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Technology Stocks : BAY Ntwks (under House) -- Ignore unavailable to you. Want to Upgrade?

To: Kenneth E. Phillipps who wrote (5498)	4/22/1998 11:17:00 PM
From: Mang Cheng	Respond to of 6980

Interview with Mr. House : "The Bay that House built" "CEO David House brings Bay Networks back by dint of will." By Bob Brown Network World, 4/20/98 You've received a ton of good press since taking over as Bay's CEO and leading the company's financial turnaround. Have you been mostly good or lucky? Both. I've been lucky in that I inherited a company that has excellent technology and a broad product line loved by network managers and engineers. And I'm lucky that the people at Bay were ready for change. Where have I been good? I'm proud of the management structure that I put in place, the people that I've hired, the team I've built. [I'm happy] with the process and methodology of goal setting, training and making people accountable [that I've put in place]. What are the keys to Bay surviving and thriving in such a competitive internetwork market? We are a product and technology leader and need to continue to be that. For example, we've got to drive the routing switch, which is a new product category. The standardization on IP has created an opportunity in the advances of silicon technology to the point where we can actually route in silicon. And this gives us about a two order of magnitude improvement in price performance over software-based routers. Routing switches are going to displace routers from a lot of the positions they're in now, or at least the growth and sales of routers. Service is [also] critical. We have world-class service, but I want to have our service be a positive differentiator for us. Bay started off the year by acquiring remote access vendor New Oak Communications, Inc. and net management start-up Netsation Corp. What's your thinking at this time about acquiring companies and technologies vs. building technology internally? Our policy is to develop products where we have the expertise and to acquire [or partner with] companies with products and capabilities in areas where we don't. We went to systems engineers and customers to identify the areas where we didn't have the technology that we would need in the next couple of years. We identified seven areas and formed seven teams around that. We also put together a mergers and acquisitions team, really an overriding eighth team, and developed a process for acquiring companies. [These teams focus on] identifying, screening, comparing, negotiating with, purchasing and integrating other companies of interest. In some of the seven areas identified we decided to do acquisitions, and two of those we announced near the beginning of this year. And in another area, we made an equity investment and signed a technology agreement with Netspeak [Corp.]. [Bay also addressed a couple areas through internal development and OEM deals.] Now we're at the point of starting all over again. I suspect we'll identify a new set of areas where we want to expand our horizons or add new capabilities. How would you describe Bay's culture? Loosey-goosey, button-down? It's a focused, organized, disciplined place. It was a loosey-goosey place a year and a half ago, I think. But it's extremely focused as a result of the management process that I put together. I have here, in my notebook in front of me, a section for my calendar and for phone numbers, and then a section for goals. It starts out with the Bay values, and then it's got three-year strategic goals, and they're organized around innovation, customers, people and shareholder value. Then I've got one-year goals for the corporation, again centered around innovation, customers, people and shareholder value. And behind that I have milestones for the top 15 development programs, marketing programs, etc. So I set the role model: make commitments and be accountable. Then my staff has annual goals that support mine but go into more detail, and they have quarterly goals. In dealing with your customers, what's the top network issue that they're concerned about? The top network issue is surviving the onslaught of the Web. Everybody was busily putting their mission- critical applications on their networks . . . but then the Web came along, and that wasn't planned. The load that Web traffic has put on the backbone is causing a meltdown at a time when the network has become critical to the corporation. What, if anything, would customers most like to see change at your company? They'd like us to do a better job of keeping them informed. We've done that, but we're not done. Where we've had a big lead in technology, Cisco [Systems, Inc.] had a big lead in marketing and communications. We're narrowing that marketing lead, while adding to our technology lead. What are you doing to improve your marketing? The first thing was just to get the sales force organized and directed, [to get] people knowing what it was they're supposed to do and sell. We had a big effort to develop training for various divisions. We've come up with a modular training program where we have training by products and can customize training to each individual. We also have multiple delivery systems - CD-ROM, live classrooms, self-guided study material, etc. nwfusion.com Mang