Light Reading

Bobby Johnson, Foundry Networks

Light Reading
Interview
Light Reading
7/23/2003
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Bobby Johnson, president and CEO of Foundry Networks Inc. (Nasdaq: FDRY), knows success.

He founded Centillion Networks, an ATM switch startup that was bought by Bay Networks in 1995 for $140 million. At the time, this was one of the highest prices paid for a networking startup in Silicon Valley. The company had already reached profitability after only 18 months on the scene, says Johnson. Bay Networks, which later was bought by Nortel Networks Corp. (NYSE/Toronto: NT), ended up selling over $1 billion worth of gear based on the Centillion products and technology, he contends.

Foundry epitomizes Johnson's hard-driving style. He brought the Layer 2-7 Gigabit Ethernet switching company to profitability within 18 months of starting it. It later launched a blockbuster IPO conveniently timed with the peak of Wall Street's technology bubble, in late 1999. Shares of the company on its first day of trading rose 525 percent from the offering price and closed at around $166 per share. That gave the company a market capitalization of nearly $9 billion on its first day of trading.

Not bad for a guy who started out as an SNA programmer at IBM Corp. (NYSE: IBM) back in the early 1980s. During the quarter century he has been in the networking industry, he’s been involved with some of the hottest technologies of his time, including early personal computing, ATM/Token Ring switching, Gigabit Ethernet switching, and now 10-Gigabit Ethernet switching. Whenever the market has shifted, Johnson has managed to change course.

Of course, things aren't as sunny as they were back in 1999 (see Stock Watch: Foundry Networks). The company’s stock is down a tad from a high of $212. But recently the company has deftly managed its way back to profitability and growth (see Foundry Gets a Fed Boost). Meanwhile, Foundry has been able to expand its headcount, increase its revenues, and develop new products.

Johnson is the first to admit Foundry’s perseverance through tough economic times hasn’t been easy. But so far, it appears to be a survivor. While competitors like Enterasys Networks Inc. (NYSE: ETS) and Extreme Networks Inc. (Nasdaq: EXTR) continue to report losses, Foundry is reporting profits and growth. And judging from Johnson's future product plans, he has no intention of falling behind on the R&D front.

The former Black Belt karate master says he has little time for leisure activities such as golf or tennis. He’s a hard worker and expects nothing less from his employees. That’s one reason Foundry foots the bill for takeout dinners every night for its engineers.

Light Reading was lucky to get some time with this busy executive. Check out the interview and see what Johnson has to say about:

— Interviewed by R. Scott Raynovich, US Editor, and Marguerite Reardon, Senior Editor, Light Reading

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hyperunner
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hyperunner,
User Rank: Light Beer
12/4/2012 | 11:43:28 PM
re: Bobby Johnson, Foundry Networks
I always heard that BJ had an enormous ego, and this interview certainly bears this out.

LR: "When do you think anyone will start selling it?" (10 GigE)

BJ: "IGÇÖve been selling 10-Gbit/s Ethernet for 18 months..."

You, Bobby? All on your lonesome? You don't have a sales force or a bunch of channel partners then?

BJ: (On working in a division of NET) "I took the division to profitability within one year."

Jeez, Bobby, then all those other folks who probably worked their asses off were just overhead eh?

BJ: (On Silicon Valley funding) "And there was Centillion Networks, which was the company I started."

Now hold on there Bobby, didn't good ol' Earle have something to do with Centillion?

..and my favourite...

BJ: "I had just came from a company shipping the premier ATM switch."

But wait, aren't you talking about Centillion? Centillion...the "premier ATM switch"? Is this some new interpretation of the word "premier" I have not previously encountered?

OK, my French has never been worth a damn, but I'm pretty sure "premier" means "first" - right? So maybe the Centillion was the first ATM switch, and then folks figured out how to make them right after that.

hR.


Scott Raynovich
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Scott Raynovich,
User Rank: Light Beer
12/4/2012 | 11:43:18 PM
re: Bobby Johnson, Foundry Networks
Hmm, well that's a simplistic take...

I thought Bobby had some very interesting things to say. I'd never met him in person before, so this interview was interesting. His demeanor seemed more calm than some of the Bobby Johnson myths that circulate about his volatility (maybe we didn't ask the right questions?).

