Early this year FORE Systems, Inc. quietly promoted financial whiz Thomas J. Gill to president and CEO, replacing the more technical company founder Eric Cooper, who remains as chairman. Network World Senior Editor Robin Schreier Hohman spoke with Gill about his style and his plans to expand FORE beyond the world of ATM.
Q. Let's start with the basics. Fore's announcement, in January, promoting you to CEO and president, seemed to be a very quiet announcement. Not much was made of it in the press. Was that deliberate?
A. Yes, I would say it was deliberate on my part. I've been with Fore for over five years, in several different capacities. During 1997, as chief operating officer, I continued to take on an expanding role for the company. But, as the Board had asked me and Eric Cooper had asked me to take on the CEO and president role in January, I didn't want it to be an announcement about me. I really want Fore Systems to be known for its capability and leadership position and not for Tom Gill...There are a lot of greater leaders in the company that are driving a lot of the initiatives, and I thought it was more appropriate to have more of a quieter transition, and a handoff from Eric to me.
Q. Now, you said Eric asked you to take over. Why is that?
A. It was part of a plan that really didn't become something we were discussing actively until the second half of calendar '97, as I took on the chief operating role, in January of '97, over a year ago, we continued to focus on the direction of the company together, and where we were taking the product lines, some of the markets we were focussed on. And as I said, my role expanded, I just seemed to take on more of the operations of the company. And throughout the second half of '97, Eric had felt given the amount of time I was spending on internal operations, and my outward focus with customers, and his desire, to have a bit of a less - a bit of a more hands-off role, less hands-role, I guess, is the best way to put it, less operational. I think Eric and the board thought it made more sense to formally ask me to take on the CEO role. Eric, today, is still very much involved in the company, he's a very active chairman, he comes in every day, which is a terrific help to me, in terms of directing the company on our technical architecture, strategy, and so on, going forward.
Q. So, is this the type of thing that you see in a maturing organization, where the technical side has to give over, at some point, to the financial side?
A. This was an initiative that we started in the middle of calendar 97, where we stated that we were going to transform the company from a technology-oriented company to a market-driven, customer-focused company.
Q. Fore has been known more as a technical company, and you're from the financial side. How do you make sure you keep up with the technical developments and know how to drive the organization on that end of it? Who's the person you trust on that end of it?
A. Well, there's a few people in the company. First, Robert Sansom, who is one of the co-founders of the company and headed up software engineering for a number of years, is now chief technology officer for Fore Systems, reporting to me. He's one of the people that I would rely on for technical strategy and advice and in terms of the direction of the product line. And Eric is very much involved himself. Again, he's a very active chairman, he comes to work every day, he's very supportive of my role.
Q. But your job is to drive the business, the market end of it.
A. Well, as far as my role as the CEO, is to drive the overall business in terms of our strategy, including both our product strategy but also our channel strategy for sales and marketing, and continue support the infrastructure for our group.
Q. Now, Fore's an ATM equipment supplier, but it seems you've been looking to broaden, is that true? Are you branching out a little bit more?
A. Yes, we are. We've continued to have a fairly significant amount of our revenues outside of ATM, anywhere from 25-35%, historically, has been driven from contributions from LAN switching technologies such as Ethernet and Token Ring. But the dominant revenue generator in the company has been our ATM product line. Our strategy is to continue to stay focused on ATM in the enterprise, but also to expand our solution on the Edge, and we've got a terrific Edge strategy today and what we want to do is continue to focus on how to expand that product line and take it into our installed base, and also take the existing switch we have into the markets as well.
Q. Now, what I've seen over the past six months, from the users I've spoken to, is an evolution from ATM or Ethernet to, well, maybe I'm going to need both and maybe I'm going to need ATM in the backbone and Ethernet to the desktop. Are you seeing that same evolution?
