Extreme CEO: Is There Anything Left to Invent?

By Paula Musich  |  Posted 2003-04-30

Extreme CEO: Is There Anything Left to Invent?

LAS VEGAS—Gordon Stitt, president and CEO of Extreme Networks Inc., posed the question, "Is there anything left to invent?" in his keynote address this morning at Networld + Interop.

In exploring the question he quoted industry legend Alan Kay, who noted: "Perspective is worth 80 points of IQ."

Such perspective, Stitt said, breeds new insights and is at the heart of innovation.

He challenged audience members to look for the real innovators among the dozens of vendors here hawking new wireless networking technology. The question is, "Are you finding the innovation options that give you a competitive edge," he asserted.

The networking industry today acts as if there isnt anything left to invent, he said. He noted that the buzz at CeBit earlier this year was that there was no buzz about new advancements. And he posed the question to the industry: "Has the cycle of innovation been interrupted?"

There is a vicious cycle in which reduced spending leads to reduced R&D investment in an economic downturn, and in that downturn "the market doesnt give you credit for thinking too far out," he said.

But, he said, "The most innovative companies cant keep themselves from full-throttle inventing in good times and bad." That is in spite of the fact that venture capitalists believe that the risks are too high.

Stitt, pointing to the need for looking at the question from a different perspective, believes that the industry today is too focused on incremental improvements. "As an industry were betraying your trust (by doing that). This industry is too often plagued by lack of vision," he challenged.

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Although technology companies today are working hard to be more customer-focused, customers emphasis on doing more with less "doesnt attract big investment," he said.

Those customers "get short term pain relief, but thats temporary. You need really long-term, vision-driven pain relief. You need your vendor to give you big-time innovation. You need vendors that can listen between the lines and hear unvoiced frustration because you think theres no other way," he said.

As an example, he noted the dance of vendors and network consumers who years earlier pushed for faster routers for their backbone LAN architectures, which were a concentration point for a lot of network traffic. Rather than focus on incremental performance improvements in routers, one startup realized the problem was about creating faster networks—not routers. That startup, Extreme Networks, figured out how to build Layer 3 switches, which were less complex and costly than high-end routers or Asynchronous Transfer Mode switches, and the rise of those cheaper and faster switches "paved the way to the Web applications that are vital to businesses today," he said.

"Big innovations come from companies with a distinctive vision. The greatest advancements come from companies willing to buck industry beliefs," he said.

Although ATM was promoted as the only technology that could allow for the convergence of voice, video and data on a single network infrastructure, Extreme looked at its ability to scale and at its complexity and realized it would not work on a broad scale. The alternative was to combine quality of service with Ethernet. Its about expanding your field of vision. Its amazing what you see when you step back to look at the big picture," he said.

In going back to his wireless example, Stitt noted that the challenges facing enterprises wont end with wireless. "The big idea isnt wireless. The vision is based on finding a way to integrate wireless and wired into a seamless network and further optimize mobility without creating more problems or increasing the complexity and vulnerability of the network. You need integrated scaleability, and security, and you want to handle changes at a software level and still manage the network from a single console," he said.

Stitt posed another question: "Is it possible to seize opportunity during an economic downturn?"

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Customers who are making due with existing networks during a downtime dont ask for much in the way of new functions from their vendors. "Lower demand from customers means we can apply resources to R&D to generate big conceptual leaps instead of incremental advancements," he asserted.

And companies that spend more heavily on R&D during a downturn gain the most ground when the economy picks up. "R&D is a core investment in the future of the company," he said.

Bringing out his own crystal ball, Stitt believes that in three to five years the industry will see three fundamental transformations.

The first is a massive proliferation of devices that will "want to connect to your network." Those devices will go far beyond the obvious PDAs, IP phones and storage devices to include noncomputing devices such as building management systems integrated with environmental control systems linked on the network, he predicted.

The second great transformation will come from new and more demanding applications on enterprise networks. And the problems those applications cause will happen on a user-by-user basis. "Rich media, voice over IP, data mirroring, will change the way you do business if they dont bring the network down or interfere with other applications," he forecast.

In the third transformation, the role of the network in business will change. "More business operations have been moved there. It is a core productivity tool to the way your business works. It has to adapt to changes. You need a network that can accommodate both the need to operate on a least cost basis and on a full speed ahead basis," he said.

"The companies that can build and sustain competitive advantage are those that take the time to plan for their transformations," he asserted.

In concluding his talk, he urged users to "see out the vision behind the innovation. Ask, what do you think the network will look like in three years?"

In answer to the question posed in his theme, Stitt concluded: "Absolutely."

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