VIEW FROM THE TOP: Future beckons Netscalibur chief - Ben Bold talks to the ex-CEO of Merloni and Olivetti about comms challenges facing his new venture

The lobby of the Metropolitan hotel on Old Park Lane seems stuck in

a futuristic timewarp. The decor is minimalist - dark wood and cream -

and the walls are adorned with modern, textured paintings. The ambient

chimes of a keyboard can be heard over loud-speakers, synthesised chords

that play in a never-ending loop. The music says The Future, but this

future sounds tedious and monotonous - charges that cannot be levelled

at Netscalibur and its Italian founder and CEO, Francesco Caio.



Caio is a tall, thin, black-bearded man with large square-framed

glasses.



He bears a passing resemblance to the Italian professor of semantics

Umberto Eco, author of The Name of the Rose. Indeed, just as Eco is an

expert in his field, Caio shares his specialist background and vision -

where Eco mostly casts his gaze back, however, Caio looks into the

future.



Netscalibur is, Caio claims, a new type of company. Its core buzzword is

akin to that of the public relations industry - communications. This

applies in terms of what it offers and the manner in which it does

so.



Netscalibur avoids the use of technical jargon and 'uses the language of

business', Caio says. It is a company that sells communications and

technology solutions, with a consistent identity throughout Europe.

'There is value in being local and European at the same time,' Caio

says. 'Our programme ensures that experience in the UK is taken through

to Italy and Germany'.



Netscalibur is known as such across all its markets and offers companies

internet-based communications solutions. Rather than maintaining comms

systems in-house, Netscalibur enables businesses to outsource their

web-hosting and e-mail services. It says this offers the client a more

secure and efficient network at a fraction of the cost of private

networks.



On 2 April the company launched a dollars 15m pan-European advertising

campaign, created by Euro RSCG, aimed at strengthening the brand and

driving home the message that Netscalibur's services can help businesses

become industry leaders. This has come at a time when many companies are

cutting advertising spend and highlights the company's assertive

attitude to the internet protocol (IP) market.



The ads play on the relationships Netscalibur has formed with its

customers - indeed, the corporate reputations of its clients are

integral to the campaign. The ad's strapline is 'Work with the best. We

do' and cites well-known brands that employ Netscalibur's services. In

the UK, the campaign features companies such as Siemens and The Daily

Telegraph, in Germany the Berlin Philarmoniker and in Italy the

world-renowned Lamborghini.



Caio says: 'We are proud of our customers and more businesses - not just

large corporates but also small and medium-sized companies - are joining

us every day. The campaign is a critical part of telling European

business that Netscalibur is a proven internet services company,

completely focused on helping companies reach their commercial

objectives.'



Netscalibur does not have a head of communications at present and is

using the services of communications consultancy Blue Rubicon. The

agency reports to Netscalibur head of business development Axelle

Vialla, who is also responsible for co-ordinating marketing. Each of the

three European markets has its own marketing manager, who is involved in

weekly updates with Vialla. There is a focus on internal communications,

with information being disseminated to staff from the ground up, keeping

everyone in the know.



To date, the PR drive has focused on the financial press, communicating

the story of Netscalibur's formation and keeping the media informed of

the company's expansion. Netscalibur's strength in PR terms is that it

has a strong management team and financial backing, and will maintain

its value when the market corrects itself, while internet stocks might

suffer from inflated market evaluation.



'The economic logic of outsourcing increasingly complex web hosting is

undeniable,' Caio says. 'Businesses are looking to the net to provide

accelerated growth and enhanced competitiveness at lower cost.

Netscalibur is helping companies to do both.'



The facts seem to back this up. Already the company has 10,000 business

customers and employs nearly 400 people across Europe.



So what about the brand name? It was developed with the help of brand

design agency Wolff Olins. Netscalibur, Caio says, can be broken into

two components. 'There is a duality about what we do,' he says. ''Net'

refers to the internet and 'scalibur' to customer care. We are a safe

harbour, a host for applications that also inspire companies to do

better in business. We not only host connectivity but are a hero in

improving profitability.' The brand name, Caio says, was pre-tested

across all its potential markets.



The key differentiator between Caio's venture and traditional telecoms

companies is the the lack of a weighty and cumbersome structure. Through

leasing what Caio calls a 'commoditised bandwidth', Netscalibur can move

free of a heavy, bricks and mortar infrastructure.