A. Well, it's similar to what you're describing. Our focus and the way we present our architecture to our customers is, in the core of the backbone, we are very adamant about ATM as the right backbone infrastructure to support applications and all the scalability capacity requirements over the long term. Long term is three to five years in a planning cycle for a network manager or an IT manager. On the edge of the network, we have a bit of a different philosophy where we will work with customers and understand what applications they're running, what some of the drivers are and the needs are in this business over the next several years. And quite often customers of ours will buy 10Base-T Ethernet for applications that require it and in the same customer network they may have OC-3 at the desktop, ATM, and it all depends on their departmental requirements. So we don't come into a corporation and say, it's got to be all ATM on the desktop or it's got to be all Ethernet on the desktop, it's really based on what their business requires. And we're the only company that can actually offer very attractive desktop ATM, and at the same time offer very competitive switched Ethernet, at the desktop or in the wiring closet, aggregating shared hubs for some investment protection from the customer standpoint, and on the back end of an ATM backbone infrastructure. So we are very focused on an ATM backbone infrastructure for the enterprise and a mixture of technologies out on the edge. And the edge is where we're going to broaden our product line, both in the enterprise LAN and the enterprise wide area networks as well, so we have a terrific opportunity to continue to leverage. Both have done well in both of these respective markets and expand the product line there.
Q. So what kind of new products can we expect to see?
A. Well, we've got a big focus on two areas in the LAN. One is a stackable switches, 10/100 stackable switches that are priced competitively with the today's market. Today we have a modular product that is very, very solid and sells very well but is under a bit of price pressure on the edge, and we continually adjust the pricing to bring it down near street price, where required, and we do that.
Q. What product is that?
A. The product I'm referring to is our 3810 product. It's a very attractive product and it's priced appropriately for a modular product. But when it competes against stackable 10/100 products, it's a bit higher priced, naturally. So our goal is to bring product to market as quick as possible that are 10/100 stackable products that are very price competitive. And, the value that we bring on the edge is we sell the best integrated switched Ethernet to ATM interfaces in the market today. The best integrated edge to ATM backbone infrastructure solution that you can buy today That's our value-add. Especially as the Ethernet edge becomes much more commoditized, we want to make sure we bring value to our customers in the ATM integration.
Q. Now, on the 10/100 stackables, do you plan to build those yourselves to drop the price of your existing products, or to OEM others?
A. Currently we're just adjusting our price on our existing products to meet the requirements in the marketplace today. Over the long term, we've got development efforts under way to bring products to market. We have other vehicles to get to market quicker as well, which could include partnerships or potential acquisitions, or so on. We always consider time to market and a make versus buy analysis together.
Q. Now I see that since you've taken over, the stock has started to rise, with some of your key announcements. It had been stuck for a while. What do you attribute this to?
A. Well, we had a slow-down a year ago, and our whole industry had a slow-down a year ago, and the reasons our business slowed down is we're a little bit different than some of the other customers in the industry. Our Asian markets had slowed down a bit a year ago for reasons related to the Asian financial crisis. And we also had a bit of a slow-down a year ago due to stalled sales cycles, stalled decisions on what to do in the backbone. I think that a lot of progress has been made since then, and it's showing up in our financial results, and if you follow through this past fiscal year that's just closed, we've continued to show very strong sequential, quarter over quarter growth in revenues and net income. And we're also, a smaller number of companies in our industries that continue to good year-over-year revenue growth are now starting to show year-over-year net income growth as well. So we've been, over the past year, we've been quietly addressing the internal operations of the company, transitioning to a company that's much more market-driven, and we've made a number of investments over the past year, calendar 1997, or fiscal '98, our year ends in March. And we've asked out investors to be patient with us, that we've made a number of those investments, and we believe that given the steady progress that we've made, and the outlook for the company, and how we're positioned right now given the product line that we have - we don't have a lot of baggage in terms of product transitions that we have to deal with right now. So we're positioned pretty well, going forward, and it's starting to show up in our financial results, which has been a very good thing for the company. And given some of the announcements we've had on new products coming out, our next generation ATM switch, some of the partnerships that we've announced there are very good things, and I think it really leaves a good opportunity for us to stand apart a bit from a large part of the industry, in terms of our ability to execute, our ability to address customers' needs a bit differently than others in our industry today. And that's our goal, is to not be the same as all the other guys. We want to be able to provide value-add to our customers. It's a little different than what's traditionally offered in some of the other networking suppliers. That's starting to creep into our stock.
