From application infrastructure to VoIP, these 10 companies do business in red-hot markets. While they might not all be the most powerful companies in their sectors, they are making aggressive product and financial moves that could get them there.
Companies in this article | AMD | |
| Avaya | BEA Systems | EMC |
| Huawei Technologies | Juniper | |
| Mercury Interactive | Red Hat | Trend Micro |
Advanced Micro Devices: Chipping away at Intel
Headquarters: Sunnyvale, Calif.Company focus: Microprocessors and memory devices.
Biggest news in ’04: Introduced 64-bit Athlon processors for mobile devices and faster and lower-power Opteron processors; saw its Opteron processors ship in servers from HP, IBM and Sun; announced plans for dual-core 64-bit microprocessors.
Key strategies and challenges in ’05: Deliver on promised dual-core processors and new power management technologies; convince big Intel-based server makers, such as Dell, to switch over, while broadening its offerings for current OEM partners; stave off challenges from Intel and its Opteron rival, a 32-/64-bit version of Xeon.
Financial track record:
Last four quarters’ revenue: $4.94 billionPrevious four quarters’ revenue: $3 billion
Last four quarters’ earnings: $164 million
Previous four quarters’ loss: $1.17 billion
“We are the x86 company. No other company has the resources that we have on x86. We don’t have three other architectures to worry about.”
– Hector Ruiz, chairman, CEO and president
Avaya: Riding the IP telephony wave
Headquarters: Basking Ridge, N.J.Company focus: IP phone systems and services for corporations including call centers.
Biggest news in ’04: Expanded business in Europe with purchase of call center vendor Tenovis following expansion in Asia with the purchase of Tata Telecom; bought audio- and Web conferencing vendor Spectel; partnered with IBM to integrate voice with business applications and demonstrated interoperability with gear made by Extreme Networks.
Key strategies and challenges in ’05: Make more inroads against Cisco’s IP telephony products; push its gear into carrier networks as a way to offer managed IP voice services; meet goal of boosting revenue 25% to 27%.
Financial track record:
Last four quarters’ revenue: $4.1 billionPrevious four quarters’ revenue: $4.3 billion
Last four quarters’ earnings: $291 million
Previous four quarters’ loss: $400,000
“There is a commitment to ip telephony . . . but we’re seeing a variety of implementation strategies suited to the actual customers. i think that plays exactly to our strength.”
– Don Peterson, chairman and CEO
BEA Systems: Advancing on SOAs
Headquarters: San JoseCompany focus: Infrastructure software, including application server, portal, security, integration and application development tools.
Biggest news in ’04: Detailed Liquid Computing vision for building service-oriented architectures; unveiled Apache Beehive, an open source version of its WebLogic Workshop application framework for building SOAs; launched product and services bundles for key vertical industries.
Key challenges and strategies for ’05: Turn sagging license revenue around; continue to diversify product portfolio.
Financial track record:
Last four quarters’ revenue: $1.1 billionPrevious four quarters’ revenue: $983.7 million
Last four quarters’ earnings: $128.7 million
Previous four quarters’ earnings: $114.4 million
“The delivery of the ideal SOA platform is the cornerstone of our vision for increasing business responsiveness.” – Alfred Chuang, co-founder, chairman and CEO
EMC: Information life-cycle management or bust
Headquarters: Hopkinton, Mass.Company focus: Storage software, hardware and services.
Biggest news in ’04: Introduced Symmetrix DMX, EMC Clariion AX100 and Clariion Disk Library; acquired back-up and recovery vendor Dantz and storage management vendor Allocity; closed acquisition of server virtualization vendor VMware.
Key challenges and strategies for ’05: Integrate Documentum, Legato Systems, VMware and Dantz products; maintain leadership in high-end storage; develop a small and midsize business storage strategy.
Financial track record:
Last four quarters’ revenue: $7.73 billionPrevious four quarters’ revenue: $5.86 billion
Last four quarters’ earnings: $770.6 million
Previous four quarters’ earnings: $275.9 million
“Information life-cycle management is the guiding principle, our strategy, our vision for where we are taking EMC in the future.” – Joseph Tucci, CEO and president
Google: Search engine dominance
Headquarters: Mountain View, Calif.Company focus: Internet and enterprise network search engines.
Biggest news in ’04: Raised nearly $1.7 billion during its IPO in August, using a rare and controversial auction technique that lets more individuals participate; acquired Keyhole, a digital mapping company, and Picasa, a digital photo management company; announced desktop search engine.
Key challenges and strategies for ’05: Stay competitive against Microsoft, which has a competing search engine product under development. Interest its user and revenue base in Europe and Asia. Maintain its stock price, which appears overvalued to many industry observers.
Financial track record:
Last four quarters’ revenue: $2.67 billionPrevious four quarters’ revenue: $950 million*
Last four quarters’ earnings: $222.2 million
Previous four quarters’ earnings: $78.3 million
* Numbers not available for Q4 ’02
“It’s not enough not to be evil. We also actively try to be good.”
