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Technology Stocks : Newbridge Networks -- Ignore unavailable to you. Want to Upgrade?

To: tech101 who wrote (7232)	11/3/1998 10:02:00 AM
From: Glenn McDougall	Read Replies (1) \| Respond to of 18016

The daruma doll of Newbridge nationalpost.com Last week, Terry Matthews announced his Newbridge Networks Corp. had found the holy grail of telecommunication network services, an algorithm that can distinguish between signals, which could revolutionize the industry. It's the latest achievement for Newbridge's hard-driving leader. Jill Vardy Financial Post Terry Matthews has a large daruma doll in his executive boardroom, reminding everyone that Newbridge Networks Corp. is still a work in progress. And if the fierce-looking 17th century Japanese artifact doesn't put the fear of god into his employees, the chairman and chief executive will do it himself. The squat, red daruma doll, its large eyes left blank, is meant to remind workers to focus on a project. "At the initiation of a project all the people involved gather with their project leader and the leader paints in the right eye of the doll," Mr. Matthews explained. "The daruma doll is the symbol that this is an important project and everyone knows it É and until the other eye is painted, the project isn't complete." Mr. Matthews is the real-life daruma for Newbridge, and heaven help the person that forgets it's the top-priority project in his life. "You're beginning to see Newbridge move away from being a second-tier vendor to a top-tier vendor" of sophisticated telecommunications equipment, he said. And that's almost entirely due to the company's expansion of products and services, incubated by Mr. Matthews at Newbridge or in one of the 20-odd affiliated companies he has founded. In its 12-year history, Newbridge has built a reputation as an innovator of quality telecom equipment and Mr. Matthews has created a cult of personality that gives the company one of the lowest rates of staff turnover in the business. He said he works his people hard but keeps them motivated and rewards them generously. He also demands that any senior Newbridge employee wishing to quit come to his office and personally explain his or her decision -- a daunting prospect that may in itself account for the low rate of staff departure. More recently, Newbridge has expanded its product offerings and is now gearing up its sales and service divisions to support that wider product mix. "We've had a massive increase in the breadth of our products. It's one thing to have the products but you have to sell them, service them, provide technical support to a long list of customers. And that will be a challenge," Mr. Matthews confessed. He and his team are fighting a crowd of larger U.S. and European telecommunications companies, all desperately trying to grab a piece of the world market. And the opponents are getting bigger; Canadian rival Nortel Networks Ltd. bought out Bay Networks Ltd. last summer and California-based Cisco Systems Inc. swallows smaller equipment makers like vitamins. But Mr. Matthews has no fears his company will fail. If he has fears about anything, he's not showing it. "Here's the tough part for the competitors. I'm not going away. So they might win one today, but I'll still be after them and I'll chew their ass out at the first opportunity," Mr. Matthews said, a look of fierce glee on his face. He surprised analysts and even Newbridge staff last week when he unveiled the latest in his competitive arsenal; a new algorithm that will allow phone companies to tell what kind of signals are being sent over their networks. News of that breakthrough, considered the holy grail of telecommunications network services, sent Newbridge stock soaring $2.20 to $33.20. During a visit to Newbridge's Kanata headquarters, the 56-year-old chairman, CEO and largest single Newbridge shareholder charged in and out of the boardroom, grabbing a coffee (black), a recent analyst's report (to illustrate a point), a stuffed monkey (clad in a tiny Newbridge t-shirt, for the visiting reporter). He's clearly having fun, despite a drop in Newbridge's stock price over the past year that has wiped millions from his and other shareholders' portfolios. But then, Mr. Matthews isn't running Newbridge for the money. "I long ago became rich. That's not what it's about," he said. This year the Welsh-born entrepreneur was estimated to be Great Britain's 18th richest person, thanks largely to the worth of his 24% stake in Newbridge and his holdings in affiliated companies. For Mr. Matthews, it is about capitalizing on the opportunities created by the digital revolution. "There are 900 million phones out there but probably only 50 million people connected to a data network. So we've got a long way to go yet. The opportunities are galore," he said. Analysts agree. Most rate Newbridge a stock that investors should buy, despite a precarious market for telecommunications equipment and fierce competition among suppliers. Mr. Matthews has been in the same business since 1958, when he began working as an apprentice for British Telecom Research Labs. He said he's not even slightly interested in doing anything else. Mr. Matthews said he works every day, taking time out only for his family, whose privacy he protects ferociously from the media. The last reporter that did a personal profile of Mr. Matthews was banned from all media events and conference calls until the paper's publisher personally patched things up with the Newbridge boss. He has no favourite soccer or baseball teams. He has no hobbies. He owns four golf courses, but doesn't play. He has no interests besides Newbridge. "If you look at all the leaders of our competitors, most of them haven't been around as long as I have. Most of them are not as persistent as I am. Most of them don't know the technology as well as I do. And most of them don't know all the customers that I know," he said. Besides, after 40 years in the industry, most of his friends are in the telecommunications business, Mr. Matthews said. And he likes the fact he's regarded as somewhat of a guru in the industry. "They treat me with some respect and ask me for my opinion. That's actually a very pleasant part of my job. And what's more pleasant is when I'm right and they say 'you were right.' And what's even more pleasant is when they place purchase orders for my equipment."