Q. So, when you say investments, what kind of investments have you been making?
A. Investments in product development in terms of our next generation products, there's been a significant investment. And it's always been our edge. We talk about transitioning from a technology company to a market-driven company. We are going to continue to invest in our R&D organization, and that is our edge for our company. Our products are our edge, but we need to promote them better. We need to market them better both through our direct sales force and our channels, in terms of giving them the right collateral, and I'm sure we understand how to position our products with our customers. But that's one aspect, in terms of the marketing and sales organization and the investment in that organization, but also investments in new products. And we made pretty significant investments in our infrastructure last year. We doubled our manufacturing capacity, we opened a manufacturing plant in Dublin, Ireland, last year, June we went operational. And it also helps lower our tax base. We just opened up a brand-new campus facility here in Pittsburgh, 300,000 square foot manufacturing headquarters and R&D facility here, which really helps with productivity and morale, and it's really very nice for customers. I spend a significant amount of my time with customers, looking at what their needs are, presenting the company's strategy, and just getting to know them better, and bringing our customers into Pittsburgh has been a very, very good way to set up the impression to our customers that we're a company that's built to last, we're going to be around for a while. We've got the strategy and the plan to do so, we've got the infrastructure to do that. And we've also invested in our communications infrastructure. We've implementing a new accounting system, and have put a big investment in our capacity plan, sales planning, and manufacturing planning systems as well.
Q. Now, do you find it's harder to explain ATM to people than it would be with the Ethernet?
A. Well, you know, it's interesting. A year ago, there were, Gigabit Ethernet was less the promise of and the answer all to the backbone, and created a bit of a challenge for us to differentiate why we positioned ATM in the backbone. For customers who knew what they wanted, it wasn't as difficult. Customers who weren't sure or weren't sure of many of the issues related to Gigabit Ethernet created a slowdown in sales cycle as I mentioned earlier. Today, from our standpoint and to the extent that I've had with our customers that are prospects or the current customers, there seems to be a lot more awareness about both ATM and Gigabit Ethernet, in terms of the roles in the network, and I think it's pretty clear today that Gigabit Ethernet will have a role in the network, there will be more short distance connections between a server and a switch, there are some wiring infrastructure limitations, and distance limitations - those are just some of the standard issues today. I think a lot of customers understand those issues and accept them for what they are. ATM, on the other hand, in terms of the values that it brings to a corporate backbone in particular, when customers are talking about a lot of applications that are required to run a network, ATM becomes much better infrastructure to support many of the applications today, and some of the applications that are planned around these networks over time, including voice applications and some of Web-based applications that are coming out today, Web-enabled applications. And again, if customers have a true three to five year outlook on what they want to do with their information technology and with the network infrastructure, ATM is ideal to address all those needs, and it scales to do that. Now, at the same time, Gigabit Ethernet will have a role, and, like we interface Fast Ethernet into ATM infrastructures today, we will support Gigabit Ethernet, as it relates to server connections, into an ATM backbone infrastructure. We will have network modules on our switches that support Gigabit Ethernet as well. So we're part of the Gigabit Ethernet Alliance, we're supporting the standards. And as the products mature and the roles become more defined, we will support what architecture that's part of an overall backbone into an ATM backbone infrastructure itself.
Q. So, can you give me a feel for what sorts of networks your newer customers are putting in, customers that haven't had ATM?
A. There's a lot of really interesting vertical markets that are starting to fill out around their own needs within their industry, and our solutions happen to address some of those needs and give those customers a competitive advantage. And I think traditionally we've done very well in education, we've done very well in health-care, we've done very well in entertainment, and a lot of these were, for various reasons, specific to their industry. But today we're actually broadening the vertical markets that we sell into fairly aggressively. We're selling now to the airline industry, the petrochemical industry, we've got a broad list of customers there, public utilities, state and local governments, the Federal government has always been a big market for us, and many, many Fortune 100 accounts are becoming a big part of our customer base. And we're not just closing what I call back door accounts, which is a departmental workgroup or the backbone out on the edge of an enhanced network, or something like that. We're starting to close, and win, the entire corporate network, which is more of an end-to-end type offering from us, and that includes the corporate backbone, which would be the LAN backbone, the edge, out to the desktop and the wiring closet, as well as the wide area network, as part of the overall architecture. And as the LAN and the WAN start to converge, ATM is a terrific platform to support that convergence. And we spin that to our customers as part of the architecture. And it's a very attractive solution. And what we want to do - I guess we are the only company to offer desktop ATM, LAN backbone ATM, both our standard backbone infrastructure and wide area products that are all based on the same software, the same hardware platform, the same ASICs and it scales all the way through it, matter of fact it scales all the way into the service provider infrastructure for the service offerings, could be the same platform. But nonetheless, in the enterprise, we're winning a larger segment of the customer networks. And these are all walks of life, many different industries, many different vertical markets, and a much greater number of higher profile accounts, marketing type of accounts, that we're starting to close. Like Prudential Insurance, that we announced recently, like Microsoft, like Shell Oil.
