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Technology Stocks : Ascend Communications (ASND) -- Ignore unavailable to you. Want to Upgrade?

To: Dennis R. Duke who wrote (46062)	5/5/1998 1:16:00 PM
From: Narotham Reddy	Read Replies (1) \| Respond to of 61433

Ascend rides to profits on first wave of Internet craze San Fransisco Business Times, Monday, May 04, 1998 at 20:00 Theirs is the typical Silicon Valley story - four engineers who decided to break away from an established company to work for themselves. Only the founders of Ascend Communications- Jeanette Symons, Rob Ryan, Jay Duncanson and Steve Specken - were in San Francisco working at Hayes Smart Modems when they decided to take the entrepreneurial plunge in 1988. The four were in executive positions at Hayes, but young enough - in their 20s and 30s - to feel confident about creating a marketable product for high-speed data transmission. After huddling in Symon's Beale Street apartment creating a business plan for venture capitalists, Ascend was born with about $2.6 million in seed money. The founders hired a handful of engineers and their current chief executive officer Mory Ejabat, and set up shop in Levi's Plaza in San Francisco. Their first product, designed to take advantage of high-speed ISDN technology, was a refrigerator-sized ISDN concentrator, a mechanism that allowed users to take many ISDN lines and combine them for twice the speed. "One minor hiccup," Symons, current chief technical officer, said. "No one wanted it." Ascend sold only three products on its first run. Then it was back to the drawing board, and time to learn a lesson that has been a guiding mantra through the years - listen to your customers. Customers told them that they liked the concentrator technology, but not the size and other features. Video-conferencing, not the Internet, was what people wanted back then, and video-conferencing needed the high-speed digital bandwidth that Ascend could provide. "We scrambled and built the box people wanted," Symons said. Today the product accounts for about $30 million in sales. Luck played a large part in Ascend's growth, company officials said. "If the founders had come up with this product earlier, it would have languished," said Bernie Schneider, Ascend's vice president of business development. As it turned out, the Internet was still in its infancy, and Ascend was able to break through and partner with pioneer Internet service providers, UUNET and PSI, early enough to make an impact. Ascend has grown exponentially since its inception in 1988. The company went public in 1994 and sales have skyrocketed by 257 percent over the last three years, from $287.4 million in 1995 to $1.2 billion in 1997. Three of the four founders left the company shortly after launching the IPO. Symons is the only one left. Part of Ascend's growth can be attributed to the company's spree of acquisitions - eight since it was founded. But while seven were smaller companies who added to a more rounded product, the acquisition of Cascade Communications in June 1997 doubled the size of the company and put Ascend on the map as a major player in the asynchronous transfer mode or ATM market. Ascend now employs about 2,000 workers internationally, of which about 800 are in the Bay Area. Paul Johnson, senior analyst with Bank of America Robertson Stephens in New York, is bullish on the company. "The Cascade acquisition was a very smart move," he said. "It complemented their existing operations very well."