Computerworld, Canepa talked about those issues, the company's declining revenue and the growing threat of Cisco Systems Inc., which dominates the switching and routing markets for large companies and telecommunications service providers.
What are customers asking about Extreme's financial performance? Customers want a really good high-quality product at a reasonable price. They also want a sales force and a service organization that's there when they need them. The third thing they [want] is a company that will be around for a long time that they can count on to do business with. I think we've been able to convince customers we have all three.
How are customers reacting to the possible Nasdaq delisting, and to an inquiry into Extreme's stock-options practices? We have talked to lots of customers. First, we've got lots of company. Hundreds of technology companies are facing [investigations into stock-options practices], and there will be lots more. [The investigation] is just a thing. It doesn't affect the equipment; it doesn't affect anything, really, in the company. It's not clear there's going to be a restatement of the annual report. There is only a delay in the filing of the Extreme 10-K.
I spend very little time worrying about it. We'll see what the outcome is, if any. That's what we've been telling customers, and that's what we've been telling the sales force.
How important are enterprise customers to Extreme, compared with telecom carriers? Most of our revenue comes from the enterprise space, so it is a hugely important customer. The carriers have leading-edge requirements. The carrier innovations carry over to the enterprise world. Extreme has a fraction of its business from the carrier space, but we carry that over. We're good at bringing it to the enterprise, with the right cost structure.
What is Extreme's technology direction? Our technology direction is pretty simple. You have got to understand the network very well. That means being able to get at the heart of those IP packets and understand the flow that's coming to them. That requires pretty sophisticated hardware and software, which the company is built upon. Then it requires building products able to exploit that and knowing what markets are receptive to those features.
Am I correct in concluding that Extreme won't be making any major strategic changes soon? At a strategic level, I don't think a lot will change. The next year or so for the company is all about operation and focus and making sure people are in the right segment and making sure all the technology in the products is transferred into the knowledge base of the sales force. It's all about partner organizations, solutions and all of that.
Can you assess the competitive landscape, including Cisco? We all operate in the shadow of a Cisco. It means you have to differentiate and be nimble. Cisco may be large, but they have lots of different product lines that may be incompatible with one another. We've built our company around a single system that's open. We have a very sophisticated XMLinterface and a set of APIs that make it very easy for a partner like Avaya to closely build in an application environment. That's key when you're a US$400million company like us. The trick is to apply what you are really good at into markets where you can make a difference, and get there before Cisco.