Verbatim
Information Technology Mogul
Roger Mody
Signals the Wave ofthe Future


by Mary K. Mewborn

In another time and place, Roger Mody’s claim might have been to the Mogul Empire. Instead, it is tothe title IT Mogul and a high-tech services empire. Born of Indian immigrant parents, this instinctivelyastute businessman is as hard-driving and skillfully commanding behind the wheel of his Ferrari 360 as heis in a conference or boardroom, and clearly lives the modern American Dream. At 36, he is a self-mademan, whose personal and professional successes signaled the onslaught of the information age, and haseven landed himself a place of honor on The Palm’s restaurant wall. With movie-star looks and millions ofdollars of his own creation, Roger Mody is a leader in information technology who has propelled hiscompany SIGNAL Corporation to extraordinary heights in an industry which the average American can barelycomprehend. He is a patriarch of his profession, a pioneer in his field, and an inspiration to all whoquest for fortune and fame in this brave new century.

Washington Life: How does a twenty-threeyear old, in 1987, found a company as successful as SIGNAL Corporation?
Roger Mody: I think the entrepreneurialspirit has been instilled in me from a very early age. When my father passed away, I was twelve yearsold...and my mother pulled down three jobs and did everything humanly possible to keep us afloat. We hadyears of significant struggle and quite frankly, the way I was living and the way the world was at thattime was not the way I wanted it to be on a permanent basis, and that’s where, we’ll call it “theentrepreneurial drive,” came to be. It started at the age of twelve.

WL: I can understand your having thedrive, but how did you acquire the know-how?
RM: It was more of a hobby. In terms ofthe company’s genesis, it was based on electronic publishing. In the early eighties, the Apple Macintoshwas a hot technology [in which] very few companies or people possessed skills. We would do proposals forlarge companies that were used to doing things on a manual drafting board. What happened shortlythereafter, and in fact remarkably shortly thereafter, was the [advent of the] world of computer networksand a significant shift in the paradigm from what we call these mainframe legacy systems, to the PCs, themicrocomputers. Because of the publishing business, [and] some of the contacts that we acquired in thatcapacity, we quickly discovered that hey, we are “network-engineering experts.” At the same time, westarted to see more and more external requirements from clients who wanted to shift from the mainframesto the client server or PC microcomputer architecture. So the know-how came as a result of electronicpublishing, primarily in technical documentation [for the IBMs, the Westinghouses, and AT&Ts, just toname a few].

WL: So you weren’t just riding the tide,you were in the forefront with innovative new products and services.
RM: Absolutely...and then once thenetworks became so prevalent in the marketplace, we developed and evolved into what we are now, which is(projected for the year 2000) a $220 million information-technology services provider. We’re now involvedin network engineering, software development, computer programming, telecommunications engineering,help-desk operation, and maintenance.

WL: Who do you consider to be your majorcompetitors?
RM: We’re in what we define now as amid-sized market. As recently as three or four years ago, once you achieved a revenue market of about$100 million you were considered and perceived as a credible “small, large company” (which is a littlebit of an oxymoron), but with all the mergers and acquisitions that have taken place in recent years,that bar has been raised from $100 million to one billion dollars. And some of my peers who areoverseeing billion-dollar companies would submit to me that it’s up to $5 billion now. So, as amedium-sized company, my competition seems to be business units within Computer Sciences Corporation(CSC), business units within SAIC, and certain components of Lockheed Martin, but it’s David versusGoliath in most of those scenarios.

WL: As President and CEO, do you foresee aday when you’ll hand over one of your titles? Where do you see yourself and your company in ten years orless?
RM: Well I’d say, at thirty-six I have alot of options. Certainly within the short-term, which I would define as three to five years, I feel verycomfortable with my existing management team and myself leading us toward revenues hopefully of at leasta half billion dollars within that same time frame. Beyond that, quite frankly, it would be completeconjecture on my part, and I don’t know how to look beyond that window.

WL: Do you anticipate any mergers?
RM: We haven’t pursued any mergers andacquisitions to date, which I think is pretty noteworthy because companies that have grown at ourrate...invariably have acquisitions built into that number. As we evolve and as we look toward the marketin a more global capacity, if there are spots and niches that we need to augment and accentuate, I’mcompletely OK and would support acquisitions.

WL: With sixty offices nationwide, are youlooking to open offices overseas?
RM: No, I haven’t to date and I’ll tellyou, I have a hard time [justifying going global] when the biggest customer in the world, [the FederalGovernment] is literally ten miles away from me. Many of my peers have spent a lot of money and in somecases, with success, but in most cases, without success, in pursuing some of the international markets inthe commercial world. So right now, I’m a big believer in “if it isn’t broken, don’t fix it.”

