Note: The Skinny blog is written by Rick Smith, editor and co-founder of WRAL Tech Wire and business editor of WRAL.com.
RESEARCH TRIANGLE PARK, N.C. – Jeff Reedy and Kevin Sheehan, friendly rivals since 2003 as chief executive officers at Ethernet technology firms, are now partners.
Their companies – Overture Networks, which was run by Reedy and Hatteras Networks, where Sheehan is CEO – announced Tuesday that they were merging.
The combined venture will operate under the name Overture with Reedy as the CEO and Sheehan as the president and have some 200 employees. (Read more about the merger here.)
Both companies are venture backed, privately held and growing after making cutbacks in 2008. Each operates worldwide with a number of products focused on different aspects of Ethernet-over-copper technology. The “secret sauce” of each is expertise that enables faster transmission of data over copper networks.
WRAL Tech Wire talked with Reedy, a co-founder of Overture in 2000, and Sheehan, CEO at Hatteras since 2003 and before that its vice president of marketing and product development, about the merger, its impact on them as individuals as well as their employees and companies, and what a combined company offers customers.
The fact both companies were growing helped expedite merger discussions, Reedy said.
“Both companies were coming off record years, and both are financially strong,” he said. “When you put the companies together, we not only are very strong and growing quickly with little overlap and also have strong balance sheets, so we won’t be looking to raise any money with this [merger.]”
WRAL Tech Wire’s Q&A with Reedy and Sheehan:
What were the reasons for the merger?
“We both grew up here in RTP going after different segments and complimentary segments of the carrier Ethernet space. Over the last couple of years, we both have experienced rapid growth, and there has been rapid growth and rapid acceptance in the carrier Ethernet space.
“More and more, Jeff and I would find ourselves at the same time meeting with customers. They would save ‘We love your products in this segment. If would be great if you had products for this complimentary segment.’
“When Jeff and I would run into each other that their airport, we’d both say you’re No. 1 in your segment and we’re No. 1 in ours and carriers are asking us for both.
“Really, the impetus coming for this [merger] is coming from the customer base and the technology.”
“The carriers were looking for a one-stop shop, whether it was fiber or copper. They wanted a solution from a large vendor with some scale.
“By putting our companies together, we get some sale
“There’s a lot of innovation required in the market. We can respond faster to evolving networks. Scale also means more support for customers and service. We also have more feet on the street.”
“Kevin and I known each other for years. The companies have actually been working together informally and partnering in certain cases.”
Why did you choose the Overture name?
“The word Overture has much more universal acceptance globally and is easier to understand.”
“You’d be surprised that Hatteras, unfortunately, is not that well known as a locale outside of our ear and the east Coast.”
Hattersa went through cutbacks in 2008. Did that help position the company for growth?
“In 2008, we saw the coming economic meltdown, and we tried to get ahead of that. Unfortunately, we lost some parts of our team. We were very fortunate that we were able to achieve sequential years of growth and we were able to hire a lot of people back.”
Did Overture have a similar experience?
“In mid-2008, we also had a small cutback somewhat in anticipation of what we saw coming. The telecom sector saw some of the economic woes coming a little sooner.
“On the other hand, the telecom sector has done very well in the economic recovery. People have seen the need for networking, that it’s a critical part of their business.
“They need faster access whether it be to their other locations, the Internet or the ‘cloud’ [computing].”
Kevin, you have been a CEO for a long time. Are you ready to be a No. 2?
“I’m excited to work with Jeff, We both have great teams, we both have very exciting companies that we’re putting together to build a formidable company in the telecom space.
“Jeff is a world-class CEO.”
Jeff, what about working with Kevin?
“I’m looking forward to working with Kevin. We need strong leadership.”
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