Most telecoms companies spend lots of money laying cables in the

ground.



Netscalibur's growth model is based on acquiring expertise rather than

making heavily geared investments in readily commodotised

infrastructure.



This allows the company to be more dynamic than its traditional

forebears.



Netscalibur is constantly growing, snapping up companies with a

voracious appetite. But Caio's is not a company that is growing for

growth's sake.



'We are investing in knowledge and expertise,' he says.



The company's aim is to bring the fragmented business IP market

together.



To do this, Caio is buying up knowledge and experience across

Europe.



Caio's track record is impressive and highly relevant to the concept of

Netscalibur. He holds a computer science degree and an MBA and worked as

a management consultant at McKinsey in London for five years in the

1980s.



He ran Olivetti subsidiary Omnitel, Italy's first mobile

telecommunications company, for three years. He was then made CEO of the

Olivetti group, a position he held for just three months, at which point

he was head-hunted by white goods manufacturer Merloni, owner of the

Indesit and Ariston brands.



While at Merloni, Caio introduced English as the working language among

its senior managers and instituted a 'knowledge audit' of the company's

non-manufacturing staff to test their potential for new jobs and

innovative thinking.



At the beginning of 2000, Caio stood down from his job at Merloni and

announced that he was starting up his own project. The venture was

backed by dollars 235m from Morgan Stanley Dean Witter Capital Partners,

TLCom Capital Partners and Goldman Sachs. It is one of the largest

private equity ventures in Europe. Its directors include Adair Turner,

deputy chairman of Merrill Lynch and former director general of the

Confederation of British Industry.



Caio places great emphasis on recruitment and internal communicaitons.

The company's pan-European stance is mirrored in its management

structure. 'I personally believe that to create value you need a

cultural mix of people at the top of the company,' Caio says.



Netscalibur this year won the Internet Service Providers Association UK

Internet Industry Award for Best Business Customer Service. The award

emphasises Caio's central principle of service. His investment in

expertise means that staff are treated well. 'Happy people developing

professional skills in an environment they want to work in,' he

says.



In his time at Merloni, Caio oversaw a management recruitment drive,

recruiting staff from the UK, The Netherlands and Portugal. He intended

this to produce a 'Euro-culture', reinforcing the concept by holding

meetings with top managers in Moscow, Paris and London.



Caio also conducted a survey of the company's 2,500 non-production staff

to establish their capabilities and brainstorm their ideas. '(The survey

was) to discover what people want to achieve, their competencies and

their attitudes,' he says.



Many of his ideas are linked to Caio's previous experiences at Olivetti

and McKinsey. 'I learned how to listen,' he says. 'You have to hold up a

mirror, have a discussion and balance the wisdom of what people are

telling you with facts.'



Caio aims to encourage people to be less passive and become 'thinking

leaders'.



His vision for the future inevitably means further acquisitions. The

company has already spent millions of pounds acquiring expertise across

Europe. Most recently, it bought Munich-based company Securitas Internet

Systems, which specialises in advanced web-hosting. In July last year it

made its first UK acquisition when it bought ISP Direct Connection and

Evolution Systems.



Nevertheless, the company retains its status as a single brand - all its

acquisitions are rebranded as Netscalibur. 'It's not easy but it is

feasible to integrate into one brand at speed,' Caio says.



As someone who has experience of both the old and the new economy, Caio

has already built a brand that ranges from its London headquarters over

the North Sea to Germany and then to Italy. Its list of clients is

impressive and includes Orange, Sony, Panasonic, Kodak and Harvey

Nichols.



Netscalibur aims to open in other European markets too - offices in

France, The Netherlands and Spain are planned. Caio believes that large

businesses will increasingly outsource their e-mail and web hosting and

that Netscalibur will be able to grow at between 40 and 50 per cent a

year.



The company had a revenue of dollars 40m in 2000 and is projected to

break even within the next couple of years. With the launch of the

advertising campaign, it is now up to the supportive PR drive to tell

potential customers and the media that Netscalibur represents a new

model telecommunications company.



Judging by the success of Netscalibur to date, it seems that Caio is

well able to continue his storming of the IP market.



FRANCESCO CAIO



Netscalibur



1991: Assistant to Chairman, Olivetti



1994: CEO, Omnitel



1996: CEO, Olivetti group



1997: CEO, Merloni



2000: Founder, Netscalibur.



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