Welcome to ceocfointerviews.com!

Richard N. Snyder
Richard Snyder is Chairman and Chief Executive Officer responsible for driving the strategy and vision of Forgent’s future. After serving on the Forgent’s Board of Directors for three years, he was appointed chairman in March 2000, interim CEO in April 2001, and chairman and CEO in June 2001. Dick led Forgent through its complete restructuring divestiture of VTEL and focused the company on video network management software and professional services. Previously, Dick was a group general manager at Hewlett-Packard for its $3 billion inkjet printer business, where he created the DeskJet brand. Dick also served as senior vice president and general manager at Dell Computer Corporation, where he was responsible for reestablishing the successful Internet sales model and the operation of Dell’s $3.5 billion America’s Region. He was also senior vice president of worldwide sales, marketing, service, and support for Compaq Computer Corporation, for which he had a $20 billion P&L responsibility.

Company Profile:

Forgent Networks (NASDAQ:FORG), based in Austin, Texas, provides enterprise video network software and services to improve ease-of-use, reliability and manageability of video networks. Video Network Platform (VNP) is the industry's only video network management software that improves quality of service and cost-of-ownership for multi-vendor, multi-protocol video networks. Forgent's product portfolio consists of leading brand video products -- integrated into custom and vertical market applications.

Since the birth of the videoconferencing industry, equipment vendors and service providers have touted the benefits of video communications. However, problems with ease of use, reliability, and manageability continue to limit the growth of videoconferencing as a mission-critical business tool. Forgent is committed to solving these problems with tools and services for managing multi-protocol, multi-vendor video networks. By increasing the quality of service while reducing the cost of ownership, Forgent's software products and solutions enable videoconferencing to achieve its true ROI.

Professional Services:
Forgent Network's full spectrum of professional services, which have been deployed in thousands of sites, provides network planning, Interoperability testing, technical support, maintenance and training, which ensure the successful operation of video networks.

Software Products Includes:
Global Scheduling System™ (GSS) - an enterprise-ready software solution that reduces the time & costs associated with meeting management. It helps organizations of all types reduce the cost and time associated with the management of their large-scale meeting environments. This includes workflow improvement, utilization review for resource planning, and centralization of all associated resources and activities. The GSS is a web-based application that runs within a corporate intranet. It combines the management of conference rooms and all associated resources and services in one easy-to-use application.

Video Network Platform (VNP)
VNP fills a critical gap by providing the first integrated video network management tool. VNP brings the power of network management to videoconferencing to improve its quality of service and reduce its cost of ownership. Unlike device management software, VNP manages your video network from the network out. It enables you to monitor and manage all of your video devices — from multiple vendors — as well as your network devices. That means that you are not tied to a proprietary network management tool and a single vendor solution. VNP allows you to grow your network with whatever devices and protocols you deem appropriate.

VideoWorks - Providing a better video experience
Forgent's VideoWorks solution builds on the VNP management platform and adds scheduling and call automation capabilities to deliver "lights-out" videoconference operations and management. VideoWorks makes it easy for end users to schedule videoconferences and have them launch on-time, every time.

Mr. Snyder: “Forgent has a deep and a rich history in the video conferencing industry with more than 20 years of video communications experience. It was formally a combination of companies including CLI and VTEL.

Mr. Snyder: “They were public and joined with a company called VTEL in the early 90’s; VTEL is a video conferencing, end-point video manufacturer and provider. This underscores that the development of the market of video conferencing, the understanding of the technology has been a rich history with this company. A year ago, the company changed it’s name to Forgent Networks, Inc. due to the recognition by the Board of Directors that there was a number of factors going on in the industry. First, the price of equipment was being driven down. Much like the computer industry, the margins were becoming much thinner, the volume of the products were certainly increasing and becoming commodities and that the opportunity was really in making the video conferencing equipment more reliable and easier to use. We found that the industry was not growing as a whole and it was due to a lack of progress in these areas.

Our understanding and background of the market was that most of the problems were in the network. Therefore, we decided to reform as a company that would focus on managing video over the network. This enabled us to so solve these problems and to create a new category and make a significant contribution to the industry as a whole. That formation unfolded a year ago as we developed our first software product and released it at the end of last year. We’ve been growing software services revenues and we are continuing to build our franchise in this area.”

CEOCFOinterviews: Has their been any recent acquisition that could impact the future of your company?