I hope folks will read the interview because he makes some very interesting points about product roadmaps and the historical development of the networking market. The lesson, I think, is just when everybody thinks the world is flat and nothing will ever grow again, we're likely to get slammed with some giant technology shift that will change everything.
new_light
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new_light,
User Rank: Light Beer
12/4/2012 | 11:43:16 PM
re: Bobby Johnson, Foundry Networks
Believe me, everything you've heard about BJ is true...very true. I know from personal experience, the guy is a loose cannon and a bully, if you allow him to bully you.
Personally I feel sorry for the people who have to work there because of this piss poor economy. I was fortunate to have the right skill set which allowed me to run like hell when I realized what a hell hole I was working in.
fbailin
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fbailin,
User Rank: Light Beer
12/4/2012 | 11:43:16 PM
re: Bobby Johnson, Foundry Networks
Scott,
Your interview was right on.
Also your take on Bobby.
He is a hard driving boss but ingenious with his thinking about the future of his product line.
I know this having worked for him and Earl as an Executive Recruiter during the start up phases of both Centillion and Foundry and prior to that when he led Tri Data systems.
An uncomprimising ceo who deserves his due.
enlightenedReader
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enlightenedReader,
User Rank: Light Beer
12/4/2012 | 11:43:14 PM
re: Bobby Johnson, Foundry Networks
In the same thread as that of new_light, I heard that most of their ASIC team left, either voluntarily or involuntarily. So who are left to design the Terathon ASICs for Foundry? Did they farm out the ASIC design to Broadcom?
hyperunner
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hyperunner,
User Rank: Light Beer
12/4/2012 | 11:43:09 PM
re: Bobby Johnson, Foundry Networks
Hi Scott,

My turn to apologise. I often complain about the effect anonymity has on the attitude of the folks who post on boards like this, and here am I falling into the same trap!

I just got the impression from his excessive use of the personal pronoun that he was, perhaps, over-emphasising the role he played in these events, and more specifically not crediting the large number of people who must have contributed to his success over the years. I'd stress that this is not an uncommon attitude among the "Type A" serial entrepreneurs we've seen emerging in the past few years.

I agree, the story was pretty interesting - well I read the whole thing so that's a good indicator. Good job!

hR.
new_light
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new_light,
User Rank: Light Beer
12/4/2012 | 11:42:56 PM
re: Bobby Johnson, Foundry Networks
Can you say:
Marvel...
PacketGuy
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PacketGuy,
User Rank: Light Beer
12/4/2012 | 11:42:52 PM
re: Bobby Johnson, Foundry Networks
new_light:

Don't feel sorry for the remaining Foundry employees. Bobby was extremely generous with option grants in the $4-$6 range. Sounds like you couldn't take the heat of an environment that demands performance and holds you accountable. When I look at my W2, I find it comical that you would pity me.
freethinker
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freethinker,
User Rank: Light Beer
12/4/2012 | 11:42:42 PM
re: Bobby Johnson, Foundry Networks
And when did he get into the computer business?

What the heck - let's say it was Burroughs, which became Unisys.

Whatever happened to fact checkers (and spellcheckers, for that matter)?
Iipoed
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Iipoed,
User Rank: Light Beer
12/4/2012 | 11:42:24 PM
re: Bobby Johnson, Foundry Networks
Having been apart of Foundry from 98 to 02 I feel somewhat justified in responding to some of the negative posts.
Sure BJ was a hard driver, of course no one worked more or harder than he did 7 days per week. keep in mind he already had plenty of millions before Foundry.

As to treatment of employees in the early days he had the foresight to realize the window was small to make a successful impact in the gigabit arena. If he did not demand the committment of his employees to make Foundry a great company it would not be where it is today.

Many early employees have left, left with millions however. Again a vision that BJ had that employees that performed with dedication and committment would be very well rewarded.

For Foundry to continue to evolve and compete with Cisco they must believe and and execute in a manner that allows Foundry to be accepted as the primary alternative to Cisco (in a specific space of course)

You can say what you want about BJ but you cannot say he did not have a vision, execute his vision and establish an organization that is a benchmark for all future IPOs.


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