There aren't too many hi-tech CEOs that have had their entire work careers entirely with their present company. And thanks to the dot-bomb bust, there aren't too many hi-tech companies that have had consistent year-on-year growth and are still with us.
But when you talk to Steven Joe, the President and CEO of networking giant D-Link North America, you get to understand why the company has managed to thrive and beat many of its competitors. Last year the company launched about 60 products and is on track to deliver about the same this year, and commands a leading position in various networking segments, including USB, wireless, and low-end routers.
Steven Joe - President and CEO of D-Link North America
We met up with him last week at the company's headquarters in Fountain Valley, California. Here, 250 of the total worldwide staff of more than 3500 work in an office park that is within sight of a strawberry farm, showing the old Orange County with the new. All of D-Link's manufacturing is done in India, China or Taiwan, although the products are designed in the US along with the lion's share of project management.
Joe began his career at D-Link as a "jack of all trades" technical support technician when he was barely out of college 18 years ago and rose through the ranks to take over the top job in 2000. "When I started with the company, I did tech support in the morning, did packing and shipping in the afternoon, and product repairs before going home."
Joe was a graduate of UC Irvine, just down the road from his offices, and continues to be active with the university, and recruiting many of its graduates as engineers, something Joe is very proud of and also comments on its irony as well.
"I enjoyed my college time, I was a pretty good computer science student but didn't get straight A's. All my roommates were upset because they studied more than I. I am more of a last-minute engineer. The UC system is the strength of California education," he says, and recently was in Sacramento lobbying the legislature to continue funding and supporting the vast network of colleges throughout the state. "We are trying to remind them to support higher education and its trickle down effect for the California economy."
D-Link continues to release wireless products and be a major innovator in the segment. "We have had a good run with consumer wireless for 5 years," Joe says. They announced a new partnership with Trapeze a few weeks ago at Interop that will have both companies working together on future products. Joe said they were excited about Trapeze because "they have some very strong software, and a very strong management team as well." He is interested in expanding them into the SMB marketplace while enabling them to deliver products that are more cost effective by using some of D-Link's designers and overseas manufacturing methods and sources.
What about 802.11b products? There is still plenty of life left in them, according to Joe. "11b is still strong in overseas markets. Most of what is sold in both the consumer and business sector in the US today is 11g, mainly because it is backwards compatible with 11b. We see tri-band - networks that support 11a,b, and g - more for the high end digital home applications, because as you go with more video-on-demand types of applications they require the higher frequencies. Also, we find that tri-band cards are used more and more in Korea and Japan, but in US adoption is quite slow still. We think that as we need more bandwidth, that will drive the need for tri-band."
D-Link has partnered with Atheros for many of their wireless networking products. As we covered in an earlier article, Atheros will make its Jump Start automatic security configuration software open source, "Something we believe in," says Joe. "Eventually you will have multiple brands, and everyone wants their products to work together. My stereo system at home isn't made by a single vendor. We don't expect everyone to just buy all D-Link products. We are also working with Microsoft so you can configure your digital home products completely within Longhorn when it comes out, so that is another path for us."
Speaking of wireless security, D-Link has also made an effort to support the more stringent WPA encryption standard, with more than 80% of products supporting it currently. This probably reflects Joe's own "techno-geek" heritage, and he even secures his home with dual firewalls because "I know what can happen because of what I can do to my friends and neighbors. You need to protect yourself."
Corporate Mentors and Competitors
Joe's long tenure with D-Link has been a good ride, to be sure. "I have had five mentors in the company in my 18 years," he says. "The most recent was Roger Kao, who is now mostly in China now and one of the founders of the company. He taught me a lot, including business ethics, how to handle the cultural issues, how to deal with new products. He has given me lots of honest advice that you can believe in, and just isn't telling you what to do so you can learn from your mistakes. He made me realize that we are just one player in a very big world."
He has a very expansive view of his competitors. "The Linksys acquisition by Cisco has actually helped us," said Joe. "They are not as fast and flexible as we are, they have more bureaucracy, they have to cater to Cisco, but on the other hand they have done very well."
Joe mentions that he worries more about what is on the horizon and the next series of projects at D-Link. "I don't stay awake because of the competition. It is good to have competitors. We admire Cisco because of their size and capability. They do quite a few things well. We surpassed 3Com in global revenue last year. We were surprised, as we admired them as Bob Metcalfe's company for many years."
Joe spoke about the differences between China mainland and Taiwanese quality control. "For our higher-end products, or when we need more demanding quality, and for more complicated products, we are more comfortable doing that in Taiwan." Still about 40 % of the products are made in mainland China. "The products with huge volume and commodity pricing, like network cards, are made there. Not to offend anyone, but I wouldn't drive a Chinese car, for example, they don't last that long." (He drives a German car, by the way.)
Joe has been very happy with their partnerships in the consumer VoIP (Voice over IP) space and promised that "We will be entering the business VoIP marketplace next month. I think we will surprise some people. We went with Primus/Lingo because of their international presence, not just US Canada like Vonage, but they go globally. That is the real value of VoIP and why we partnered with them. They also cover 911 emergency calls from day one, and I feel more comfortable with that especially as a parent of young children." He hopes that other VoIP players will enhance their 911 support because he is a home user of VoIP and feels this support is crucial.
The SMB VAR
D-Link has been a force in the SMB marketplace, and one of the reasons for that is the care and feeding of their channel partners, including retailers, system builders and networking consultants. But it also helps to have the right mix of products and services too. "The timing of the market has allowed us to move forward with the convergence of switching and wireless." He says that is an attractive package for SMB VARs. "They trust us for wireless and many of our IT managers use us at home. Plus we have an advantage because we have been doing Ethernet for so many years, it is one of our core capabilities."
"Our Web smart managed switches will allow people to have a little more functionality without the higher cost of enterprise products and is a perfect product for SMB," he mentioned. "We want to give people more for their money, especially the SMB business user. We hope to continue to expand on products in that category."
"We also have partnered with NCR to offer a four hour on-site service, better value proposition" than Cisco, he says. "VARs get the advantage of selling the service, and end users get the advantage of having a reliable product in their racks. It is a win-win situation for everyone, for us as a manufacturer, and for the end-user."
Joe seems thrilled to still be coming to work. He still has plenty of challenges left and isn't about to slow down. And just as he begun his tenure 18 years wearing many hats, he still isn't just sitting behind a desk. "We are very hands on company, I try to go into the lab and spend some time and see what is going on there. It is work, but I enjoy what I do."