Mr. Snyder: “Most recently, we acquired Global Scheduling, which has software that schedules video conferencing of calls and other requirements within the enterprise. This move speaks to our strategy to continue to grow the company as a software company that will manage and improve the use of user reliability of video over the network.”

CEOCFOinterviews: Can you give us a picture of your revenue model, and how you’ve been doing?

Mr. Snyder: “If you look at the components of the business today, we have a service component which is about $5 million dollars a quarter, so it’s roughly a $20 million dollar revenue stream on an annual basis. Our software revenue has increased to roughly a half of a million in the last quarter and we are projecting a million this quarter and we feel that by the end of the calendar year we should have a $5 million dollar software business exiting the year.”

CEOCFOinterviews: Where are the funds coming from to continue to grow your business?

Mr. Snyder: “Part of the financial strategy was the idea that we had a strong service business in the video conferencing arena, which has produced the cash to fund our software opportunity. We are a very financially stable company with a balance sheet that has had an excess of $20 million dollars in cash. However, we haven’t burned cash because we’ve continued to be able to fund our business from the service area, which has provided very well. Most recently and the most exciting news that Forgent has had was that given our rich portfolio of intellectual property, we began a process of looking to license some of that portfolio. We began the process about a year ago and recently concluded our first licensing arrangement to a large digital camera manufacturer. This gives us a new source of funding that provides a very rich opportunity for Forgent.”

CEOCFOinterviews: Which area do you think will give you the most growth over the next couple of years?

Mr. Snyder: “It’s a good question but each area is very different. For example, we really try to make sure that folks understand that the core business, the opportunity here is the enterprise video network software. That is because this is an industry that is experiencing significant growth. The drivers behind the industries growth is the movement from switched networks to IP (Internet Protocol), which is happening at a fairly significant rate. Moreover, the reason for that is that the people want to converge all of their voice, data and video under one network and as they do they need the management tools to make that happen and of course that is what Forgent is in the business of doing. Therefore, that is the key driver not only domestically but also worldwide.

This will continue to provide a significant opportunity for us to capture it’s a multi billion dollar opportunity here over a very short period of time, but that’s not to say that this intellectual property won’t grow faster. The only difficulty is in predicting the stream as it comes it. You really don’t know quarter to quarter which license arrangements you’ll be able to make or how that will ultimately show in the income statement. Therefore, our message to our investors is that you have the best of both worlds. We have a very strong high growth software business driven by the industry and now we’ve added the stability of a patent portfolio, which we will continue to strengthen your balance sheet and provide funding to scale the business as it grows.”

Mr. Snyder: “The market for the video conferencing that we play in today is expected to be over $5 billion in 2006 from about $5 billion today. That is all of the equipment, sales, service and software if you look at the projection of the software piece of that it is roughly a billion dollar opportunity in the year 2004.”

Mr. Snyder: “Well, you know as I mentioned earlier, it is a new category so it is a little bit difficult to determine the size of this but we believe we are one of the market leaders already in being able to manage video over the network. The competition today is really defined by a few small companies in this business and we have already worked our way significantly up that stream. It’s also to some degree the traditional video conferencing manufacturers who put some of this management processes in their equipment but it doesn’t do the same breath of work across the network that Forgent does.”

CEOCFOinterviews: When you look at growing your business what is your marketing and sales strategy, does it involve partnering or are you doing everything in-house?

Mr. Snyder: “We decided that our target customer is the Fortune 1000 enterprise. These are companies that use a lot of video conferencing communications and it’s growing because of events such as 9/11 where travel has been reduced. These folks are using more voice and video so we target large companies in the financial sector, manufacturing, and pharmaceutical field. Government and education are also big sectors in video conferencing. We are using a direct approach with our own sales force to penetrate this sector but we also recognize that we need partners. Therefore, we are also working with some key partners to try to make sure we expand our business quickly in these sectors.”

CEOCFOinterviews: Are you currently dedicating much of your revenue for R&D?

Mr. Snyder: “Yes we do and our R&D spending is a significant investment relative to our incoming revenue. However, I think that is one area I would point out is the key differentiator. When we began the process and the board determined that we wanted to get into this business, we went out and hand picked a software development team that is extremely experienced, coming from companies such as IBM, BMC Software and Hewlett Packard. They have had experience in putting together this kind of enterprise system before, they know how to do it quickly and how to do it well and it certainly is a key asset of Forgent moving forward.”

