New CEO outlines plans for struggling Extreme

23.10.2006
Former Sun Microsystems Inc. executive Mark Canepa was named president and CEO of Extreme Networks Inc. on Aug. 30. Since then, the company has received notice that it may be delisted from the Nasdaq Stock Market for delaying its year-end financial filings, and it has appointed a committee to investigate its stock-option grant practices. In an interview with

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.