October 2003

In the CEO Spotlight section in Internet Telephony� magazine, we recognize the outstanding work performed by exemplary companies. Each month we bring you the opinions of the heads of companies leading the Internet telephony industry now and helping to shape the future of the industry. This month, we spoke with Rodger B. Dowdell, Jr., President, CEO, and Chairman of the Board of American Power Conversion (APC).

IT: What is APC�s mission?
RD: APC�s mission is to create delighted customers by improving the manageability, availability, and performance of information and communication systems and networks through the rapid delivery of innovative solutions to solve real customer problems.

IT: What is your vision for APC and how is the company positioned in the next generation telecom market?
RD: The vision of APC is to offer integrated solutions built on industry standards, ensuring availability wherever data is created, transmitted, or stored. Over the past several years, as the telecom industry has struggled, APC has been in the unique position of being able to continue to invest in new products and solutions which are just now emerging into the market. Our expectation has always been that the telecom market will move towards industry standard, IP-based solutions, which are at the core of APC�s value proposition.

IT: Describe some of the key decisions that you have made as CEO to steer your company through the recent challenging financial straits.
RD: Prioritization of resources is always a challenge, but during difficult economic times this process is essential to the long-term success of a company. We really needed to balance the need to streamline operations and costs, with the importance of continuing to invest in select areas that will bring better products and services to market. I believe we have done a good job balancing these two items, making difficult choices in reducing our spending while at the same time investing in new technologies that will help improve our customers� experience.

IT: What makes APC�s services unique and how can a client benefit from using them?
RD: APC�s end-to-end solutions provide wireless/cellular carriers, wireline telecom companies and cable MSOs with integrated and commonly managed infrastructure solutions. Our broad range of open, adaptable, and integrated solutions, along with our system management and environmental protection accessories, ensure the availability and reliability that customers demand for mission-critical IT and communication systems.

IT: What is the most pressing issue facing our industry today, and what can be done can to alleviate this problem?
RD: In my opinion, the most pressing issue facing the telecom industry today is to transition to an IP-based infrastructure while staying profitable. The telecom industry, like any other, needs to continue to invest and innovate to attract new customers and sell more services to existing customers. However, because of the cost/investment model that has developed in this space for the past 50 years, there is very little room for the providers to spend the money required and still drive down their prices to capture more of the user-base. In addition, as more competitors enter the segment (cable for example), the telecoms are not well prepared to fight them off.

The industry needs to move quickly to open standards, realizing that the differentiation is not in their networks. This will drive down significantly the cost of those networks, allowing the industry to invest more money innovating their content and services, which attracts new customers and drives up the fees those customers are willing to spend on a monthly basis. It will also create a much more �sticky� value proposition since the customer will become attached to the content/service and not the network.

Movement to open standards will engage a much different group of suppliers, whose economy of scale and use of �off the shelf� technology will drive down the costs of the resulting solutions as well as the support and service.

IT: Describe your view of the future of the IP telephony industry?
RD: My feeling is that the world is rapidly moving to an �ALL IP� model, which leverages open standards and the resulting benefits of lower costs and reduced complexity. In that world, transporting voice over IP makes a great deal of sense as it gives companies the ability to utilize a single network for voice, video, and data instead of the traditional approach where there were separate analog networks for voice and digital networks for data. We have seen the early adopters deploy VoIP in trials over the past few years and are starting to see more widespread rollouts as prices for the IP phones have come down and standards such as 802.3af (Power over Ethernet) have been ratified.

One significant change that is occurring with the convergence onto a single network, is the requirement to have that network and its critical devices always available. People have come to expect 99.999 percent availability of their voice (analog) networks, and have tolerated lower availability of their data (digital) networks in the past. As these applications (voice, data) merge onto a single (digital) network, people will no longer tolerate less then 99.999 percent availability of that converged network..

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