CEOCFOinterviews: Will future growth come through sales of new product to current customers, or expansion in the marketplace?

Mr. Snyder: “I think it is going to be a combination. Our plan today is to organically grow the software based on our understanding of our customers need within the environment that we have targeted. However, having just made an acquisition of another software piece that sits very nicely in our offering allows us to scale quicker and I think we are going to do that again. We continue to look for opportunities to add to the portfolio of product that we have that will make us a leader in work management across the video network.”

CEOCFOinterviews: Has your product pipeline been developed through your own R&D efforts or acquisitions?

Mr. Snyder: “Most of it has come from our own R&D efforts. Currently, the GSS (Global Scheduling System™) portion is the smaller part of our revenue but significant to our future. I think our core business will continue to be a key driver but it depends obviously on what kind of strategic acquisition we can identify and the intellectual property funding now gives us the ability to look at a much broader prospect.”

CEOCFOinterviews: Are your products and services being sold internationally as well as in the United States?

Mr. Snyder: “Yes, but I would say on a very limited basis, we do have some representation in Europe and we have sold some of our software in the U.K. but we are being very cautious in expanding internationally. However, the global market is a significant future opportunity that we are intending to take advantage of.”

Mr. Snyder: “Right now what we have decided is that with the ability to scale and support the European business, we will start in the United Kingdom. We have some relationships in Germany and we will look carefully at expanding there. We have worked with some companies, we have done some beta testing in companies like BMW and Deutsch Bank so we continue to look for opportunities to expand Forgents positioning among large international players and large users of video conferencing. However, what we will do is make sure that we can support the customer and that the cost structure is in line with what we want to do prior to expanding too quickly. For example, we find that this kind of product doesn’t really lend itself to multi tiered distribution, it’s somewhat complex and needs support capability that we can provide. It is a direct approach and so we need to make sure we can afford to put the people where it needs to support wherever the geography may be.”

CEOCFOinterviews: Are there any hardware requirements in using your software?

Mr. Snyder: “The only hardware requirement is a server and a standard Microsoft Platform, which is part of the package we sell to the customer. Therefore, it is a very generic offering. We also announced a package called “Video Works” this week. Video Works puts our software along with the multi point control unit. It is the bridge from the Accord Networks or RADVision and allows us to give a complete solution to automatically launching their calls and managing their video conferencing calls. Hence, in that sense, we do sell some hardware, but it is only to add value to the package of software that we offer.”

Mr. Snyder: “I think that the number one driver there is the movement to IP to the Internet Protocol, to the converged network. Number two, is a demand in rich media. I think you are seeing some parts of that through web conferencing, through people’s need to have things on their desktop. Further, we think that will continue to be driven down to PDA’s, hand helds and others where people want rich media and graphics to communicate and collaborate. All of that requires some kind of management of a network, so we see that as a bright future in being able to continue to extend our application to all of these new environments.”

CEOCFOinterviews: Do you feel that you have the right management team in place?

Mr. Snyder: “The management team that we have put into place here I think is important. To some degree we call ourselves a start over because we have taken a fairly traditional company that was starting to go in decline because of staleness of the industry and have reformed it into a high growth dynamic company. I think part of the essence of that is picking the right people. We have an experienced CFO, Jay Peterson who came out of Dell and IBM, and Ken Kalinoski, our Chief Technology Officer who has a rich background at IBM, over twenty years at IBM and in looking at this whole area of video and media management. I joined the board four years ago, became Chairman of the Board and last year became CEO. My background is over twenty years in Hewlett Packard running their inkjet printing business then subsequently with Dell and Compaq as well. Therefore, I think it has given investors some comfort in knowing there are experience people at the wheel and we continue to look for ways to strengthen the team and add momentum to the company.”

CEOCFOinterviews: In closing, what would you like to say to your current shareholders as well as potential investors?

Forgent Networks is growing as a software company that will manage and improve the use and reliability of video over the network

Technology
Software & Programming
NASD: FORG

Bio of Chairman/Chief Executive Officer

Company Profile:

Forgent Networks is growing as a software company that will manage and improve the use and reliability of video over the network Technology Software & Programming NASD: FORG

Bio of Chairman/Chief Executive Officer

Company Profile:

Forgent Networks is growing as a software company that will manage and improve the use and reliability of video over the network

Technology
Software & Programming
NASD: FORG