How have you adjusted to Extreme during your first weeks on the job? It's been great. I've had a chance to poke around. Clearly, the board and I have been talking for six months. It's not like I have come in completely cold. I come from the vantage point of knowing the computer industry for 30 years.
What are customers asking about Extreme's financial performance? Customers by and large want a few things. They 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 you need them. The third thing they ask for 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 de-listing, 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 10K. 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. We tell everybody to just mind their day job.
How important are enterprise customers to Extreme compared to 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 the company's strategy for gaining mid-size companies as customers? Mid-market customers are beginning to suffer from the same issues as bigger customers. Unfortunately, they don't have the resources to deal with these issues. They don't have large IT staffs. A company of 50 to 500 people may still want to go to voice-over-IP because it is more cost effective but requires a sophisticated network infrastructure. And yet, you don't have the people to do it. So, we can come in with an assessment, with professional services, to tell you what you need.
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, yeah, 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.
Was there a feeling that Extreme needed a CEO with engineering and technology prowess to replace co-founder Gordon Stitt, who was known for his marketing expertise? I think Gordon did a fabulous job pointing the company in the right direction, building capability into the technology to do many things. The company simply got to the size where [it] needed a manager that knew how to build the right processes, segment the market, build value chains, focus the organization on execution and this was just the right point to make that skill set. [It was time for] someone who kind of got trained as a general manager as opposed to someone who started a company and had to learn as he went along.
Are you planning any executive changes at the company? That's hard to say after 30 days. There may be some shuffling around at some point. Right now, the team seems pretty good. We'll move some things around the chess board to fine tune the team, but we're just talking about fine tuning.
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. They may be large, but can they capitalize on that? We've built our company around a single system that's open. We have a very sophisticated XML interface 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$400 million company like us, operating against a giant Cisco. The trick is to apply what you are really good at into markets where you can make a difference, and get there before Cisco.