From Nightly Business Report...
04/27/00: One On One With Dennis Barsema, CEO, Redback Networks
SUSIE GHARIB: Redback Networks (RBAK) is betting broadband will have it rolling in green. Its CEO, Dennis Barsema, came to the Sunnyvale, California company in 1997, a year after it was founded. Redback designs and sells the hardware and software used for high speed Internet access, including broadband. It's poised to reap the riches of what's expected to be the next big technological frontier. Investors have already noticed. Redback went public about a year ago. It posted its first profit in the fourth quarter of last year and earlier this month, it completed its second 2 for 1 split in less than a year.
In tonight's "Prime Time Movers," Donald Van de Mark of Myprimetime.com asks Barsema if the company can keep up this pace of growth.
DENNIS BARSEMA, CEO, REDBACK NETWORKS: I'm a very strong believer in it and I tout within the company and outside the company that we have to continue to do three things and do them well. One is that within the market that we're serving, we have to always be looking to expand our reach within the market we're serving. Two is we have to look for ways to strengthen our importance to our customer because the Redback customer is the service provider, like a Pac Bell, or Bell Atlantic, BellSouth (BLS), GTE (GTE). They've got hundreds of vendors calling on them everyday and whether they return my phone call or not depends on my importance to them. So I think as a company you always have to look to strengthen your importance to your customers. And third, you've got to strengthen the addressable market that you're going after. And so I think that you can continue the growth as long as you continue to be aggressive in terms of expanding your market space either through new products or acquisitions or mergers or whatever the case is.
DONALD VAN DE MARK, MYPRIMETIME.COM: I don't know which magazine, but one of them said that you might be the next Cisco (CSCO). Does that mean you will start doing a lot of rapid acquisitions?
BARSEMA: Clearly, you know, the growth of the sector that you're in will continue to drive sales up and to the right, but mergers and acquisitions is another way to continue to expand your market space. So one of the strategies of Redback is a merger and acquisition strategy. It is a focus of the company. We have a group within Redback that focuses on nothing but that. So yes, it will continue to be a major focus of Redback.
VAN DE MARK: What is your toughest challenge? And let me lay out some options here -- higher interest rates, rapidly changing technology which you can't keep track of, or simply hiring the top flight people when out here there is such huge competition? What do you think is the toughest challenge?
BARSEMA: It's a combination of all that you've mentioned. Clearly, I think that the number one challenge that we all have is getting the right people into the companies that we run. Clearly, Redback has done a very good job. We've expanded the company. When we did our IPO just about 11 months ago the company was at 150 people roughly, and today, with the merger with Sierra Systems, which we just completed, the company is roughly at 600 people. So we've gone from 150 to 600 in less than 12 months.
I think the changing technology roadmap, again, is a critical challenge to Redback and to every company. We've got to stay ahead of the technology curve. Again, I believe that if you're going to be a successful company -- and the strategy that Redback has always had is that we have always steered away from being a "me too" company. We've always tried to identify a market and a problem that our customer was going to have before somebody else did, before the competition did, get to that market before the competition does, at least six to 12 months, and then exploit it. And we've been able to do a very good job up to this point in time of exploiting the early mover advantage that Redback has had in the markets that we play in.
VAN DE MARK: So there's been a premium on seeing what you believe and then creating it?
BARSEMA: Absolutely, absolutely.
VAN DE MARK: That takes a lot of guts.
BARSEMA: If you don't have guts in this market, you're not going to stay ahead. I mean, you've got to be willing to take bold actions. |
