Origins The company's origins date to 1982 (or 1983, sources differ), when three Israelis, aspiring investment banker
Jacob "Kobi" Alexander of
Shearson Loeb Rhoades, engineer
Boaz Misholi, and Alexander brother-in-law and
Columbia University computer science professor Yechiam Yemini, got together and founded an Israeli start-up company,
Efrat Future Technologies Ltd. In a meeting in New York, Misholi had the idea of building a business around centralized hardware systems to support voice and fax messaging and selling them to telecommunications companies and other large enterprises, who could then resell the voice and fax services to their customers. In 1986 Comverse went public on the
Nasdaq Stock Market with a $20 million valuation; the company used the money so gained as its final round of funding.
Early successes Under his lead, Alexander was credited with turning around Comverse's fortunes. In 1990, Comverse won a potentially $10 million contract, its largest yet, to deliver computers running voicemail and fax applications on West German cellular networks, beating out far larger corporations in the process.
Deutsche Telekom became one of the company's biggest early customers. Many of its early successes came from avoiding the huge telecommunications companies in the U.S. and instead focusing on selling to small- and medium-sized companies in the wireless market in Europe. Gradually its product emphasis shifted more from hardware to software. Many other Israeli companies were built by the same model, including another top software company,
Mercury Interactive. on revenues in the $64 million range and was named a "Company to Watch" by
Fortune magazine. By 1995, Comverse was best known for its AudioDisk product, which was sold to overseas clients and allowed legal authorities and intelligence agencies to record and store data collected from wiretaps. Half the company's revenues at that point were from AudioDisk, and market analysts were recommending Comverse's stock. Comverse's ISMSC found success as a lower-price solution for lower-traffic networks, where it competed with
Logica's Telepath solution. ISMSC found considerable market penetration, exemplified by all six of
Hong Kong's wireless carriers using it. Additional industry standards groups in which Comverse has been active include the
Open Mobile Alliance and
TM Forum. In addition to growing organically, Comverse Technology began acquiring other companies in both Israel and the U.S. Comverse Technology acquired one of its key rivals,
Boston Technology, for $843 million in stock in 1997. The acquisition gave Comverse entree into the large U.S. telecommunications market By 2000, its revenues were $1.2 billion and it had global operations. The company's stock price rose from around $10 in late 1998 to over $120 in early 2001. As CEO, Alexander was sought out for meetings in
Tel Aviv by world leaders such as Chinese President
Jiang Zemin.) The company was also quintessentially Israeli in how it was run, with Comverse CEO Ze'ev Bregman in particular favoring a loose, relaxed system in which he knew all the employees and lines of management reporting were frequently bypassed. When Comverse Technology joined the
S&P 500 index in 1999, it was the first Israeli-associated company ever to do so. It set the same mark when it joined the
NASDAQ-100 index. The
early 2000s recession led to some struggles for Comverse Technology, Over 3,000 jobs were cut during the period as part of several restructuring efforts. The company still made some acquisitions, such as buying the
instant messaging specialist
Odigo for $20 million in 2002, after having previously purchased a 12 percent stake in it in 2001. The image of Comverse Technology as Israel's blue-chip hi-tech stock suffered, and led to a slide in several other large Israeli technology firms. In addition, the European market for mobile voicemail management was already saturated by 2002 partly to separate its more thriving business from Comverse's struggles, and staged a modestly successful
IPO of a minority portion of its stock. By 2002, Comverse Technology had more than 5,000 employees across nearly 40 countries; Fox News reporter
Carl Cameron said there was no reason to believe the Israeli government was implicated, but that "a classified top-secret investigation is underway". Fox News did not pursue the allegations, and in the years since, there have been no legal or commercial actions of any type taken against Comverse by the FBI or any other branch of the US Government related to data access and security issues. While no real evidence has been presented against Comverse or Verint, the allegations have become a favorite topic of
conspiracy theorists. By 2005, the company had $959 million in sales and employed over 5,000 people, of whom about half were located in Israel. He was released on bail and engaged in a long battle to avoid extradition to the US (in Namibia neither money laundering nor options backdating is a crime). In April 2010, Alexander won a victory in the
Supreme Court of Namibia that allowed him to continue to live and work there until the extradition request was ruled upon. David Kreinberg cooperated with prosecutors, repaid $2.4 million to the SEC, and in 2011 was sentenced to the "time served" of the minimal period he had originally been in custody.
Continuing difficulties Recovery from the scandal was difficult. The board of directors was expanded from five to ten, with all new ones being Americans rather than Israelis. Research analysts began speculating that the company might break up. and removed from the
S&P 500 and
NASDAQ-100 at the same time. The stock then traded on the
Pink Sheets. The
2008 financial crisis caused further difficulties for Comverse Technology, with new layoffs occurring in October 2008, March 2009, and August 2009. The company reportedly lost considerable money in 2009, and the moves were typical of other hi-tech companies caught in the bad economic environment. However, the rise in popularity of
smartphones and of sending
e-mail eroded the carrier market for some of Comverse's products and services. CEO Dahan said simply, "These are challenging times." The company had some 4,000 employees, and continued having about half of them employed in Israel Comverse's restructuring also affected its 2006-acquired NetCentrex business unit in France, with layoffs or a shutdown possible. In October 2010, Comverse Technology agreed to sell its two-thirds ownership of its Ulticom subsidiary to a U.S. private equity firm for $90 million; (The company's fiscal year N ran from February of year N to January of N+1.) They revealed that the company lost about $1 billion during that period. Layoffs also resumed, with more possibly in the offing. In March 2011, revenues for fiscal 2009 were announced at $1.58 billion, down from $1.72 billion two years previously, The new CEO was Charles Burdick, who had been non-executive chairman of the company. Burdick became the first American to head the company. In April 2011, the company agreed to a $2.8 million settlement with the U.S. government over violations of the
Foreign Corrupt Practices Act that had taken place between 2003 and 2005. Payments of $536,000 had been made to the
Hellenic Telecommunications Organization in order to obtain purchase orders and had been inaccurately reported as sales commissions in Comverse's accounting. Zacks Investment Research predicted the company would again show a profit for fiscal year 2011. Comverse itself had gained tens of millions in new business, was hiring again in modest numbers, and was at about 4,000 employees, including some on an outsourcing basis. In June 2011, results for fiscal 2010 were announced, finally bringing the company current with its annual audited reporting. Revenues rose to $1.63 billion while the company's net loss was halved to $132.3 million, and the cash position was now stated as being sufficient to meet foreseeable needs. In April 2012, results for fiscal 2011 were announced; revenues remained flat at $1.59 billion while the company's net loss decreased again, to $58.7 million.
Restructuring In August 2012, a series of transactions were announced that would end Comverse Technology as a functioning entity, by making Comverse Network Systems an independent company once again known simply as Comverse, allowing Verint Systems to buy back Comverse Technology's majority stake, and selling off the other subsidiaries. Burdick said, "[The Verint] agreement, along with the planned spin-off of [Comverse Network Systems], will result in a tax efficient distribution to our shareholders and direct ownership in two independent, well-capitalized traded companies." These restructuring transactions were completed on 4 February 2013 and represented the effective liquidation of the Comverse Technology holding entity. Further actions followed the end of Comverse Technology. During June 2015 Comverse divested its BSS business to Amdocs. In September 2015 after a merger this new Comverse entity changed its name to
Xura, then after a further series of acquisitions and mergers in February 2017 it became part of
Mavenir. ==Industry recognition==