Post to the News thread per request:
Comments from the breakout session at the Robertson Stephens conference, on February 23, 1998, as remembered by Dennis. Unless otherwise noted, the responses are Mory's. Statements are made to the best of my memoir, and may not be the exact words used at said conference, or by the participants there of.
Q: How is the business tracking?
A: The business is on plan.
Q: How is it going with the GRF switches, and what will it take to gets sales stronger in that line?
A: The problems have been fixed. The issue is getting the sales force re-engaged. We are doing internal training, etc. They need to get confidence that we have fixed the problems and sales should return to increasing levels.
Q: How is CSCO's competition effecting ASND?
A: CSCO sells to the enterprise space. ASND sells to the RBOCs, CLECs, and the like. Our VoIP, 56k, and other products address our customers needs and are being accepted everyday.
Q: What about CSCO's new AS5800?
A: See my prior post on this item. The AS5800 is a large product. It is much bigger than the customers want in their space. It only appears to have 14 slots and a 7500 needs to be connected outside the box to make it work. We believe it does not met the customers needs or demands.
Q: The WSJ in their article about AOL reported the the average user has increased their internet connection time from 7 to 23 hours, you presented that ASND can expect growth from 50 million current users to 200 million by the year 2000. How does the increase in hours of use effect ASND? (can you tell this is a question from me?)
A: That will definitely increase infrastructure demand, and unit sales for ASND.
Q: The RBOC's according to last Thursday's WSJ are requesting the FCC to allow their use of VoIP under a :"little known portion of the Telecommunications act of 1996". How would that effect ASND? (me again)
A: It again would increase our volume, if they were to get that approved.
Q: It was reported that several European purchase orders were being held open, because of problems with your equipment. Can you comment on shipping of these products given your earlier comment that the problems are fixed?
A: I am not aware of any open purchase orders that were not shipped as a result of product problems. DT did experience delays, but those shipments were all handled in the 4th quarter last year. If I had said there were a lo t of open purchase orders, I don't recall that.
Q: What is the progress on the ATM switches?
A: Currently we are in beta testing. As you know Williams, GTE and others have made favorable comments. Our testing shows that ATM is the best quality of service device available. When service goes out, our customers can not make money. So we want to provide the best level of service possible, and ATM is it. We will begin shipping these switches, and they will be commercially available in quantity beginning in April.
Q: Give us a feel by line of business how things are going?
A: As I said earlier we are on plan, but specifically:
Access Concentrators - We compete with CSCO and COMS in this sector. Our ports sales are up, and we are still the leader there. You must understand this is a price sensitive area, marketing to the enterprise space. (Implying that sales dollars maybe down - Q4 this line dropped 6% of total sales, and maybe a continuing trend)
Frame Relay - Here we compete with CSCO and NT, among others. We are holding our own here.
ATM (Core Switching as its called in the overheads) - NN, and others are the competition, and we are doing great here. This area is going to be strong for us for the foreseeable future. (in Q4 this area rose 6% offsetting what was lost in Access Concentrators. Good call to get CSCC!)
Q: How is the testing going with IP Navigator?
A: Testing is going well. The benefit of the IP Navigator software is the improvement in quality of service, and we expect we will see good sales when this software is released.
Q: What provisions are being made by ASND for the ADSL environment?
A: ASND is working with CPQ/INTC/MSFT and will developing products to be implemented when this group moves forward in this area. Further, as you know DSL to CLEC's is Alcatel's market. (I don't know that?)
Q: I don't understand what you mean when you say Voice over IP?
A: We are talking about toll quality voice service over the Internet. Let me explain some uses we see. Using a H323 standard, we see call centers. For example if you look at a brochure on the Internet, you will be able to click and button and talk to a live operator, without leaving the Internet website. Ordinary phone calls could be made while you are on-line doing Internet searches.
Q: Is ASND a participant in building out any VPN?
A: VPN's can deployed by ASND or its customers. ASND is doing a 200 point VPN for Kinko's, while some of customers are doing VPN's for others. Primarily the carriers are deploying them in this case. There are no overall standards in this area.
Q: Has visibility on quarterly performance improved?
A: Michael - Visibility has improved, and our sales are becoming more linear. 12 month planning process are in place and are proceeding.
Q: You mentioned in the presentation that Japan had no downside, please explain?
A: I just came back from Japan last week. DDR (I don't know if I caught that correctly) is planning expansion of its backbone and offering a new Frame Relay system. Michael - we have gone from 22% of sales to 5% of sales within the most recent quarter, so I met that we have little downside. (sounds like Japan maybe heating up to me.)
Q: Comment on SONET vs. ATM?
A: We don't care we can handle both. But from a quality of service you can not beat ATM.
Q: Are you seeing any problems with the introduction of ATM switches?
A: The sales cycle is longer, which we started early. Other than that none.
Q: Bay has introduced a leasing program. Is that a competitive advantage?
A: ASND has a leasing program. SHVA started this in our industry. We don't see this as a competitive advantage for Bay. Michael - we have a leasing company, doing less than 10% of sales currently this way. We may expand it, but customer demand is being satisfied.
Q: Will there be pull through sales by IP Navigator?
A: Maybe ( it was longer than that, but that's the bottomline)
Q: DSO at 72 days, are you comfortable at that level?
A: Michael - we have stated that we are comfortable between 70 to 75 days. We don't need the cash to operate. Some of competitors are giving terms, and we don't feel pressured to do that given our cash position.
Q: What are you customers spending patterns?
A: Williams has announced a $2.5 billion spending plan. WCOM is cutting in some areas and expanding in others. So a specific pattern in the industry is not being seen. We can say we see core infrastructure spending increasing, and that WCOM is totally an ASND shop. We expect to see strong ATM switch sales in this account.
Q: Recently Ciena took a hit due to order pattern switching to "on demand" rather than large open orders. Any effect on ASND?
A: We always have been "on demand" ordering from WCOM. So no effect. Michael repeated.
Q: What is happening with Shara products?
A: We began shipping slowly in 12/97. Sales are slowly increasing in this product line.
Outside of the Breakout session, I picked up the following:
Q: Will ASND be doing any products like Ciena?
A: Mory - No we don't have that type of technology in-house.
Q: Vitesse (produces OC3/OC12/OC48/OC192 chip sets - sat through their presentation since it was an hour before ASND's), is showing strong growth beginning in Q3 and running through 2000. Does that confirms ASND's expectations of ATM sales prospects?
A: Yes, it is encouraging. He went on to mention who they do buy their chips from, which I missed.
Observation: The ASND team left the Breakout to do another private presentation for a fund, and had other such appointments during Monday's conference. That does not confirm buyers. It does show interest.
Respectfully submitted, Dennis |
