WHY WOULD I OWN JDS/UNIPHASE WHEN THEIR COMPONENETS BECOME OBSOLETE EVERYDAY???
ight Reading: Cisco has steered clear of buying component manufacturers. Are
you going to continue that policy?
Carl Russo: Yes, I’m on record as saying that.
Light Reading: But there’s a component shortage in the optical networking
industry [see Components Shortage Delays Deliveries ]. Don’t you need to
acquire component vendors in order to guarantee your supply of a given
component?
Carl Russo: God, no.
Light Reading: But aren’t you running the risk, by not buying component
manufacturers, that you’re going to run out of key components?
Carl Russo: Excuse me for one moment, but why does owning the source do
anything to mitigate that risk?
Light Reading: Because you have first right of refusal.
Carl Russo: That is a horrible misconception on your part, sir. A horrible, horrible
misconception.
Light Reading: Well, Nortel would say that I’m right, and you’re wrong.
Carl Russo: Which is why they’re trying to spin off their component business. I
mean, give me a break. Lucent’s another one. They’re also spinning off their
component business.
If we were living in a world of rough stasis, where technology wasn’t changing very
much, you could say that there’s not very much risk to owning component
manufacturing facilities. But the truth is that optical components are being
obsoleted every half minute. Why would you want to buy a component vendor just
so you could guarantee yourself a source of supply of a component that’s
obsolete three weeks later?
By staying out of that business we have created the most appealing of customers
for all of the components companies. We help them; they help us. The last thing I
want to do is own a component source. And the day we buy one is the day every
other component vendor goes [makes a curious hand gesture]. |
