I had a very nice conversation with our fearless CEO, Noam Lotan, on
Friday 3/7. I will summarize as follow:
- I asked him to comment about the downfall of FORE. Being modest, he didn't
downgrade FORE specifically, but he said that the Japanese companies are
either postponing or canceling ATM orders in favor of Fast Ethernet and
Gigabit Ethernet. He also said that people like to blame on the dollar
strength for sales weaknesses but he believed that the problems are rather
technically related. MRV has no problem selling in Japan and is currently
working on several high profile accounts. He refused to elaborate further.
Noam said that he prefered to keep a low profile because of competition.
Using a military analogy, he said that like being at the war front, he had
to duck low to prevent the enemy from aiming and shooting at his head.
- I asked him to compare the MegaSwitch II with the competition, especially
the newly announced multi-switch from Bay that is priced very competitively.
Noam's answer was those switches from the competition are mostly low end, in
the 10Mbps range with no upgrade path to GE and fiber. MRV sells high end
100Mbps/1000Mbps Ethernet multi-switches, with uplink modules for GE, ATM,
and fiber and the price is still the best in the industry.
- I asked him to comment about the IP switching standard as being worked by
Ipsilon, IBM, Cascade and 3COM. Noam responded that the IP switching scheme
from the competition is far from being close to the Ethernet standard and
will have problem getting accepted as standard. In contrast, the DirectIP
from MRV is much simpler, conforms to the Ethernet standard and does not need
to be standardize. DirectIP will be shipped as soon as this quarter and will
be a serious contender for the router market on the LAN.
[personal note: the router market for 1996 was 4.6 Billion.
I think too much attention is given to Gigabit Ethernet, but DirectIP will
be a BIG source of revenue for MRV from the 2nd quarter on up]
- I asked him to compare Gigabit Ethernet with ATM. Noam said that GE
definitely beats ATM on the LAN front. ATM still dominates on the WAN.
FE and GE work hand in hand together while ATM is non mainstream LAN and is
hard to interface with.
- I asked him about the biggest complaint about this company which is
coverage. Noam responded that coverage from a major investment banker will
be coming soon, but he did not know a specific time frame.
Overall, our CEO was very upbeat about the company and the technological
leadership. At no point during our conversation that he gave any hint that
MRV may have problem facing the competition, both in technology and pricing.
My take is besides having less marketing resources than the competition,
MRV has no problem giving the big guys such as Cisco, 3COM, Bay, IBM ...
a run for the money. As Noam indicated to me that he had to end our conversation
to get prepared for a phone call from Germany - he will be gone for 2 weeks
to Europe starting this Sunday to attend a tech fair - I congratulated him and
wished the best of luck for the company to grow and become at least a Cascade
or Fore. Noam laughed enthusiastically and said that he and his staff are
working 7 days a week to attain that goal in the very near future.
Mike Winn. |
