Leto Thinks Big for NIC
The company's new chief plans to add NIC to his resume of billion-dollar successes
On his second day of work at Network Imaging Corp., a tan-faced Jim Leto looked relaxed in khaki pants and a v-neck sweater. At 52, the former chief executive of PRC Inc. has found his retirement plan.
Leto left PRC, the McLean, Va.-based, $712 million integrator, in early March and landed the position of president and CEO of NIC, Herndon, Va., late last month.
NIC's new chief is today described by many federal executives as an industry angel, but not an angel that makes financial investments. Instead, Leto brings a wealth of career experience, which has long been tied to the integrator channel.
Leto plans to steer the $65 million developer of multimedia-based storage management software to value-added resellers and integrators across the nation. The strategy is a departure from the developer's earlier sales schemes, which targeted end users directly.
Leto's plan is expected to involve partnering with an array of integrators in such diverse sectors as telecom, financial services, insurance and health care. Meanwhile, the six-year-old company is expected to strengthen existing partnerships with integrators such as Lockheed Martin Corp. of Bethesda, Md.
The new NIC integrator partners will be focused on specific vertical markets to avoid channel conflict and will likely be offered authorization exclusives in certain markets. NIC's chief said he wants to avoid working with too many integrators in a given market. "It compromises pricing and the sales process, and you look like an idiot in the eyes of the end user," said Leto.
Leto is also planning to increase NIC's work with the federal government. The company has contracts pending with systems integrators that should boost its business with the federal government. Most recently, NIC won an award from the Bureau of Public Debt within the Treasury Department to install the 1View:COLD/ES product. It will track the sale and ownership status of millions of savings bonds sold by the U.S. government.
"The government is more and more pressed to find a way to economize, and we provide the technology that they need," said Mark Wasilko, senior vice president of marketing for NIC's products. "Jim has extensive contacts in this market (so there's) good synergy."
NIC's customer sites also include Lucent Technologies, BellSouth, Veterans Benefit Administration, Swiss Reinsurance America and Avon.
Jay Nussbaum, senior vice president of Oracle Government and a competitor of NIC's 1View products, is positive about Leto's move to the company.
"He has now worked for big companies like AT&T and medium-sized firms like PRC and now a startup," said Nussbaum. "It's a nice way to balance out your life. The only thing left for him after this is to run for senator."
Leto left PRC shortly after selling its infotech division to Litton Industries for $425 million. In March 1995, he sold the company's realty business, worth $60 million, to News Holdings Corp. and the environmental division, worth $120 million, to Tetra Tech Inc. During his four years at PRC, he attracted a string of large government contracts with the Department of Defense, the Federal Bureau of Investigation, the Drug Enforcement Agency and the Commerce Department. During his time as CEO, the company experienced annual operating income growth of 40 percent, with revenues increasing 10 percent each year.
Leto left PRC in the hands of Bill Hoover, who recently left to join BDM International Inc.
"I sold myself out of a job," said Leto. "You don't need a chairman of the board, CEO and president supervising one business unit of a large company."
When Leto announced he was leaving PRC, Leto planned to sit on a dozen boards, work 150 days a year and build his retirement home in Michigan.
The executive search firm of Heidrick & Struggles stepped in to guide him to the right boards. He now serves on the boards of Government Technology Services Inc. and Federal Sources and has been nominated to sit on three others. NIC was one of the companies requesting his presence on its board. After researching the company and its products' fit in the market, he became an outside company director.
NIC Chairman Robert Bernardi quickly offered Leto the job of CEO, and after some reluctance he accepted the position. The lure of a strong management team prompted Leto to forego his retirement plans.
Leto sees the transition from a large company to a smaller company as a great challenge.
"It's fun because it's like a piece of clay that you get to shape and give personality," said Leto. "This isn't an ego thing for me, I'm having fun."
As for the future, Leto sees two options: NIC growing into a billion dollar, publicly traded corporation or NIC as part of a bigger company.
"It's not unusual for software companies to be sold. There has been some interest to acquire this company," said Leto. "In the end, I hope I can do for this company what I did for PRC."