Q. What are you doing with Microsoft?
A. Microsoft, we are supplying their entire headquarters campus with ATM backbone switches, and we've been a part of their network for almost a year, we're approaching a year here this summer.
Q. Their entire campus?
A. Their entire campus, yes. It's a fairly large and expensive network. Microsoft is a strategic account, a very important customer of ours. And we're really delighted to have the opportunity to continue to work with Microsoft and expand our offerings in the network as well.
Q. One thing, I think, you're trying to say, and tell me if I'm correct, is that you've differentiated yourself by accepting the variety out there, and the need for Ethernet and ATM to co-exist, and you're going to provide a solution...
A. That's correct. And how we architect that solution is a little different than some of the other companies in our industry
Q. And how is that?
A. And I think that's where our difference is, and that's where value-add is....
A. And we're talking about what's on the edge of the corporate network. And the backbone infrastructure, we position ATM as the core background, and with other switch technologies feeding into the ATM backbone, can be Fast Ethernet or Gigabit Ethernet. We also interface very well with router backbones, and routers interface very well into our ATM technology.
Q. Now, have you achieved that interface so seamlessly?
A. Well, it's evolved over time. I mean, if you think of how Fore has grown as a company, every network that we sell this to, there's an incumbent in the network. And in our early days we interfaced very well with the Cisco routers and Bay routers and large networks. And these were, again, part of the back-door accounts where we did a small portion of the accounts. As customer needs are evolving today, and as our product line is evolving today, we continue to work really well with other industry pl ayers, technologies, and their product lines, and interfacing with the installed base that's out there today. And we offer a terrific migration strategy for our customers to evolve from their installed base equipment that they have to higher capacity switching solutions, whether on the edge or the backbone infrastructure. And our architecture still incorporates routing, but not routers, and essentially the routers that are in the network start to move out to the edge of the network, and our architecture still takes more of a distributed routing design for our customer's network switches, which is a bit more cost-effective and efficient and easier to manage, to take some of the complexity out. And that's a lot of the frustration we're hearing from customers today, the networks and the installed base of equipment that they have within their corporate network is too complex to manage right now, and they need to slice off complexity and cost to make things a little a bit more easier. And they could devote some of that cost they're saving and invest it in other applications and run over the networks. So they can keep their budget whole and then actually redirect the funding to a more productive use.
Q. Can you migrate to ATM from Ethernet, or can you just upgrade?
A. Typically, if the customer has a large installation of shared hubs, typically the shared hubs can aggregate onto a high density closet-type switch, Layer 3 switch that we offer today. Our PowerHub product line can do that very well. We'll offer next-generation switches that can facilitate this very well. It's essentially bringing shared hub traffic onto an ATM backbone infrastructure. And financially customers are amortizing the costs for the shared hubs. As the shared hubs begin to fall off the amortization schedule they can begin to upgrade them to switches out on the edge and have desktop switching, either 10-BaseT or 100-BaseT, or 10/100, whatever they need or ATM, for that matter. So, they can actually, with their Layer 3 edge devices can migrate shared hubs an ATM backbone infrastructure and evolve the network over to switching, whether it be ATM or Ethernet, out on the edge.
Q. So, when you talk to customers, what do they ask you to build, what are they looking for from you?
A. Well, typically, a lot of the customers that we're working with today, they have FDDI backbones, they have a big router infrastructure. It's, again, complex to manage, it's costly, and it's at capacity, it's essentially hitting the wall. Some of the FDDI backbones are at 99 percent capacity, and they can't take the corporation forward They can't implement new applications that drive a competitive advantage with another organization. So we have the ideal opportunity to come in and, at a very attractive price point, upgrade their backbone, and bring them a very attractive edge solution that integrates well into the ATM or cell-based backbone infrastructure, and provide them a road map, over the next three to five years, on how their applications can actually be much better enabled over the network solution that we offer, and solutions of scale with what they're trying to do within their own organization. So we actually provide competitive advantage, a cost savings, and as a productivity enhancer. There are a number of things that we bring to the table in terms of how we architect our solution. And again, it's based on an ATM-centric focus but it's an integrated solution with other technologies. But the key difference is how you architect the solution and design the network for the customer, I think, which makes a big difference. A lot of people say they have ATM products, they have an ATM focus. Yes, we have that, too. We can offer whatever you want, a little bit like the supermarket approach. We come in with a much more focused approach, we come in with a much more focused architecture. That actually addresses the customer's needs, in terms of their applications and what they're trying to get done in their business, competitively.
