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Tuesday, Feb 7, 2023

Networking Company Wired Up

It was a tough 2014 for Ixia, one the company is certainly glad has ended. The Calabasas computer network testing and monitoring firm was without a permanent chief executive for much of the year and faced delisting from the Nasdaq after getting behind with filings. Not helping was a share price that fluctuated from a high of $14.53 in March to as low as $8.54 in October before settling in at $10.74 on Jan. 7. Chief Executive Bethany Mayer, hired away from Hewlett-Packard Co. in August, said dealing with those issues, especially the filings, was challenging because only so much could be told to employees and investors given a quiet period that lasted for months. “That is not a normal business cadence,” Mayer said. Finally, Ixia has entered a turnaround of sorts. In September, it became current with its quarterly filings, and Mayer has since met with employees, investors and customers. She is putting together a strategic plan for 2015 with a goal of growing the company through its portfolio of internally developed technology and possible acquisitions. Ixia’s basic business is manufacturing software and hardware that tests telecommunications equipment and networks, including both wired and wireless, such as 3G and 4G cellular. The testing products can simulate real-world conditions and search for flaws. A major part of Ixia’s future is in virtualization, which uses software to expand the capacity of computer hardware. For example, the technology allows multiple operating systems to run on a single computer server. It is an area familiar to Mayer from her years at Hewlett-Packard and an expertise sought by Ixia co-founder Errol Ginsberg in a new chief executive. As virtualization brings significant change to the technology industry, it should stoke demand among Ixia’s chief customers: phone carriers, corporations and network equipment manufacturers. The company has 194 patents for its technology and has another 185 pending. Matthew Robison, an analyst in the San Francisco office of Wunderlich Securities Inc., in Memphis, Tenn., said that while it was still far too early to pass judgment on Mayer’s performance, Ixia was making smart moves to position itself where there is interest in the markets, such as in security to prevent networks and data centers from being hacked. However, cutbacks in capital spending in the tech industry by component manufacturers using Ixia testing equipment presents a challenge. So, too, does major customer AT&T Inc., the Dallas telecom giant. It is currently funneling capital into the acquisition of El Segundo satellite service DirectTV. “They have a commitment away from buying capital equipment (such as what Ixia tests),” he said. Lengthy struggles Ginsberg co-founded Ixia in 1997 with Joel Weissberger and took the company public in 2000. He served as chief executive through 2007 and remains board chairman and chief innovation officer. The company has more than 1,800 global employees of which about 300 are in the Calabasas headquarters in administrative, research and development and manufacturing positions. Ixia has a presence in Europe, Asia, the Middle East and Australia. But during the years, the company has had its struggles including up-and-down sales that prompted layoffs. And in 2007 it was threatened with delisting from the Nasdaq during an investigation into internal accounting controls that resulted in having to restate or amend quarterly filings. The latest black eye occurred in October 2013 when then-Chief Executive Victor Alston immediately resigned after the Ixia board’s audit committee found false information on his resume. Ginsberg stepped in as interim chief executive and the company began a review of its financial information. It fell behind with quarterly filings for much of last year until becoming current in September, a couple of weeks after Mayer was hired. “Those (leadership) transitions can be hard,” Mayer conceded. Mayer was familiar with Ixia and its products, having been a customer at Hewlett-Packard, where she had been in executive positions in the Network Functions Virtualization business, Networking Business unit and Enterprise Servers Storage and Networking Group for the Palo Alto computer company. She had met Ginsberg through a friend in late 2013 before being approached about the open position at Ixia. With virtualization revolutionizing the tech industry “it was paramount for Ixia to find a candidate intimately involved with these new networking technologies, and we believe Bethany is the ideal executive to build upon Ixia’s foundation,” Ginsberg said in a prepared statement at the time Mayer was hired. As senior vice president and general manager of the Networking Business, Mayer was responsible for a $2.5 billion revenue division with more than a 1,000 employees. By comparison, Ixia had $462 million in revenue in 2013. She also developed leadership skills and operational experience at Hewlett-Packard that applies to Ixia. “Running a business with (P&L), with a technology vision and goals is something I am familiar with,” Mayer said. While getting its financial filings straightened out, the company was in a self-imposed quiet period and couldn’t say much to either employees or investors. In the four months after becoming current, Mayer has been meeting with employees, customers and investors. A key goal will be improving financial performance. After earning $45.5 million in 2012, profits fell to $11.9 million in 2012 and in the first three quarters of last year – the most recent data available – it lost nearly $42 million, including $7.3 million in the third quarter. But Mayer stressed that the company was in good financial shape, was managing expenses, and had growth plans connected with its technology. She has done brown bag lunches, town hall meetings and webcasts with employees promoting the idea of teamwork. “They believe in Ixia and it’s important to them the company is successful,” Mayer said. “I believe that.” Virtual future Ixia’s future hinges on staying relevant to its telecom, data center and equipment manufacturer customers by anticipating where the tech industry is headed and developing test and assessment products to meet that need. That direction is leaning toward virtualization Clayton Weise, director of cloud services at Key Information Systems, an Agoura Hills information technology provider, explained virtualization this way – taking a single physical server and having multiple workloads on it at the same time, each independent of the other. “When we virtualize, we take one server and make it seem like 50 of them,” he said. The concept of virtualization has been around since the 1960s but didn’t begin to take hold until the 1990s with the first software developed by VMware Inc., a Palo Alto subsidiary of EMC Corp., in Hopkinton, Mass. The process is efficient and saves space in data centers. Large technology companies like Google Inc., Amazon.com Inc., and Facebook Inc. use virtualized connections, and as they spread throughout the industry it will benefit Ixia. “It is going to continue down to (smaller) companies and service providers utilizing that technology,” Mayer said. Ixia has developed products, and has more in the pipeline, that test and validate a virtual environment for performance as well as its security – before they are detectable to real life users. “The last thing you want to do is troubleshoot in the middle of a fire,” Weise said.

Mark Madler
Mark Madler
Mark R. Madler covers aviation & aerospace, manufacturing, technology, automotive & transportation, media & entertainment and the Antelope Valley. He joined the company in February 2006. Madler previously worked as a reporter for the Burbank Leader. Before that, he was a reporter for the City News Bureau of Chicago and several daily newspapers in the suburban Chicago area. He has a bachelor’s of science degree in journalism from the University of Illinois, Urbana-Champaign.

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