– Sergey Brin, Google co-founder, regarding the company’s motto: Don’t be evil.
Huawei Technologies: Taking its act on the road
Headquarters: Shenzhen, Guangdong, ChinaCompany focus: Optical, wireless and wireline carrier equipment for Asian, African and the Middle Eastern markets, and LAN/WAN enterprise products for the Chinese market.
Biggest news in ’04: In November, released the 3Com Switch 8800 series of terabit core switches with 10G and Gigabit Ethernet support; teamed with Siemens’ channel arm, letting Siemens resell and install Huawei’s Quidway enterprise LAN/ WAN products; launched the Quidway NetEngine 16E/08E/05 line of IPv6 enterprise routers in June.
Key challenges and strategies for ’05: Use 3Com and Siemens partnerships to create a U.S. presence for its Quidway routers and switches; repair damaged credibility among U.S. buyers from its 2003 legal run-in with Cisco over IOS code and accusations of illicit photographing of competitors’ products at the Supercomm 2004 tradeshow; fend off aggressive pushes by Cisco, Lucent and Nortel into its home turf.
Financial track record (the company is private held, so financial data is limited)
2002 revenue: $2.7 billion
2002 profit: $108 million
2003 revenue: $3.8 billion
2003 profit: $370 million
“Jokingly, I described [Chinese engineers] going to work in the U.S. as ‘going to the North P ole in winter ‘. . . so many have lost their jobs there.” – Ren Zheng Fei, president
Juniper: Not just for service providers anymore
Headquarters: Sunnyvale, Calif.Company focus: Service provider core and edge routers; VPN and firewall security products and access routers for enterprise networks.
Biggest news in ’04: Acquisition of VPN/firewall vendor NetScreen Technologies for $4 billion; introduction of J-series access routers for enterprise customers; formation of Infranet Initiative council; win of router piece of DISA’s $900 million GIG-BE project.
Key challenges and strategies for ’05: Continue to take router market share from Cisco; expand presence in enterprise networks by increasing sales of NetScreen and J-series products, and enter new markets, like IP PBXs and wireless LANs.
Financial track record:
Last four quarters’ revenue: $1.1 billionPrevious four quarters’ revenue: $650 million
Last four quarters’ earnings: $84.4 million
Previous four quarters’ earnings: $33 million
“We see significant opportunity in expanding the corporate networking and security side of our business.”
– Scott Kriens, chairman and CEO
Mercury Interactive: An eye on applications
Headquarters: Sunnyvale, Calif.Company focus: Application performance management and IT governance software, and application development and delivery tools.
Biggest news in ’04: Acquired Appilog for application mapping technology; partnered with Siebel Systems on application performance testing products; teamed with HyPerformix on integrated application capacity planning tool; announced a product designed to test automation in business processes.
Key challenges and strategies for ’05: Keep application performance management momentum going with subscription-based pricing; make the connection between its application delivery tools, application performance tools and IT governance products to win bigger deals; compete with BMC Software, Computer Associates, IBM and HP as they all look to align business processes and IT service and application delivery.
Financial track record:
Last four quarters’ revenue: $633.1 millionPrevious four quarters’ revenue: $472.2 million
Last four quarters’ earnings: $62.6 million
Previous four quarters’ earnings: $47.1 million
“Mercury is one of the fastest growing software companies . . . [because we] help to improve the business value of IT.”- Amnon Landan, chairman and CEO
Red Hat: Open source grows up
Headquarters: Raleigh, N.C.Company focus: Enterprise Linux operating system and related management services.
Biggest news in ’04: Rolled out Red Hat Desktop software; improved its security offerings by acquiring AOL’s Netscape Communications’ Security Solutions; introduced a Java-based applications server.
Key challenges and strategies for ’05: Keeping viruses and hackers at bay as Linux becomes more prevalent; fending off new open source competitors, such as Sun; expanding overseas operations without killing earnings.
Financial track record:
Last four quarters’ revenue: $157.9 millionPrevious four quarters’ revenue: $104.6 million
Last four quarters’ earnings:$32 million
Previous four quarters’ earnings: $4.4 million
“We now see the availability of a Linux operating system being able to run on over 1,000 commercial applications; the Linux operating system being certified on over 500 pieces of hardware.”
– Matthew Szulik, chairman and CEO
Trend Micro: Quietly making a name for itself in security
Headquarters: Tokyo (North American headquarters is in Cupertino, Calif.)Company focus: Anti-virus and worm defense.
Biggest news in ’04: Introduced a prevention appliance called the Network VirusWall; collaborated with Cisco for worm and virus prevention.
Key challenges and strategies for ’05: Execute successfully on virus and worm quarantine and remediation technologies developed through involvement in Cisco’s Network Admission Control program and Microsoft’s Network Access Protection programs.
Financial track record:
Last four quarters’ revenue: $560.2 millionPrevious four quarters’ revenue: $451.1 million
Last four quarters’ earnings:$143.2 million
Previous four quarters’ earnings:$76.9 million
“We need to secure the network pipe, not just the destination.” – Eva Chen, co-founder and CEO