Q. With your ASX-4000, there's a definite migration path built in there. You start high but you can go much higher. Are ISPs one of the markets you're hoping to attract with that?
A. There are two initial markets for that particular switch. One is high end large enterprises who - you'd be surprised at the number of our current enterprise customers who are very interested in that switch, particularly in the U.S. Federal Government and many Fortune 100 corporations - and Microsoft, for that matter, is very interested in this particular switch. So there's a big need for high end enterprising. And what's interesting is that with ASX4000, does not require to take out any equipment out of the network. You can essentially drop it into the center of the network, get a significant boost in capacity and performance, while at the same time interfacing our ASX1000s and 200BXs into the ASX-4000. So it makes for a very nice long-term investment protection strategy. And in regard to the service provider market, well, the interest right now is the internet service providers in particular, but also the service providers that essentially are transporting IP and have a business around data. We do have good voice capabilities but the traditional carriers are not necessarily a big market for us, because of some of the feature and requirements that a carrier-class switch has. The switch will sell very well into the carrier market, it has a number of redundancy features, and so on, built into it. But the carriers that we sell to today, the non-regulated carriers, make good use of in terms of their infrastructure and service offerings, and this includes the CLECs markets, the ISPs, cable TV, competitive access providers, and so on. We refer to these as the alternative carriers, or emerging carriers. And over the next six to nine months, we plan to evolve the ASX-4000 into a carrier-class switch and will have many of the features required that a traditional carrier needs for billing and some other network management features, and so on, that are important to many of the traditional carriers. We're doing business with many of these customers today, and our products are very, very solid, very stable, they perform very well in carrier networks today. The ASX-4000 is a very popular product in many of the alternative carriers that we sell to today. And the 4000 is extremely attractive to them. And the roadmap for some of the features that are required for this market is on the horizon and will be an attractive sales proposition when they become available, in probably the first half of calendar 1999.
Q. Can you just tell me what you mean by the alternative carriers?
A. Well, these are competitive access providers, local exchange carriers, cable TV companies, and ISPs, primarily. This represents the big segment of the core systems service provider market itself. And these are businesses that have emerged over the past three to five years, and are growing much faster than some of the traditional carriers. And they're essentially building solutions for their customers that require ATM backbone infrastructure and an ATM service offering. And we work very well with them. And I think a lot of what we're calling alternative carriers like our enterprise capabilities, they like the fact that we have a large outside customer base and we can bring enterprise customers to them, they can bring their customers to us, and it's more of a turnkey solution for the customer. And we're recognized as an enterprise company, and our installed base primarily is comprised of enterprise customers; but on the other hand we have a very large number of service provider customers that are growing, and it's probably the fastest growing market within our overall segment of revenue categories within the company itself. And as we continue to grow in our solutions on the edge of carrier networks and we expand and upgrade the capacity of the switches that we sell, we'll have a much more compelling offering to many of the traditional carriers as well, or the regulated carriers, to start with.
Q. Right. So you mean, like Sprint?
A. We're doing business with Sprint today, an ATM service offering in conjunction with Nortel. And Sprint sells our equipment to enterprise customers as well, so it's a nice combination. And Sprint is very interested in other aspects of the product line and the direction that we're going. Sprint is a very good customer, and we also do business with MCI, but we saw MCI as an Internet backbone organization. UUNet is one of our key strategic accounts in the service provider market as well, like Sprint and like MCI, and continues to buy our technology to expand and upgrade their backbone infrastructure and their their service offering as well.
Q. So do you think two of the original barriers, or the recent barriers to ATM, high price and fear of incompatibility with Ethernet, are dropping away?
A. I think so. The price issue is - let's start out on the desktop first. We've rolled out very attractive desktop pricing for OC-3. Our OC-3 pricing per port is about $400, and the adapter card is just about $500. That is very attractive when compared to Fast Ethernet that's out in the market today, price performance comparison is extremely good. And we will continue to bring that pricing down. We've brought pricing down on the desktop about 40 percent, year over year, for the past five years. And as our volume continues to grow, we gain more efficiencies, and to design in cost productions into our product line, we expect to try to continue to drop the price to be competitive with other technologies. There's a certain class of customers that are out on the edge, there are some that just can't use anything else other than ATM on the edge of the network, and we take price off the table as part of the issue, essentially, with the pricing that we've offered today.