WL: Aside from serving as a major client,is there a role for government to play in the industry?
RM: I think that the government andcertainly most of the Representatives here in the State of Virginia recognize this is a hotbed fortechnology companies. Governor Gilmore did establish the Information Technology Commission which was thefirst step in trying to create an audience whereby he could hear the issues.

WL: You devote a lot of your time [andmoney] to youth organizations. Is your involvement because of your upbringing and did it start evenbefore you had children of your own?
RM: Yes and yes. Yes this is a byproductof my upbringing, and yes it started before I had my children. You can see the variety of differentgroups that I support. There are so many worthy causes, and I think it’s so imperative that people in thebusiness community and especially with, let me call it, this “new economy” and the new money that’s here,that we find a way to give back. I know those are “cliche-ish” words, but we really need to do that.

WL: When it comes to charities and allthis money...
RM: I’m not sure it’s still where it needsto be. [But] let me say this also: You see a lot of these so-called billionaires and multi-millionaires,but in many cases they’re not necessarily cashing in their stocks right now. So that wealth is big onpaper, but it doesn’t mean it’s liquid.

WL: For those for whom cash flow is not anissue, how do you see people spending their money? Are they buying yachts, private planes, vacationhomes?
RM: People are rewarding themselves. Idon’t think it’s quite as high-flying or as glamorous as it might be at say AOL, where you’ve got SteveCase buying five-hundred acres in Hawaii for his pineapple patch, or Ted Leonsis buying the Capitals. Ithink everybody’s just taking care of themselves right now, taking care of their families and in somecases, their personal interests.

WL: What do you estimate your personalworth to be?
RM: It’s probably more than [I’ll] end uphaving to need in [a] lifetime. But, I could probably test that. I could challenge that one. (He laughs.)

WL: I understand you’re building a home inMcLean. What kind of communications, multimedia facilities, or other high-tech gadgetry will it have?
RM: It’s going to have all the latest andgreatest: flat screens, plasma TVs, HDTVs (high-definition televisions), integrated phone system…It’sgoing to have DSL (Digital Subscriber Lines). I’m really looking forward to hosting some events at thehouse once it’s completed in August.

WL: We hear a lot about the so-called“community of high-tech professionals.” Do you spend a lot of time with your competitors and colleaguesin the industry?
RM: Absolutely. It’s pretty funnyactually. It’s like a big fraternity. There’s certainly a group of us who must be on a list, because nomatter where we go, no matter what the event; professional, personal, social, or what have you, we allseem to be there at the same time.

WL: And who would be some of the peopleyou typically run into?
RM: You always run into Sanju Bansal fromMicrostrategy, Mark Ein from Rollingwood Venture Capital [now Venture House Group, Inc.], Richard Capefrom OTG Software. The list is long.

WL: Are there people or companies you viewas up-and-coming, or some you think will fall by the wayside?
RM: I think that the market and the spacethat we’re in right now is so seductive and attractive, that unless there is a very poor business planthat’s implemented, I think a lot of companies are going to enjoy ongoing success here.

WL: Do you own stock in other ITcompanies?
RM: I invest in the stock market and Itend to vector toward technology stocks, and they have worked out pretty well over the past five years.

WL: Why isn’t your company on the stockexchange?
RM: I talk to a lot of my friends who arepublic and they all encourage me to stay private.

WL: And their reasoning is?
RM: I think the reporting to Wall Streetreporting to New York and the analysts is a chore that’s, in some cases, underestimated...As aprivately-held company, I’m debt-free, I’m profitable, and really outside of the banks and the attorneys;[we] don’t have anyone to answer to. It’s a different style. It’s a different environment that we’re inhere.

WL: Of course you will let us know rightaway if and when those initial public offerings (IPOs) do become available?
RM: Absolutely, and in fact it’d be great,because we are one of the companies that is profitable. It’s funny, I look at my model with my revenueand my margins, and I look at some of my friends, who have significantly less revenue, losing a ton ofmoney, but the market capitalization is several billion dollars for them, and for me it’s probably oneand half times revenue, a big disparity.

