In the spotlight: Avici Systems interim CEO Bill Leighton

During the company’s last earnings call, Avici Systems interim CEO Bill Leighton deflected a question about the impact of an SBC acquisition of AT&T, Avici’s biggest customer, by dismissing what was, at the time, only speculation. He spoke with Telephony’s Ed Gubbins in more detail yesterday on that subject and on his overall efforts to retool the core router vendor.

On the impact of the AT&T/SBC merger: Obviously I don’t know what their plans are. It’s not appropriate for me to comment on that. But SBC bought AT&T for three things: its brand, its enterprise customer base and its network. We power their network, the largest, most reliable IP network in the world. The Avici core routers are at the core of that network. We’re pretty optimistic about this. It will mean more traffic as SBC continues with its broadband deployments and wireless deployments through Cingular Wireless, so I think there’s a lot of upside and opportunity.

On SBC switching to an Avici competitor: They could. Anything’s possible. But think through the business case. It’s the world’s largest network performing at a level no other vendor’s able to come close to. If it ain’t broke, don’t fix it. That makes no business sense.

On Avici’s partnership with Nortel: It takes on the order of a year to get a major distribution channel activated, particularly one in an area where you have long sales cycles to begin with. At this point, sure, we’d have like to have seen more stuff coming through. At the same time, reality says you have to set reasonable expectations when you establish one of these. Carriers have not been spending a lot of money. That makes it doubly hard when you’re trying to activate a channel. Carriers have been reluctant to commit to new projects. But the overall environment is improving, and we’re starting to get some decent traction with Nortel. Translating that to revenue is where the rubber meets the road.

On root-cause analysis: I took the [Avici] team through a whole ongoing strategic planning process. Why did we win when we won, why did we lose when we lost, why did we get no decision. Sometimes you think you lost for Reason X. But if you peel it back, you find that wasn’t the real underlying reason; that’s just what the customer told you. Having been the customer, I know the language. We’ve been doing lots of role-playing here. When you’re in a sales situation, frequently you only hear what you want to hear. Customers have learned how to deal with these multi-vendor environments. They have a language for how to deal with a vendor. Unless you know that language, you can fall into the trap of seeing or believing something when that’s not really the root cause. I had HR do them, legal, finance, sales. Everyone took a different customer win or loss scenario. We went through it to see: Was that really the reason? If you had done that, would you have won it? A pretty clear pattern developed. Don’t ask what it was; I’m not going to tell you.

On carrierspeak: If a carrier tells you you got eliminated because you don’t have Feature X, typically that really means, “I’m going to find a clean reason you can’t escalate around.” In reality, in rare cases is it Feature X. It’s usually a broader thing about not liking the technology or whatever. If I’m a carrier and you’re a vendor and I want to just get rid of you cleanly, I just say, “Well, you don’t have Feature X.” And I can always find a Feature X. And then what can you do? You don’t have recourse. If I tell you you’re fifth out of five, you’ll come back at me with new proposals and new things. Maybe you know my boss’s boss’s brother-in-law. I just don’t need the aggravation. The cleanest example is, “You don’t have Feature X.”

On turning Avici around: We did an inventory of assets. I mean not just equipment but what are we really good at, what differentiates our product and what allowed us to develop those differentiators. We’ve developed a three-component strategy. The first, in the near term, is tactical execution. Second is increasing differentiation. And longer term is looking at different approaches of building networks as we anticipate future technology trends. How can we use our set of assets to increase the value of core routing solutions to our customers?

On Leighton’s mission as interim CEO: Near term, it’s to figure out where this company needs to go strategically. I’ve been working closely with the board. They’re on board with the direction we’re taking things. There’s no time limit. We’re not yet at the point where we set specific milestones on things. I look at things a little differently than they have been looked at before [at Avici]. I’ve been able to change our approach at the point of sale, how we look at the customer, how we deal with the customer. If it works, I’ll tell you the whole story.