The brains behind Telstra software


Charlotte Yarkoni certainly has the credentials to be the real US tech deal, studying computer engineering at top tier colleges in her home country, first at University of California’s storied Berkeley campus and later at Georgia Tech.

“Then I started writing code for a living,” she said.

Eventually Ms Yarkoni found her way to the US virtualization company VMWare via EMC after an earlier career in telcoland in a series of AT&T business units. She is credited – at least in part – with EMC’s big cloud move.

“We had an open source platform as a service and moved into cloud computing, it was a pivotal moment for EMC at that time when Amazon was still best known as a book retailer.”

In 2013, she was poached for a job at Telstra, which had begun to move seriously into the cloud business as it began stretching for growth businesses in what the industry calls adjacent markets. These are the logical next technology step from Telstra core networks business.

For Ms Yarkoni, a South Carolina native now using Seattle as her “base camp” is part of an elite Telstra tech mafia in that city. This includes Telstra’s freshly-minted Group Executive for Technology, Innovation and Strategy, the former Nokia chief Stephen Elop.

And then there’s Ms Yarkoni’s husband, Israeli-born Erez Yarkoni, who followed her to Telstra as the company’s Chief information Officer, where he “heads and manages all IT system & IT infrastructure planning, development, support and operational activities and establishes and manages Telstra’s standard IT operating environment.

She divides her times between Seattle, Sydney – which she insists she has fallen in love with – Asia and Stockholm where another of Telstra’s growing portfolio of software companies is based.

“I began by understanding Telstra’s challenges and the Board view on investment, although I had worked for another telecommunications company many years ago. Telstra’s business itself was being disrupted by software,” she said.

Telstra has tried this strategy before with varying success, from its disastrous dotcom era bet on the Hong Kong-based PCCW joint venture.

The timing of this investment, effectively moments before the dotcom crash, was so exquisitely bad that chief executive Ziggy Switkowski’s and chairman Bob Mansfield’s were literally made into the walking dead. Their reputations were so damaged that the eventual board coup against them took on an air of inevitability.

Mr Switkowski’s successor Sol Trujillo, ironically reaped kudos from a strategy set in train by Switkowski, who had been frustrated in his attempts to extract value from the Telstra directories business Sensis at the top of the market.

But an experiment by Switkowski lieutenant Sensis boss Bruce Akhurst in dispatching to Bejing an (still) unsung but tech savvy group of mid-ranking executives from the group lead by Robert Rath and Luke O’Neill, would reap huge rewards.

They tipped modest sums into Soufun and Autohome. Yet even as these companies became market leaders in China, they were only ever add-ons, rather than technology assets that could be leveraged by Telstra’s other business.

Telstra’s next chief, David Thodey, who is steeped in the thinking of the evergreen technology giant IBM, wanted software that would link with Telstra products and improve its value to customers, locking them in ever tighter.

He sold Soufun for $433 million and floated Autohome. And Telstra’s recent sell down of its stake in Autohome is set to yield a payday of more than $1.6 billion, effectively providing the funding for Telstra’s latest software play.

Under Ms Yarkoni, who was recruited by Mr Thodey, Telstra is targeting the purchase or building of intelligent video and cloud applications as it continues to broaden the scope of its business and the breadth of its offering into Asia.

While she identifies and sponsors potential acquisition projects, the grunt work is carried out by a crack team of dedicated Telstra merger and acquisition specialists.

Ms Yarkoni so impressed David Thodey that he handed her the keys to the Telstra Software Group – the unit he created – in late 2014

Telstra Software Group is now home to the company’s US$500 million Silicon Valley media streaming software group Ooyala, which Ms Yarkoni assured InnovationAus.com, is doing well. “It has customers all over the world” she said, but remained tight-lipped on any further comments on its financial performance.

In October 2014, together with Annie Parker, she founded the startup accelerator muru-D “to make sure we understood the extent of the start up ecosystem in our own backyard”.

“But we need to be globally relevant and set up a second muru-D facility in Singapore in April,” she added. It is worth noting that the launch of that Singapore outpost happened to be Mr Thodey’s last day at Telstra. Organized months earlier, in presenting software in Asia it inadvertently signaled the intentions for Telstra’s future.

The Software Group’s other big project driven by Ms Yarkoni has been the creation of a developer portal that has already attracted 15,000 registered users. Its creation suggests that her bold assertion that Telstra will “build as well as buy software” for itself and its customers, now has a credible platform from which to launch its ambitions

“It’s a place where developers from inside and outside Telstra can interact,” Ms Yarkoni said..

In some ways, this platform represents a squaring of the circle for Telstra, which, like other former monopoly telecommunications companies, had a key asset that helped to maintain its dominance and margins: That is, it had a rock solid, custom-built billing system (and the software engineering chops that building such a system implies.)

If Ms Yarkoni has her way, Telstra may well have the makings of an infinitely more powerful 21st century upgrade, a powerful software platform that can offer basically limitless scalability and bewildering, constantly, evolving capabilities that the engineers of Telecom Australia could only dream about.

Do you know more? Contact James Riley via Email.

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