CxO Downloads: Zhone's Mory Ejabat

10:00 AM -- Mory Ejabat, CEO of Zhone Technologies Inc. (Nasdaq: ZHNE), the broadband access equipment company, has been keeping a relatively low profile in recent years. The man who sold Ascend to Lucent in 1999 for a legendary US$24 billion was last interviewed by Light Reading in 2002 and says he hasn’t been to a trade show in five years. So it was nice to get him on the record again. (See Mory Ejabat.)

What was your biggest challenge leading Zhone in 2010?
Getting parts from suppliers. The lead times were stretched so far out as suppliers reduced their inventory because of the industry downturn.

What do you expect your biggest challenge in 2011 will be?
The key issue is: Will the economy stabilize? In addition, we’re a global company and we face some formidable competitors such as Alcatel-Lucent, Huawei, and ZTE. It’s critical for us to be able to react quickly to pricing changes, and to be able to offer competitive pricing, features, and functionality.

What will be the biggest regulatory issue for telecom in 2011?
Is the government ever going to spend the stimulus money? (See Zhone Says 'Buy American'.)

What’s the most important advice you can give someone who wants to be CEO of a telecom equipment company?
In the tech industry, you have to keep ahead of technology advancements and produce the product that is best on price and performance. Think ahead, and build for the future.

What was your biggest mistake as CEO?
We did lots of acquisitions. Some people see that as lots of mistakes. But they gave us the technology to go forward and be successful and survive the tough times between 2000 and 2005. For example, the Paradyne acquisition gave us the manufacturing capabilities in the US that are actually allowing us to compete and win against the Chinese. If you get a success rate of 60 percent in acquisitions you’ve done well. (See Zhone Stays Put in O-Town.)

Your biggest success?
Raising the first round of financing at Zhone and getting $500 million. They were good times [1999] to raise money.

What will be your legacy at Zhone when you leave?
Managing the company through hard times and good times. We went through two economy blowups, the Internet bubble and a worldwide financial crisis. When I started Zhone there was 250 startups, now there are only a handful left.

What book are you currently reading?
"The Art of Racing in the Rain" by Garth Stein. You can see the world through the eyes of a dog, he says. It makes you look at problems from every angle.

— Joe Braue, Group Director and SVP, Light Reading

paolo.franzoi 12/5/2012 | 5:16:23 PM
re: CxO Downloads: Zhone's Mory Ejabat


Uhhh...give me $500M and I will make a business last 10 years!  Heck, I could make it last 100.


joebraue 12/5/2012 | 5:16:23 PM
re: CxO Downloads: Zhone's Mory Ejabat

Geez, you guys are tough. Mory is proudest that Zhone made it through the bubble while hundreds of others did not. Ed Zabitsky, who follows Zhone as CEO of ACI Research, say Zhone's access platform, the MXK, is hot but that Zhone's success is dependent on timing (developing market carriers turning to GPON/EPON) and ability to not be sqashed by elephants (A-L and the Chinese).

"Yes they spent a lot of money and didn't get great results, that's old news," says Zabitsky. "They have focused the company and have the right product. Now they have to deliver. In the meantime, they'll have to put up with the potshots."

jwmarc123 12/5/2012 | 5:16:23 PM
re: CxO Downloads: Zhone's Mory Ejabat

Mory has kept Zhone afloat for over ten years. That is a testament in and of itself considering the Telcom climate. I have moved around the industry  and have found myself at two businesses that use Zhone gear and it has worked well for the applications it was used for... I say this even after being an early  Zhoner. Mory I will say congrats and best of luck for 2011.

cyber74 12/5/2012 | 4:15:19 PM
re: CxO Downloads: Zhone's Mory Ejabat

Fact is, the company has not been successful from the perspective of shareholders. Aside from recovering from the fall 2008 crash, the company's stock price has been monotonically down since it IPO'd. And has Zhone ever turned a GAAP profit for a full year? Not that I recall.

Stevery 12/5/2012 | 4:15:16 PM
re: CxO Downloads: Zhone's Mory Ejabat

>the company's stock price has been monotonically down since it IPO'd.

Therefore, the IPO was a huge success from the company standpoint:  They maximized the price of the offering to the suckers investors.  

Those who sold you the stock would like to thank you for your continued business.

cyber74 12/5/2012 | 4:15:15 PM
re: CxO Downloads: Zhone's Mory Ejabat

Indeed, another success story for insiders, VCs, and investment bankers. 

DCITDave 12/5/2012 | 4:15:12 PM
re: CxO Downloads: Zhone's Mory Ejabat

Let me get this straight: Instead of highlighting how many jobs he has created, how many people his company has provided with broadband service, or how many service provider customers he has helped, Mory wants us all to remember that he raised a ridiculous amount of money during a bubble economy.

Well done, sir.

muffinman 12/5/2012 | 4:15:09 PM
re: CxO Downloads: Zhone's Mory Ejabat

I don't think they've ever made up for the drop in Premisys and Accessnode revenue with new products, which is not a good sign.  2001 is a long way away...

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