Soaring with Quick Eagle From private to public and back again Martin Desmarais
SUNNYVALE, Calif. - In more than 15 years as a chief executive officer Vinita Gupta, 53, has had to make some interesting decisions - none perhaps more interesting than her decision to privatize her company in 1999.
While the standard entrepreneurial push might be toward an IPO, Gupta viewed privatization as the move that could save her company.
She founded Digital Link Corp. - now Quick Eagle Networks Inc. - in 1985. The company quickly became a significant player in the data telecommunications industry.
She took the company public in 1994 and it continued to grow with employee numbers peaking around 250 and its valuation surging toward $300 million.
Things were going so well that Gupta, who served as the company chairman since its inception, stepped down from her role as president and CEO in 1997 and only remained as chairman.
Gupta spent a year-and-a-half outside of the company, but then decided to step back in.
The problem as she saw it was the company had hit a wall.
"We had to change strategy," she said. "Revenues were not going to go up every quarter."
Digital Link's claim to fame was its digital interface products for data communications. While giants like Cisco Systems Inc. built routers that handled the flow of data in telecommunications, Digital Link developed equipment around the routers as part of the process that linked the data between networks.
An early company in this area, Digital Link got a jump on the competition, but Gupta saw others moving in - particularly the big companies who could put out routing and digital interface products.
"We understood that area and were totally focused on it," she said. "But when people began to do this, I thought: We have to move into routing."
Aware of the troubles that such a shift might encounter with Digital Link as public company, Gupta opted to buy out management and make it a private company to pursue her vision. It helped that she still owned 50 percent of the company.
Digital Link was official privatized in November 1999 and the name was changed to Quick Eagle Networks.
The move hurt the company at first, as Gupta expected, but she stuck to her guns as a "long-term thinker" and wasn't discouraged.
"We took a hit and revenues went down," she said. "But we kept some of our big customers - MCI, Sprint and British Telecom."
"(Privatizing) was a very good decision. It was not a flawless decision," she added.
The one thing the company gained was momentum in the industry for an integrated routing and digital interfacing product, according to Gupta.
Now Quick Eagle touts a single box that can handle the transfer of large volumes of data - it incorporates routers, DSL bridges, relays and other telecom devices. Companies use Quick Eagle's hardware and software products to connect local area networks to wide area networks.
Still at about 250 employees in 1999 when Gupta privatized the company, Quick Eagle currently has about 70.
Its customer base remains strong and includes AT&T Wireless, Bell Canada, France Telecom, Korea Telecom Corp. and Verizon.
Even though moving into routing meant taking on the Ciscos of the world, Gupta stands by her decision.
"We have a big opportunity," she said. "We have to find a foothold where we can differentiate ourselves."
Emphasizing on the "one box that does everything" is the way to go for Quick Eagle, according to Gupta.
Product price is also a deciding factor.
"We are 30 percent cheaper than Cisco all the time," Gupta said. "Most of the time our product is 60 to 70 percent cheaper, depending on the configuration."
Gupta's tech philosophy actually plays right into Quick Eagle's all-in-one box.
"I believe in the simplicity of products," she said. "Sometimes we get too tangled in technology."
She firmly believes in following the market and giving it what it needs - as witnessed by Quick Eagles switching into the routing sector.
Her last point of business philosophy is to establish quality management and keep strong communication open between management and the rest of the business.
"This is what I think makes or breaks a company," she said.
These facets of Gupta's business philosophy are exactly what long-time Quick Eagle board member Richard Alberding points to as her strengths.
According to Alberding, Gupta is "naturally a quiet women," who returned to her position as CEO of Quick Eagle with an emphasis on strong communication and increased self-confidence.
"If you don't have self-confidence in that lone job as CEO, you are in trouble," said Alberding.
He joined Quick Eagle's board in 1994. He retired from Hewlett-Packard Co. in 1991 as executive vice president after 33 years with the company.
Alberding credits Gupta for making Quick Eagle a market-driven company as opposed to a technology-driven company.
He praised her for suggesting to the board that they privatize the company.
"It proved to be, I think, frankly a blessing," he said. "She really gets full credit for making a very, very tough decision."
Gupta can credit some of her success to foresight; she started Quick Eagle at an opportune time.
"Data communication was just about to take off," she said. "Routers weren't even known."
"We chose the right field, but didn't even know it," she added.
Quick Eagle was self-funded at the start. However, after several years and as the data telecom industry blossomed, investors began to come calling.
In 1989, Gupta accepted $1 million in venture capital backing even though her company was already pulling in about $1 million a year in profits.
She believed that bringing in venture capitalists would help the company in the long run by giving her a good business partner and keeping her management style "honest."
Gupta graduated from the Indian Institute of Technology, Roorkee, with a degree in engineering in 1973. She came to the United States in 1974 and received a master's degree in electrical engineering from the University of California, Los Angeles.
She worked for GTE Lenkurt in San Francisco and spent eight years with Bell Northern Research Inc. (now part of Nortel Networks) before founding Digital Link.
Gupta's husband, Narendra, is vice chairman and interim president and CEO of Wind River Systems Inc. He also co-founded Integrated Systems Inc.