Koch: The bottom line is, we've got to do a better job delivering return on our shareholders' investments. [Ed. note: That old chestnut again. Sigh...] The key to that from my standpoint is to get the company back to profitability. But more than that, it's to achieve a certain return that is much more in line with Inrange's historical trend of 10 to 15 percent operating income. Obviously, to do that we need to grow the top line, which has been a challenge in this environment.
Byte and Switch: In what areas have you cut costs?
Koch: As you may or may not know, we've had a number of reductions in force. Our headcount has been reduced by about 30 percent since the fourth quarter of 2001; that's the principle area of cost control. We're right around 800 [employees] now. We've also been aggressive in managing our component costs for our hardware. We have a number of techniques we use to get significant reductions in component pricing. We're doing just-in-time inventory for our component builds.
Byte and Switch: Last we heard, Inrange was using its own chip design in its 2-Gbit/s Fibre Channel products. Is that still the case? [See Inrange Nixes 2-Gig QLogic Chip.]
Koch: Yes, we did all the work internally. We began the development of 2-Gig in late December 2001, because we decided we needed to go our own way on the technology to deliver investment protection. We separated the development task from QLogic, and we went with an FPGA [field-programmable gate array], which gives you time-to-market and cost advantages. The development cycle on an ASIC [application-specific integrated circuit] is 12 to 15 months and there's increased development costs. We've used a Xilinx Inc. [Nasdaq: XLNX] FPGA.
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