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December 05, 2011

Diversification Was Key in Helping ADTRAN Succeed in 2011

By Paula Bernier, Executive Editor, TMC

The economy, broadband stimulus delays and Mother Nature made 2011 an incredibly challenging year, CEO Tom Stanton told press and analysts gathered at ADTRAN (News - Alert) headquarters last week. But even though there was little improvement in the economy this year, tornados brought the company’s Huntsville, Ala., headquarters down for six days, and other natural events created some supply chain challenges, ADTRAN had a great year.



The company’s sales are up around 20 percent at ADTRAN, if you include expectations for this fourth quarter, he said.

ADTRAN achieved this continued growth, in part, by diversifying its customer base and sales channels. The company, best known as a supplier to tier 1 telcos, is increasingly courting and winning international carrier customers and tier 3s.

On the enterprise side, meanwhile, it’s increasing its VAR sales, which have grown six consecutive quarters. He talked about how ADTRAN is working to be more relevant to the VAR channel and customer base with its products, noting the company’s purchases of Bluesocket (News - Alert) and ObjectWorld. And Stanton added that all of ADTRAN’s enterprise channels have grown for at least four quarters.

The company started to win name recognition and the confidence of enterprise customers initially by selling through carriers like Verizon (News - Alert), with which enterprises already had relationships and confidence, he explained. Now ADTRAN has some momentum on that front so it’s expanded to sell through the VARs. ADTRAN now has 3,400 VARs in the U.S., and it’s heavily focused on training and otherwise supporting its VAR partners.

“On the enterprise side to some extent the recession helped us,” continued Stanton, explaining that tough times mean customers focus more on the value they can get for their dollar.

ADTRAN, he said, is a very practical company that understands things happen in a time period much slower than people typically think. As a result, he added, ADTRAN tends to enter markets it knows are going to be there – as opposed to into speculative markets.

However, ADTRAN wisely moved to new growth areas like Ethernet, fiber and IP, as opposed to clinging to its legacy copper products, which Stanton said really “fell off a cliff” in 2011. He said that 95 percent of what ADTRAN is doing now is Ethernet- and IP-based, and that 85 percent of its people are focused on software.




Edited by Rich Steeves
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