Compugen CEO named CDN newsmaker for 2002

Harry Zarek is a hard man to get a hold of.

But then he’s been busy these past six months, reuniting the services and product divisions of his company after selling the former to now defunct competitive local exchange carrier (CLEC) Norigen Communications Inc. That, and developing and marketing

a new product called Emerge – something Zarek calls enterprise resource planning (ERP) for IT departments.

In truth, Zarek has been busy for more than 20 years. He founded Richmond Hill, Ont.-based Compugen Inc. in 1981 after graduating from the University of Toronto with an undergraduate degree in engineering and a PhD in physics. As the “proverbial student who started a business,” Zarek says his timing couldn’t have been better.

“That was the year IBM announced the PC,” he says. “I just thought, this is a great opportunity. Before that, the only computers were raised-floor and glassed-in. Then here’s one you can actually put on your desk.”

Before 1981, there really was no software business, let alone software and technology consulting, he says. But from that point on, “it was all consulting; it was all, ‘What kinds of new things can you do with these new machines?’”

Zarek’s first partner left early on and was replaced in 1987 by business manager Cyril Baldachin. “Back then, Harry was somewhat inexperienced,” says Baldachin. “He hadn’t been through the discipline, I guess, that a large corporate environment provides. I had. It was a good match.” When Baldachin started with Zarek, the company had a staff of 10. By the time he retired in 1999, there were 250 working in nine offices.

“You’re starting to get me nostalgic. This is what I really wanted to talk about,” says Zarek of his early years. But he’s a little more reticent when it comes to the topic of Norigen. “That’s old news,” he sighs dismissively.

But not too old. Zarek sold the services piece of his company to Norigen in 2000. Many believed that the turn of the millennium and market deregulation heralded a golden age for telecommunications companies. But those aspirations quickly vanished as one CLEC after another declared bankruptcy, claiming an inhospitable economy and an uphill struggle against incumbents.

Norigen wasn’t spared either, and went into receivership in July 2002. “To me what’s surprising is you have the brightest minds, MBAs, PhDs, experienced business people, and no one could see the fundamental flaw of the model,” comments Zarek.

He describes his two years with Norigen as “the equivalent of boot camp in telecom. It was hard and it was tough, but we learned a huge amount.”

There’s wisdom in the telco approach to billing on a monthly basis, says Zarek. “We’re looking at what services we can offer – and we’ve identified a number of them – that can be billed on a monthly recurring revenue basis,” he says. “It’s more predictable for us, it’s more predictable for the customers. They know exactly what they’re getting.”

Those services include help desk services, managed infrastructure services, and even value-added services for the data hosting market. “In the ideal situation, we would combine that with what we’ve learned in the telecom space and really move towards this utility model of computing,” he says.

For Zarek, the IT services business represents both his company’s past and future, but for years the industry perceived Compugen as “just a box pusher or a product company. We’ve worked hard in the past five years to disabuse people of that.”

It’s ironic, then, that what landed Zarek and company in the news recently was a software product called Emerge, which won this year’s Branham award for “e-Business Enablement of the Year.” The company went shopping for a software tool to help manage its IT inventory cycle, found there was nothing out there to fit its needs, so promptly created its own.

“Harry’s a very nice guy, very determined,” says his former partner Baldachin, “but as stubborn as hell. He’ll tell you that himself.” Zarek has since sold the application to more than 100 Canadian customers and he’s looking for more.

If it’s hard to get Zarek on the phone this year for an interview, it might just be impossible next year.

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Jim Love, Chief Content Officer, IT World Canada

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