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CxO Downloads: Extreme's Oscar Rodriguez

Joe Braue
iBraue
Joe Braue
12/22/2010
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6:00 AM -- In August, Oscar Rodriquez brought his long resume (nine companies in 25 years, starting as a design engineer for Motorola making two-way pagers in the '80s with the last stop as CEO of Movius Interactive) in the telecom business to Extreme Networks Inc. (Nasdaq: EXTR). He’s been traveling the world seeing customers and employees and gave his first communications industry interview at Extreme HQ. (See Industry Vet Takes Extreme CEO Job.)

Why did you take the job at Extreme?
I always look for a company in a good position to take advantage of trends in its market. In ours, there are a number of inflection points driven by key trends, such as virtualization and mobile productivity devices, that are driving consolidation. Very large brands are becoming one-stop shops. But we’ve been there and done that -- remember the old mainframe days -- and customers want open standards and best-of-breed alternatives. The opportunity for Extreme is that we’re the last large independent public company serving the Ethernet space. From a telco perspective, iPads and other mobile devices are driving huge demand for Ethernet infrastructure that is the foundation of mobile computing around the world. Extreme’s role is to provide best-of-breed performance and management in this space.

So Craig wants to know, did you get hired to sell the company?
No, absolutely not. I was hired to grow shareholder value. This is a company that has been very successful in a number of verticals and segments. We’re on the cusp of finalizing a new strategy focused on driving growth in these hot market segments. We’ll be able to talk more about this in January.

What has been your biggest challenge so far?
I’ve been really trying to understand what the key competencies are at the company. We’ve been so horizontal, with so many customers wins in many markets such as high-performance computing, media companies, and other sectors. We need to coalesce and create a focused strategy and put wood behind the arrow.

What’s been the biggest positive surprise?
The good thing about it is that there are a lot fewer skeletons than I thought there were. This company has a lot of great value. In my career with nine different companies, you find out that technologies are temporal, and the ability advantage in technology is temporal. The DNA of being successful is not. For some companies, it’s like cleaning up a lake; you take out dirty water and kill the fish. Extreme’s great DNA is loving the customer. Extreme’s approach to customer program is not to let me prove how it’s not me, but let me understand what your problem is. It may not be mine, but let me help you solve it anyway.

You’ve got a rich experience and perspective in the networking and telecom industries. What about being a telecom CEO in 2010 is different from your previous jobs?
When I first took over Arris Interactive, it was the go-go years of the late '90s. The goal was how to get out to market the fastest. In the last 10 years, it’s all about getting the right product to the right market. You can’t indiscriminately build a product. You need to choose your markets well.

How have carriers changed?
I’ve just come from Movius Interactive in the Layer 7 application space. Increasingly, carriers are worried about their growth, revenue, and earnings, and what new sustainable customer base can be acquired. A big part of it is fear of not becoming a pipe. They are expecting us to help them create new service revenue and do it cost effectively.

What is the biggest industry or regulatory issue facing telecom industry?
Over the course of next few years we’ll need to think about how we can reuse the spectrum to make way for the massive use of WiFi. It will take a significant time to progress from 3G to 4G around the world. Now, if you turn on your WiFi hotspot, there are many conflicting signals. We need to provide a much bigger piece of the spectrum for public usage.

What is the most important advice you can give for someone who wants to run a telecom equipment company?
Know your customer and know yourself. I recently turned 50, and I thought of something my father told me about the need for domain experience and deep customer understanding. You make decisions faster intuitively when your subconscious is working on data it already knows. Play on your home turf. Go with something you know.

What book are you currently reading?
Crossing the Chasm by Geoffrey Moore. I’ve read it 10 times. It’s one of the fundamental business books. It was written with so much market foresight, talking about the way a customer behaves, the way an early adapter behaves, and the importance of having a whole product, not just a box. There’s a tremendous amount of wisdom in that book.

— Joe Braue, Group Director and SVP, Light Reading

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Pete Baldwin
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Pete Baldwin,
User Rank: Light Beer
12/5/2012 | 4:15:19 PM
re: CxO Downloads: Extreme's Oscar Rodriguez


Ha - thanks for asking my question, Joe. Not that I expected his answer to be any different from what's printed here.  :)  I do wonder, though, whether some people think the best path to shareholder value would be a sale.


I'll be interested to hear about the new plan. Glad to hear it's not like cleaning up a lake.

Pete Baldwin
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Pete Baldwin,
User Rank: Light Beer
12/5/2012 | 4:15:16 PM
re: CxO Downloads: Extreme's Oscar Rodriguez


Not really related, but interesting: An 8-K filing today says Gordon Stitt will end his employment relationship with Extreme:


"As previously announced by Extreme Networks, Inc. (the "Company"), the Company entered into a month to month employment arrangement with Mr. Gordon L. Stitt, terminable at any time by either party. The Company announced that Mr. Stitt and the Company have mutually determined not to renew his month to month employment arrangement, and Mr. Stitt's employment relationship with the Company will end on December 31, 2010."


I don't recall seeing anything about him leaving as chairman, so I'd assume he keeps that post, just not as an employee.

joebraue
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joebraue,
User Rank: Light Beer
12/5/2012 | 4:15:15 PM
re: CxO Downloads: Extreme's Oscar Rodriguez


Good point Craig. Looking at Oscar's past he wouldn't seem to be a guy who would flip the company. And his major pitch is "we're the last big ethernet player who hasn't been gobbled up." That said, of course, money talks.

DCITDave
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DCITDave,
User Rank: Light Beer
12/5/2012 | 4:15:12 PM
re: CxO Downloads: Extreme's Oscar Rodriguez


I think his tenure at Riverstone (restructuring, random new market entries, bankruptcy, sale) and Extreme's never-been-a-leader reputation suggest a sale is probably what's ahead.

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