Report from Larry J. at the Montgomery Conference
Looks like the main presentation was the same as MS, although it was handled by Ashby and Schneider (Ejabat not present). The slides may be the same slides as MS well.
Short break-out session (just 20 minutes, unlike 1 hour in Scottsdale):
Q: How is business, what is the trend.
A: Pretty good, we are optimistic in general, despite Japan. We still had a good Q4. Outlook is "quite good...cautious 1H/Q1....cautious Japan, no recover til 2H."
Q: Are carriers any weaker this year than same time last year?
A: Carriers are more commited to data than 1 year ago. Strength in backbone buildout. See more subscribers. FR continues to grow. More upbeat broadband RBOCs/CLECs.
Q: WCOM?
A: They are very aggressive. Expect Frame network supported by ATM infrastructure (generically stated). Lots of new players. Qwest, Williams. Bandwidth bottlenecks are being broken, which is creating opportunity."
Q: Interfaces?
A: Shipping OC-3 and OC-12. See OC-48 in 2H. More OC-3 than 12 now. GX550 starts with OC-12 and goes up.
Q: Is OC-48 advancing to 1H at all?
A: Not with ATM interface.
Q: Early customer feedback on GX550?
A: Very positive, several in beta, they will be in beta till end of Q1. Revenue begins in Q2. Trials going extremely well. Nothing but good results.
Q: How many customers in beta?
A: "There are a number of customers in beta."
Q: Europe and deregulation?
A: The opportunity is "immense." Deregulation has increased. See strength in Germany, France and So. Europe. Weaker in UK and Northern Europe due to fact that CSCC did not have a large international structure.
Q: Linearity of business in a quarter?
A: Q4 better than previous 2 or 3 quarters. Still, the last month of a quarter is still important. Improved vision for next few quarters helps improve linearity.
Q: Industry growth rate slowing to 20%?
A: Some segments much lower growth rate, some much faster than industry. Backbone is much faster than industry. RAS sees growth still above industry std. Sees TELCOs migrating to public data networks.
Q: What were inventory turns in Q4?
A: 4.1, up from 3. Target is 5.5 to 6. Expect to see that within about 2 quarters.
Q: How is component availability and lead time?
A: Availability is not an issue and don't expect it to be. Seeing improvements in DRAM pricing, which is one reason for improvement in gross margins. Have a better ability to forecast component needs.
Q: Split in CSCC between chassis and cards?
A: Cards is where the money is at (everyone laughs at this). Vast majority of revenue is complete boxes.
Q: Impact of other competitors? Better RAS products, e.g. CSCO?
A: Max TNT has T3 access, giving ASND a clear advantage. Track the competition closely. Competitive landscape has not appreciably changed. Also, we are not standing still either.
Q: ISP consolidation and new ownership?
A: This is working to our advantage. MCI was going to deploy non-ASND RAS. It is now on hold (the implication is that it they may evaluate ASND as a result of the WCOM relationship).
Q: Is momentum to switching or carrier products?
A: Depends on definition. Three groups, access, core and enterprise. Core is fastest growth, access is still significant growth.
Q: Quality issues?
A: Engineering group completely reorganized. One quality engineer for 2 s/w engineers. New leadership, new processes, better in-circuit test (ICT). A lot more careful on testing than they used to be. Added more testing labs. New TNT s/w end of February. Much more stringent testing. By far best s/w release yet.
Q: Expectations for xDSL deployment?
A: Two activities: Sees in 1998, TELCOs continue trials. Sees large volume with CLECs (data services in large bldgs.) It will be 1999 before Telcos make a major move and large scale deployment.
Q: Any permanent customer damage due to quality?
A: To the best of my knowledge, ASND has not lost a single customer. No long term customer damages. Thank you very much.
THAT IS IT.....THANK YOU LARRY J!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! |