Q. Well, also you continue to refer to your cycle as three to five years, which is more than twice what Ethernet seems to be at this point. So, then, if you take that into account, your pricing drops dramatically.
A. Absolutely. The architecture in how we design our network has this longer life built into the design of the networks that we sell. I think that's an advantage that we have. And it scales, and that's one of the key issues with ATM, if we offer 25M bit/sec, OC-3, OC-12, OC-48, and our switches are architected for OC-192. So we'll continue to scale in the backbone and onto the desktop. In the backbone itself, we are - for enterprise customers, we are very price competitive with alternative technologies that are offered in the backbone today, especially when it comes to the complexity of managing some of the other alternative technologies in the backbone. When you take into account the overhead costs and the infrastructure to support some of the legacy technologies that are in backbones today, it's fairly expensive to support all the changes. This is all the intelligence that we build into our switches as part of intelligent infrastructure, which actually helps customers take the costs down of managing the networks and takes the complexity out of the networks, makes it simpler to manage, easier to use, we're plug and play, self-healing, self-tuning. And, compared to the hardware costs within the network and software, it's cheaper. So the hard dollars are cheaper and the dollars associated with managing the overhead infrastructure, or the network managers department, are less than, as I said, focused on more important things for their business. The other aspect of this when compared to other vendors who are offering ATM technology, we are very competitive, and I think that everybody is kind of in the backbone kept their prices in the same range. There's no wild deviations, let's say, between Cisco or Bay or us in the the backbone of the network. In the edge, we're the only guys who are offering desktop ATM desktop solutions, and at the price point that we're offering them, and with the broadest range of adapters and network interfaces. That gives us a very competitive advantage as well. So price for ATM is really becoming less of an issue for customers. For service provider networks, there's almost an order of magnitude difference between some of our competitors, ATM backbone switch pricing as the pricing that we offer for our products as well. And that is where we become more attractive. We offer much of the redundancy features and requirements the carriers need today, and at a much more attractive price point. And as we evolve our product line and our platform to have all of the redundancy requirements that a traditional carrier would need I should say, will be at an even more attractive price point than we're offering in the marketplace today. So there are bigger disparities in the carrier market, and I think that's why we are quite popular, amongst the alternative carriers.
Q. So you think by being an ATM shop that offers other solutions, that's a strength, rather than, say, Cabletron or Cisco, which also offers ATM, but that's not their focus.
A. That's right. And when I refer to our architecture and our focus, we don't come into a customer and an enterprise and offer whatever they like. In other words, if a customer says, whatever you think our needs is, just put it in and make my network better, we come in with a much more focused approach. Because a lot of times customers are looking for advice. What do you think I should do? What do you recommend to me? We come in with a very focused approach that is not necessarily geared towards a continued upgrade path, and I think customers see that as attractive. OK, this solution is going to scale, it's got investment protection built into it, and it addresses the needs of my corporation in terms of applications that I want to run over the network. And I think some of the other suppliers in the industry take an approach to offer a broader range of technologies and whatever you like we'll supply you, and actually focus the customers towards an Ethernet solution that, I guess, continues to be upgraded, and then with the promise of we'll offer an ATM infrastructure later, if you need that, because you really don't need it today. Where we're a bit different is, I think, we convince customers pretty quick, or a lot of them already know that they need a better, more suitable backbone infrastructure that supports what they want to to do today. They really can't wait. They see it as a way to spend more money for continual replacement upgrade path that's pretty costly to them. So, this is our focus, and if you look at the profile of our business, over 70 - 80 percent of our business is ATM. We're not hiding from that, it's how we design and architect network. And we expect the Ethernet piece and the enterprise wide area networking technologies and voice technologies to become a bigger piece of our solution, a bigger revenue generator, over time. And conceivably, we could end up with 50 percent of our revenue being Ethernet and 50 percent being ATM. That's OK. We won't lose our focus in terms of how we architect our network and how we design network for customers. And again, in that focus that we have today, if you look at the other industry players, they have a much, much smaller amount of revenues coming from this 70 percent focus that we have. And this is why we're different than the rest of the players right now.
