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A fresh start, ambitious plans

Published Sep. 4, 2005

John Koehler doesn't act like your typical telecom executive struggling through a devastating industry downturn.

He relocated the headquarters of his company, Vital Network Services, from Naugatuck, Conn., to Tampa last week, hired about 40 employees here recently, and is mapping out plans to grow revenues by at least 20 percent a year.

He and his partners even intend to take their company public within two years if revenues jump, as they expect, from $25-million to $50-million. "I don't want to get overly optimistic but that's our goal," Koehler said in an interview Monday.

Not bad for a company that was in federal bankruptcy court in San Jose, Calif., this time last year.

The story of Vital's survival and its unusual path to Tampa has its roots in the Sept. 11, 2001, terrorist attacks.

Early in 2001, Vital Network was a unit of General Datacomm. It provided data, voice and video network services to about 1,600 customers in North America with round-the-clock support.

Another service provider, Mayan Networks, bought Vital in June 2001, closing the deal in early September, a week before the terrorist attacks.

Mayan's bondholder was Cantor Fitzgerald, a brokerage firm that lost its headquarters and many of its employees in the World Trade Center disaster. Needing cash quickly, Cantor Fitzgerald liquidated its holdings in Mayan, forcing the company and its new subsidiary, Vital Network, into bankruptcy.

Koehler, an executive with Paradyne Networks of Largo at the time, recognized the opportunity. Koehler, who ran a networking service company in Clearwater called TechForce Corp. in the mid-1990s, had admired Vital and its customer base for years. He liked that the company was a "pure play" focused on business services.

He enlisted a handful of other investors to join him in bidding for the unit, including Paradyne chief executive Sean Belanger. The group wound up buying the company's assets out of bankruptcy court for $10.7-million. Considering the operation had sold to Mayan for $26-million earlier that year and that its asking price hovered around $70-million in 1998 during the dot-com boom, Koehler felt he was getting a steal.

Koehler, now Vital's president and chief executive, owns about 20 percent of the company and two other top investors _ venture capitalist Paul Ferri of Matrix Partners and Carl Russo of Equanimous Ventures _ own 25 percent apiece.

In addition to 50 employees in Tampa, it has 50 more in a support center outside London and 50 in the field. About 3,000 technicians are under contract to handle customers in the 60 countries where Vital does business.

One of Koehler's first moves was to relocate the 50-employee Connecticut operation to Tampa. Only about 10 of the employees in Connecticut are transferring here. Koehler hired 40 employees in the bay area and aims to keep growing quickly. Vital leases 12,500 square feet in the Tri-County Business Park on Race Track Road and is expanding by another 12,500 square feet by Jan. 1.

Koehler said his company is small enough and the network services niche big enough that he cannot blame a down economy for not growing quickly. In fact, as a service provider, he views Vital in better financial shape than a tech company waiting for its customers to spend money to upgrade to the latest products.

"You may not be buying anything new but you still have to have (tech) support," he said. "We're fairly recession-proof."

_ Jeff Harrington can be reached at or (813) 226-3407.