private network management arena. Regardless of vertical market, the ability to deliver broadband access to remote facilities is a critical component to any organization’s productivity and efficiency. But unless the remote access can also support all of the organization’s business applications, it is not being fully utilized. iDirect not only recognizes that important point, but also conducts business in a way that client objectives are met and networks installed are indeed fully utilized.

With the proper network in place, customers can gain broadband access that can handle the richest of media content. iDirect Technologies products support throughputs, with speeds up to 18 Mbps downstream and 8.4 Mbps upstream. In addition, customers gain increased bandwidth efficiency, allowing automation of identifying, and classifying and prioritizing data traffic across the network to provide flexible service and application options to the end user.

In addition, remote locations no longer need to have content security concerns when the proper broadband network is in place. Proper platforms put in place by iDirect enable the deployment of government- or corporate-approved VPN solutions over satellite networks without loss of either transmission control protocol (TCP) performance or support for real-time applications such as voice-over-Internet protocol (VoIP) and streaming video.

But end users are not the only beneficiaries of a satellite-enabled broadband connection. iDirect, though selling directly to an enterprise client, also works with system integrators and other strategic partners in an effort to maintain a solid market share and keep its competition at bay. For network operators and system integrators, iDirect can support bandwidth needs regardless of location, topology, requirements or application. iDirect provides broadband business-class IP solution over satellite with integration of IP routing capability and application prioritization for satellite transmission. The company’s solution provides data speeds up to 360 Mbps per chassis; configures multiple chassis in the same hub; accesses five satellites from a single hub chassis; delivers real-time services like VoIP and video; and supports star, mesh, SCPC and hybrid networks.

One of the main objectives for any network operator is to improve network efficiency. iDirect’s Network Management System (NMS) increases network efficiency, supports individual site requirements and maximizes network reliability. From one GUI script, network operators can direct all configuration and control capacities, including the ability to send software and firmware updates over the air to remote locations; access graphical views of the network layout and configure all system parameters; utilize tools for both active and passive investigation of network behavior; monitor graphical tools for querying and displaying network statistics; and offer customers the benefits of the wireless world.

These are just a few examples of the innovation iDirect has accomplished. But having cutting-edge products available is just the first part of a successful business plan and Kealey has taken his management team beyond the hardware side to a business philosophy of providing complete customer service. His ability to work closely with his customers, to manufacture customized solutions, and to expand iDirect’s presence, not only into various verticals but also throughout the world, propelled iDirect into a strong market position others struggled to attain in 2004.

As part of our annual award process, Kealey discussed his views regarding the state of the global satellite industry, the forthcoming broadband service market transmitted via satellite and the future growth potential for satellite products and services with Via Satellite Editor Nick Mitsis. Here is what he had to say:

Nick Mitsis (NM): Looking back, how would you describe the year 2004 for iDirect?

John Kealey (JK): The year 2004 was one of the strongest years for the company. We entered the year cash-flow positive with no additional investment needed which was quite significant because the executive management team could concentrate on spending the entire year building the business. Immediately as an entire company, we formulated our objectives. Our first objective was to have every team put together its yearly goals, and then hone in on the 10 most measurable actions slated for follow through. Before 2004, we did not have a large global presence so that was one of the major action items. With the major financial hurdles behind us, we now had the opportunity to do that. We also set forth a strategic plan to build and introduce new products, sell into bigger networks and to grow our workforce. We entered the year with 50 employees and ended with more than 100.

NM: From your perspective, what were the major milestones for iDirect in 2004?

JK: We definitely had many, but I would say the top milestones from my perspective are as follows: operating at a profitable state; winning the Puerto Rican deal, that was our first significantly larger broadband network deal signed to date; doubling our workforce with no turnover and quickly assimilating the new team members; our marketing success, which through such efforts as increased tradeshow exposure and multi-faceted targeted campaigns helped expand our brand and get it in front of the right customers; and enhancing our sales philosophy by becoming a complete partner with our clients, beyond just selling products.

NM: I know this new sales philosophy is one of your greater business passions; can you expand on what exactly an iDirect client receives upon signing a contract?

JK: The providing of technology is constantly evolving. What also needs to evolve is the business relationship beyond the engineering. We become partners with our clients, being available for them and also asking them for their input on what products and services we can offer for their future needs. If we don’t have it on-hand, we work on creating it. We want to help them build their business because if they are successful, we are successful. Likewise, we proactively give them leads. Our management team challenges everyone at iDirect to become a stronger business partner. We are not just pushing product. Our clients end up receiving a team of motivated and results-focused individuals that want to live with them and assist them in any way possible as they go about growing their business and services.

