Smart Cards: New Verifone Chief Hits the Ground Running

Verifone Inc., which prides itself on moving at Internet speed, may have outdone itself in the way it just installed a new chief executive officer.

Hatim Tyabji, the payment automation company's leader since 1986 and something of a legend in Silicon Valley entrepreneurial circles, announced March 24 that he intended to retire by yearend. He seemed to have a gradual transition in mind. One of his senior executives guessed the search for a successor would take a short couple of months.

Not two weeks had passed when the announcement came, and it is hard to tell which was more surprising, the swiftness or the name.

Mr. Tyabji, in concert with his boss, William Russell of Hewlett-Packard Co.'s enterprise systems group, had settled on Robin Abrams as president and chief executive officer.

Ms. Abrams joined Verifone only a year ago as vice president and general manager for the Americas, overseeing sales of terminal products and other operations in the company's biggest markets and growing conversant in the smart card and electronic commerce developments that Mr. Tyabji insisted would redefine its future.

Employees knew about the appointment on Friday, April 3. The public announcement went out the following Monday, and the next day Ms. Abrams held her first "all hands" meeting in the atrium of Verifone's new building in Santa Clara, Calif.

A road warrior for the last 13 years, working for Unisys Corp. and Apple Computer Inc. before joining Verifone, Ms. Abrams said she wanted to head off the "head office issues" that can arise if a new manager is not completely up-front.

Ms. Abrams is nothing if not up-front, which may help explain why Mr. Tyabji, who has described his own communication style as "take no prisoners," had such high regard for her.

"I wanted them to know I was accessible," Ms. Abrams said of her staff. "I wanted to set some expectations around other organizational announcements that may be coming-I don't want them getting all worried with speculation and rumors. And I promised to come back at the end of April" with more news about the company, its structure, and strategies.

Interviewed shortly after she got those matters out of the way, Ms. Abrams was also up-front about the hard work ahead.

"I'm not sure I have the answers yet," she said, "but how are we going to take this new generation of client/server products to the market, make customers happy the way we know how, and make the same kind of money as we have in the terminal space?

"We have a hardware-oriented, 'go to the market' model in our blood," she said. Yet Verifone, still primarily a point of sale system supplier, has shifted its weight decidedly toward Internet commerce.

"We have to learn how to do those two things, and we're not there yet," Ms. Abrams said. Internet business "requires different allocation of capital, a different kind of sales force, a different approach to customers, and has different kinds of return."

"We are farther ahead than anybody else," she added, "but we have to keep moving faster than anybody else if we are going to stay ahead of some of these very interesting start-ups coming along."

Ms. Abrams, a few weeks short of her 47th birthday, comes across as a good-humored, straight-talking, high-energy doer who snugly fits the Tyabji/Verifone mold. But she readily admits to be stepping into some big shoes far sooner than she had expected.

She said, "I can only think of a piece of advice I got from Bill Simmons," executive vice president of Novus Services, a Verifone customer: "'Get your own pair of shoes.'

"I guess I'll be keeping my high heels."

She said she expects Mr. Tyabji, still very much on the premises, to be "free with advice and counsel."

Mr. Tyabji, 53, described Ms. Abrams as "an extremely accomplished general manager and sales and marketing executive with a deep knowledge of financial services." That came in part from 11 years with Norwest Corp. in Minneapolis, where she went after getting a law degree from the University of Nebraska.

The legal education and extensive banking experience make her unique among technology company CEOs. On top of that, she has spent much of her life selling to financial institutions-and in her Verifone Americas job also to the retailing, health care, government, and labor management markets.

She said she has been enlightened by stints for both Unisys and Apple in Asia, where smart cards and other advances have taken hold faster than in the United States.

"They rethink the supply chain," she said of her Asian contacts, contrasting that with the less freewheeling "silo" tendencies of U.S. organizations.

"Two or three banks that we and HP have worked with have taken those walls down, and they are the ones we see moving the fastest," Ms. Abrams said.

Verifone can be a "facilitator" in that way with other banks, she added. That is the kind of missionary drive Mr. Tyabji instilled.

"One of the biggest reasons I came here was because of Hatim," Ms. Abrams said. "I first met him years ago, and here I had a year with the guy. Most people never will have that. He is a true humanitarian kind of manager. He does the right thing for the company, but he does right by people. There are people in Silicon Valley who will do anything for Verifone because of what he did for them."

The two crossed paths at Unisys. Ms. Abrams, who had spent 11 years at Norwest, mostly in the information technology area, joined Burroughs Corp. in Detroit in 1985. Within two months it was merging with Sperry Corp. to create Unisys.

Mr. Tyabji, who worked 13 years at Sperry, was not happy with the post- merger prospects and left the next year for Verifone, then a $30 million maker of point of sale terminals with mostly venture capitalists on its board. Traveling tirelessly and communicating heavily by e-mail, Mr. Tyabji turned it into a multinational enterprise, taking it public in 1990 and steering it toward Internet commerce-hoping to duplicate its point of sale success-starting in 1995.

In 1997, with more than 3,000 employees and annual revenue approaching $600 million, Mr. Tyabji presided over Verifone's $1.3 billion acquisition by Hewlett-Packard, insisting that Verifone and its culture remain distinct as the two companies felt out their synergies.

Ms. Abrams stayed with Unisys through 1993, then went to Apple, where her posts included vice president and managing director of the Asia division. She followed others who came from Apple, such as Verifone senior vice president Lloyd Mahaffey, who built the consumer systems division and plays key marketing and strategy roles.

Another Apple alumnus, Michael Mount, is spearheading merchant commerce strategies. They have changed significantly over the past year as the Internet commerce market evolved in ways that Verifone and others did not anticipate. The emphasis is now on getting the vPOS software into virtual "storefronts" through alliances with system developers and Internet service providers.

"These are shifting sands," Mr. Mount said. "Nobody has gotten the numbers right."

Verifone has shown its ability to keep pace, offering products such as the Personal ATM smart card device. And it has been in the forefront of the credit card industry's Secure Electronic Transaction campaign-to the point of expressing impatience with MasterCard and Visa's promotion of the on- line security standard that they initiated.

Given its speed and focus, Verifone seems to take even the changing of a CEO in stride.

"Hatim's leaving may be more profound than some other changes, but this company has been constantly transformed," said Roger Bertman, vice president of corporate development and now the longest-serving senior manager, at six and a half years.

"When we went down the electronic commerce path, we didn't know where we were going exactly, but it transformed the company," he said. "We're really excited about Robin. She'll be great."

She may not be seen much around the office. She said she does not like the "ivory tower aspects" of headquarters.

"My tendency is to be out in the channels, with a lot of customer involvement," she said. "But we also have to get product management disciplines instilled in this company. We have to get better and better if we are to stay in front of these new products."

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