WL: Are there certain perceptions that areill-deserved, or any misconceptions surrounding the industry?
RM: Yes, there are. Let me say this: Thereseems to be a bias against some of the older companies...by the new economy companies and leaders. But Ithink what they sometimes fail to see is that if it hadn’t been for the old guard positioned here, andthe repository of technology professionals who understood different platforms, different typologies,different operating systems, they would not have necessarily had the ability to tap into the laborsurplus as they did, and I think it’s important to remind folks within the new economy not to frown uponsome of the old guard and old economy folks.

WL: Who do you view as the “new economy”companies?
RM: If it ends in “dot-com,” I woulddefine that as the new economy.

WL: Do you see a significant change in theway the industry is going to develop, or in the technology that will be in the forefront?
RM: Absolutely, I think what we all needto recognize and be very comfortable with is the fact that we have just begun. We’ve just commenced theinformation technology revolution, [yet] look at the amount of progress we have made in a relatively veryshort period of time. In only the past five years we have made big strides. The Internet and e-commercewill become the dominate elements within the workplace as well as the home. This region in particular isvery strong for that. We have I think developed in this region an international acclaim that started withFairfax County hosting the ‘98 World Congress for Information Technology.

WL: Where do you see the technologicalrevolution heading?
RM: I see Internet everywhere, and thecompany that’s quickest to get the product, both hardware and software, that can support this Internetanywhere and everywhere concept, will be leading in that technology race.

WL: Which are the companies to watch?
RM: There are a lot of companies outthere; like Microstrategy, needless to say. In my humble opinion, I think they are going to be the nextAOL in terms of leading this region. They have products that are viable. They’re using the rightplatform. They’ve advertised, obviously, on Super Bowl Sunday. I think they are going to be a fun companyto watch, and I’m just happy I’m a stockholder. I think Proxicom of course, and Raul Fernandez-who justrecently bought into the Capitals I think-he’s going to continue to be a market leader in theWeb-development world.

WL: I’d like to tap your brain about someother names in the industry and have you do a little free association. So if you would, please tell mewhat comes to mind as I read through a list of so-called “IT tycoons.”

WL: John Sidgmore?
RM: Vice Chairman of UUNET-an incrediblesuccess story, and I wish we could model our company after what they did there. They’ve done very well.They were acquired by MCI WorldCom.

WL: Bryan Thompson?
RM: He used to be at LCC. (I don’t know ifhe’s still at LCC.) He was the keynote speaker at the Entrepreneur of the Year Award in 1995. He gave memy award. That’s how I know him.

WL: William Schrader?
RM: CEO, PSInet.

WL: Do you know Jim Kimsey?
RM: Oh, I see him quite a bit, out andabout.

WL: Jeong Kim?
RM: We were on the cover of Washingtonian together a couple of years ago. Great guy.

WL: Daniel Akerson?
RM: Nextel.

WL: Do any of these companies dovetailwell with your own?
RM: Completely different technologies, allover the board. You have telecommunications. You’ve got [Jeong Kim] with asynchronous transfer mode,which is a box that routes networks. Kimsey of course is AOL. PSInet is Internet access. Very, verydifferent worlds.

WL: William Melton?
RM: Serial entrepreneur. He invests in alot of companies. Seems whatever he touches turns to gold.

WL: Alex Mandl?
RM: Teligent, CEO. I’ve met him a coupleof times. He’s a nice guy.

WL: Russ Ramsey?
RM: I know Russ well. He’s a good guy.Raul Fernandez is somebody who should be on your list. He was on the cover of Fortune with MikeSaylor a couple of months ago. Also, Sanju Bansal who is co-founder of Microstrategy [should be on thelist.]

WL: Johnathan Ledecky?
RM: He’s an entrepreneur who’s managed tobridge the tech world with the sports world. He’s someone I have a lot of respect for.

WL: Rajendra Singh?
RM: Raj Singh, he’s part of [the] IndianCEO High-Tech Council...I’m on the Board of Directors there, and that’s become a very powerful technologygroup that’s been created literally in two and a half years, and it’s rivaling some of the old guards:The Greater Washington Board of Trade, Northern Virginia Technology Council.

WL: Is there any one thing you’ve learnedin your career that we all should know?
RM: The mind is a powerful tool, and Ihave subscribed to the rule that if you think you can you’re right; and if you think you can’t you’reright.

WL: Was there a moment when you knew you’dmade it?
RM: To this moment I still don’t everaccept that we’ve made it, that we’ve succeeded. To me it’s ongoing. The quest never ends...and I thinkit’s probably important to be paranoid. The fact is, as I’ve looked at different CEOs, it seems to be thecommon thread amongst most successful CEOs…that constant state of paranoia. You’re always wondering ifyour success is going to end, and it keeps you charged.