Q. Right. So, as we wind down, just one or two more questions on the financial side. Do you think your stock is undervalued at this point?
A. Well, we let the markets determine that. I think if you look at the past year, we've hit a low of ten dollars a share, and currently we're trading in the $18-$19 range. Our stock's appreciated about 25 percent since the beginning of the fiscal year. We're pleased with the performance. Would we like to see the stock continue to go beyond where it is? Absolutely. Are we committed to run the company for the long-term and add shareholder value? Absolutely. And our strategy is to manage the company as a long-term, independent player, a very strong player in the industry, a leader, and that will bring value to our shareholders. And the performance of the company, over time, will drive the market and valuation for the company itself. So, I don't want to say that it's undervalued. I will say that we are positioned very well today to continue to grow, and the outlook for the company is very good. The demands for the solutions that we sell is extremely strong, right now, and I think that's evidenced by the financial results that we've published recently, and we'll continue to stay focused and explore the opportunities in front of us and to bring value to shareholders over time.
Q. Now, do you ever the tech stocks exchange on the internet?
A. I read a few of them. I don't spend a lot of time reading - you're talking about the chat line?
Q. Yeah.
A. I get their e-mail sent to me. I don't spend time reading the chat lines, because I've got more productive things to do. But what in particular are you referring to?
Q. Well, there were just two things that struck me about it, because it seems you're a pretty solid company with pretty solid products, and that the people who talk, which, granted, are a minority of people, there's always takeover concerns and there's a lot of strong emotions - people seem to either love you or hate you, but they're not satisfied with saying, this is going to be a blue chip stock, let's just hold it. Just a lot of that type of thing. And then, I didn't see any reaction when the change was made.
A. Well, that's partly because, as I said earlier, I didn't want to - I mean, Eric is CEO and I'm now president of the company. He did a terrific job running the company. I've been part of the team, I've always played my role, and as it relates to my transition to president and CEO. I didn't want to make a promotional announcement out of that And those guys have done an outstanding job. It was a balanced announcement, to say the least. As it relates to the chat line - some of the takeover rumors, and so on, I'm not sure where those rumors come from. The only thing I can say is that they clearly are rumors. And it's kind of interesting: the only thing that changes about the rumors, over time, even before we were public, as a private company, were the size of the companies rumored. As we become bigger as a company, the size of the rumored companies that are going to acquire us continue to get bigger. But I can tell you, at this time there's really no truth to what you read on the chat lines. We are not shopping our company. We are running the company as an independent company, we have a very big opportunity in front of us, and we're going to capitalize on it and take advantage of it. We're growing a terrific organization that has a terrific opportunity to compete. And what's interesting when we're talking about the competition, quite often, in the sales cycle, and I'm involved with customers very often, and quite often the customer's only concern, they think we've got the right technology, the right architecture, the right road maps for our products, the right support organization, we've got all the right things. The one thing that concerns them is this issue that they read in the chat lines, are we going to be acquired. That's actually presented to them by our competitors as, well you don't want to do business with Fore Systems, because they're not going to be around. Well, that is the easiest thing to address, for us, and it's the easiest thing to convince customers that we are building the company to be a long-term player in the industry. We are a leader in the industry and we're going to protect our leadership position, we're going to enhance it, we're going to grow it. And we're very competitive. And when we have this opportunity, we're going to take advantage of it. And it's easy to tell the truth. It's easy to look customers in the eye and tell them that we're building the company to be a a long-term player in the industry, and we're not building the company to sell.
Q. So you think, unequivocally, you are not -
A. We are not doing that.
Q. You're not for sale?
A. If would not take the job as CEO and president of the company if I was asked just to take the role to just sell the company. I would not accept the position to do that. We're building the company for the long-term. And the evidence of that, again, some of the investments we've made in our business over the past year, investments going forward. If we were a company that was shopping our business, we would not spend $45 million on a new campus facility, we would not enter into a ten-year agreement with the Irish Development Authority and buy a manufacturing plant in Dublin. We wouldn't expand our sales and marketing organizations as aggressively as we have. So, from that standpoint, then, we've got significant investments that we've made, and we've asked our shareholders to be patient with us, as we continue to scale and grow the the company. And that's our plan.
Q. Thank you very much for taking time to speak with me, I appreciate it.
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