Stratus CEO Promises Legacy Upgrade

Stratus Technologies International, a Maynard, Mass.-based maker of fault-tolerant servers, last week reported a $3.6 million loss and $64.6 million in revenue for its third quarter, which ended Nov. 23. It was the first public earnings report in five years by Stratus, which was split in two in 1999 and then reunited last year. David Laurello, Stratus' president and CEO, spoke with Computerworld prior to the release of the third-quarter numbers.

Stratus is a private company. Why are you disclosing your financial results? Late last calendar year, we completed a $170 million bond offering. Bonds are traded in a public market, and you follow a lot of the same financial disclosure rules as a public company.

What's the future of your Continuum servers? We continue to sell our legacy line. And the reason we do is because a lot of our applications are very "sticky" to the platform.

In the late 1980s and 1990s, we sold our product to customers that ran their most mission-critical applications on our box. And once it's up and running, our customers tend not to want to change it. If you make an 800 call in the United States, it goes through a Stratus box.

Will your legacy users be facing an end-of-life scenario at some point? We continue to upgrade the Continuum platform. For our VOS customers, we're actually taking the operating system and migrating it on to the ftServer, our Windows-based server platform.

How important is the ftServer to Stratus? That's where all our new business is coming from. We started shipping it in June 2001, and since then we've sold it to over 850 new customers. If you look at the five-year period before we introduced ftServer, we were lucky if we had 20 [new] customers.

What are you doing about Linux? In June, our plan is to release a Linux [offering] on ftServer. This will primarily be focused on the telco marketplace. In 1998, telco was 50% of our business. Now it's about 25%. With this new Linux ftServer, we're really excited about driving some growth in the telco area.

David J. Laurello, president and CEO of Stratus Technologies International
David J. Laurello, president and CEO of Stratus Technologies International
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To read the full interview with Laurello, go to QuickLink 44224.

Copyright © 2004 IDG Communications, Inc.

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