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Allworx eyes growth as part of Windstream

Rochester Business Journal
March 22, 2013

Allworx Corp. is expected to have a significant presence in Windstream Corp.'s new facility at the Seneca Building, the former Midtown Plaza site.
 
The company, which develops phone and network systems for small and midsize businesses, saw tremendous growth as a subsidiary of Paetec Holding Corp. and expects to see more growth as part of Windstream.
 
Late last month, Windstream announced it was on pace to move into the new facility in early July.
 
Windstream, based in Arkansas, sells data and network products. The company had revenues of more than $6 billion in 2012. Allworx became a part of Windstream with the acquisition of Paetec in late 2011.
 
"Windstream is a much bigger company than Paetec," said Chris Hasenauer, vice president and general manager of Allworx. "We've already trained 250 of their technicians to go out and do installs for us.
 
"They've got a sales force of more than 1,000 people. A lot of the equipment they sell is Allworx, which hits their customer base really well."
 
Allworx has seen revenue growth of more than 250 percent over the last three years, Hasenauer said. The company has 80 employees, 60 of whom reside in the Rochester area. The entire local workforce will move from its offices at the Techniplex in East Rochester to the new Windstream facility.
 
A big part of Allworx's growth has been the company's focus on the small-business market, he said.
 
"Our competitors like Cisco Systems have looked more at the enterprise level," Hasenauer said. "When they do look at small-business space, they take enterprise-level technology and try to bring it down to the small-business level.
 
"The problem with that is that small businesses have different needs than enterprise clients. At Allworx, we design our systems specifically for that space to meet their exact needs at a price point that is much more reasonable than a company like Cisco."
 
One of those small businesses is Princeton Properties, an apartment management company based in Lowell, Mass. Princeton Properties switched from an older dial-up phone system to an Allworx voice over Internet protocol system at the start of the year to increase efficiency and cut costs.
 
"Our old dial-up system featured antiquated equipment," said Mark Hammond, an IT administrator. "It failed us a few times, and getting someone with the technology to fix it here took way too long. The new system from Allworx has been great so far. We're actually saving more money per line now. The cost was far below other companies with similar technology that we looked into."
 
Another key to Allworx's growth has been its alignment as an equipment manufacturer with a carrier, first Paetec and now Windstream.
 
"A carrier owning its manufacturer drives costs down when it comes time to change technology for clients," Hasenauer said. "For Allworx, having the divide between the carrier and the manufacturer knocked gives us stronger, long-term relationships with clients who are going to continue to buy our equipment as technology develops."
 
Allworx was formed in 1998 by three former project managers and engineers from Xerox Corp. The company initially was InSciTek Microsystems Inc. It unveiled its office communications product, called Allworx 10x, in 2001. By 2006, InSciTeck had raised more than $13 million in investments. In 2007, the company changed its name to Allworx Corp.
 
During much of that time, Hasenauer worked as a vice president of finance for Paetec. He left that post in July 2006 to become chief financial officer for Allworx.
 
Soon after, Hasenauer ran into Paetec co-founder Arunas Chesonis at a networking function and told Chesonis about Allworx. Chesonis asked Hasenauer to set up a meeting. Paetec acquired the company roughly a year later.
 
"It was a great fit for both companies," Hasenauer said. "We had tremendous growth under Paetec, and we expect that growth to continue under Windstream."
 
A graduate of East High School, Hasenauer welcomes Allworx's move to the new Midtown facility. He has photographs of the old Midtown Plaza interior, the Little Theatre and the Rochester skyline hanging in his current office.
 
"I grew up in Rochester, so for someone like me it's kind of cool," said Hasenauer. "For the people here who didn't, they worry about the longer commute times and more practical issues.
 
"We've been here in East Rochester for six years. A lot of people live very close to here, and they don't know what is downtown that they can go to at lunchtime."
 
Still, Hasenauer said, Allworx's staff will benefit from being close to Windstream's other entities, such as Pinnacle Software Corp., which will move from Fairport to the Midtown facility, and Windstream's local sales force.
 
"The facilities are going to be much better, and we'll be able to have our developers interact with Pinnacle's developers," he said. "I think the key to continued growth for Allworx will be capitalizing on being part of Windstream while still having that drive of being a small company that's trying take over the world."

3/22/13 (c) 2013 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email service@rbj.net.


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