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HOW VERIFONE’S CEO HAS TURNED TWO-SECOND
TRANSACTIONS INTO A BUSINESS WORTH $3 BILLION
 Doug Bergeron was on a roll. Just out of grad school,
he landed a job as an account manager with
SunGard Data Systems, a $200 million company
in 1990. In just nine years, that company’s market
capitalization had grown to $2 billion, and Bergeron, at age 37,
had been promoted to group CEO of their large Brokerage
Systems Group. Then he was recruited to become CEO of
Canada’s largest software company, Geac, a company that also
owned Georgia-based Dun and Bradstreet Software and MSA
(Management Science America). He felt invincible.
Then he hit the hurdles. Geac was entangled in, in Bergeron’s
words, “a nasty turnaround.” Board members were threatening
to sue each other. It was just after Y2K and software sales dried
up. After only 16 months, he was fired, the third in a string of
five CEOs who had met the same fate.
It was during that tough period that Bergeron learned his
greatest business lessons: how to handle the board of a public
company, how to make business decisions fast, how to adapt
his leadership style to fit the season and needs of the company.
Immediately after his departure from Geac, Bergeron brought
those lessons to Gores, a private equity firm where he
served as group president and bought technology companies
in distress in order to turn them around and make them
profitable. VeriFone was one of those. Hewlett Packard (HP)
had acquired the company in 1998 for $1.3 billion and only three
years later was unloading it at the height of the dot-com crash
for the rummage sale price of $50 million. Bergeron invested
his own money in the acquisition and agreed to become CEO
of VeriFone and its largest individual shareholder.
VeriFone had been a solid company before HP took over
management. Its business was secure
electronic payment processing with the
familiar blue boxes at many merchant
counters throughout the United States.
“It’s about more than blue boxes,” says
Bergeron. “The company is about
automating a payment transaction
whether it be with a smart card, a
credit card, or debit cards, determining
who you are, if you have enough money
to cover the payment, encrypting the
information, networking with the big
world of banks to route information, in
two seconds, with zero percent failure,
billions of times across the world.”
But as necessary as that service
is, the company lost steam. It was
overstaffed, had a lack of focus, and
moved too slowly. Bergeron led the
company on a journey back to the basics. He focused on
the 10 best things VeriFone produced, mothballing the other
30. He reinforced quality and profitability, having to rely on
receivables to make payroll.
Continued on next page
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