New CEO outlines plans for struggling Extreme

Sun's Mark Canepa talks about financial reporting issues, declining revenues and competition from Cisco

Former Sun Microsystems executive Mark Canepa was named CEO and president of Extreme Networks on Aug. 30. Since then, the company has delayed filing its annual financial report and received notice that it may be delisted from the Nasdaq exchange for delaying its year-end financial filings. In an interview with Computerworld, Canepa talked about those issues, the company's declining revenues and the growing threat of Cisco Systems, which dominates the switching and routing markets for large companies and carriers.

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.

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