NM: Even though much of the business application is still in its infancy, how has the world of satellite-enabled broadband evolved throughout 2004?

JK: Conversations do not stop anymore. The network technicians are much more educated today in what they want, need and more specifically, how satellite fits into that mix. Likewise, we have seen a push for hybrid networks. Satellite is not going to take over terrestrial, but rather, work in conjunction with an established terrestrial link. There has been a significant growth, I have seen, in the push for anytime/anywhere IP connectivity. With the growing popularity of voice over IP (VoIP), there is a much better market for satellite broadband today in 2005 than there was in years past.

NM: How would you describe today the global satellite industry in regard to its business validity within the telecommunications market?

JK: We are finally in a very good spot for satellite technology business growth. The economic cycle is shifting toward the positive again and as more private equity firms enter the playing field, validating the financial validity of this industry, it will only help in pushing product and services out the company door. I believe this is a great time to be in satellite and it will remain that way for some time to come. We are going to see renewed innovation from equipment and service providers. With the emerging economy and markets such as broadband and HDTV, there will be a significant market demand for satellite-enabled products and services. All of these advancements have been healthy for the growth of satellite-enabled broadband applications.

NM: One rapidly growing market segment we are seeing gain significant ground is the expansion of hybrid networks for complete communications from point to multipoint. What are your thoughts regarding the growth of a satellite/terrestrial platform mix offering?

JK: The demand for such service is here today. However, we, as an industry, have to drive down the cost associated with such a hybrid offering. The entire network package has to be lower in its price per bit per service. The network technicians today are much more educated in what they want and how they want to incorporate satellite into an existing platform. Therefore, we have to more competitively cater to those needs and one way of doing so is with a competitively priced hybrid solution.

NM: In regard to the global communications satellite industry, what more needs to be done in order to expand its market share and increase its customer base?

JK: We need to further build brand awareness among the CTOs and CIOs of the major corporations. The thing we do wrong is that we tend to get wrapped up in our technology. We need to tell the end users what it really means to use satellite as a network transport tool. And I stress that we, collectively as an entire industry, need to do this. In many cases, the general perception of satellite products and services is outdated. The technology has come a long way in the past few years and the awareness for that capability has not kept pace. Our focus should be on improving on this awareness as an industry and building market segments that can push products off our shelves. Once the markets are in place, we can then focus on competing between each other for those contracts. We want to see success for ourselves and for our competitors as a whole. As past failures in this industry have shown, the negative impact upon the industry is long lasting. We are seeing very positive growth in an industry that is healthy, however we could improve upon that if we can collectively work to do away with those outdated perception issues.

NM: What’s the next step once lines of communication are open and enterprise end users are being more receptive?

JK: It definitely goes beyond talk. We have to take action to make sustainable business happen with any client, not just the enterprise end users. Once you have early adopters on board, you must pool them within their respective vertical markets and work with each client to develop the next generation network, making it highly attractive to the rest of your potential customers that have yet to sign a contract. It is a collective effort on both sides of the negotiating table.

NM: Which global regions do you see having the most profit potential regarding satellite products and services within the next five to 10 years?

JK: Honestly, I see potential in all of them. Asia, Latin America, the Middle East, Africa and Eastern Europe are showing the strongest indicators of satellite-enabled products and services growth. More specifically, Africa continues to be a very strong market with many opportunities for VSAT and backhaul applications. Unlike the United States and Europe, though, these regions offer a different dynamic in regard to doing business. You have to be able to meet with them in their region, have perseverance and establish relations with the highest-level decision maker you can find within each of the client base.

NM: How are you seeing the longevity of the government/military market remaining a significant customer of satcom services?

JK: This is a very successful market and we do not anticipate a dip in it anytime soon. By far, some of the most important needs for military communications today are mobile and encrypted transfers of information. Deployed troops must be assured that they have broadband connectivity whenever, wherever. At iDirect, we have spent much time in discussions with the U.S. Defense Department. Not only did our conversations relate what our specific offerings are, but also how we can make technology more beneficial for them. If we do not already have something built, we can create it to suit their specific needs. The bottom line: today’s soldier needs mobile connectivity, rugged equipment and secure lines of communications from commercial transmission providers. If we can deliver those things, then this relationship will be a good match for years to come.

NM: What major events will iDirect look forward to in 2005?

JK: Our corporate objective is to expand our addressable market, continue to expand our product portfolio and bring enhanced products to our customers. In addition, we plan on further expanding our geographic regions. This is definitely a good time to be in the satellite business.

Nick Mitsis is the editor of Via Satellite magazine. He also sits on the board of SSPI’s Mid-Atlantic chapter.