When Greg Reyes took the job as president and CEO of Silicon Valley-based Brocade Communications Systems, he vowed to make the storage area network infrastructure provider an industry leader.
In three years he’s been able to do that, along the way becoming one of the country’s most affluent people, mostly through stock ownership in Brocade. Last year, Forbes put him on its list of the 400 wealthiest individuals in the United States, with estimated assets of $1 billion.
That figure has likely dropped since the company’s stock tumbled in February, but Mr. Reyes isn’t wasting time brooding over his net worth.
“I don’t look at my inclusion on that list as anything other than an acknowledgement that Brocade has emerged as one of the preeminent technology companies in Silicon Valley,” he says.
Mr. Reyes, 38, took the reins at Brocade after considering more than 100 job openings and interviewing with 27 companies. He even met with all 50 venture capital firms in Silicon Valley to let them know the kind of company he wanted to lead.
“I have always tried to find industries that were major emerging growth segments,” he says. “I started out in the disk-drive industry in manufacturing, then got into computer systems business, then into data communications software business, as that was next emerging segment. I then got involved in wireless communications.”
Born in Newark, New Jersey, Mr. Reyes was reared in Silicon Valley. His father, an engineer who emigrated from Cuba in the early 1960s, moved the family to Northern California in 1969.
His father, Greg Reyes Sr., was a successful technology executive who worked at National Semiconductor and Fairchild Semiconductor. Now a venture capitalist, the elder Mr. Reyes serves on the boards of 16 companies.
“My father was always a role model in terms of work ethic and business acumen,” says Mr. Reyes. “He has always been a sounding board, coaching me with career decisions and through difficult management decisions.”
Mr. Reyes’ high-tech career began with a college internship at Seagate Technologies. He liked it so much he took a full-time job there while finishing his business degree at St. Mary’s College in Moraga, California, at night.
His first job out of college was with Convergent Technologies, which was a leader in Unix and workstation servers at the time. He worked his way up through the sales ranks there before joining Banyan Systems, a networking and data communications software firm, as vice-president of sales and support.
Most recently, he was president and CEO of Wireless Access, which was eventually sold to Glenayre Technologies for $100 million. Mr. Reyes doesn’t consider himself a job hopper, just someone intent on attaining the necessary skills to lead a high-tech company.
“I’ve always had a plan to become CEO of a tech company, and I’ve always been very thoughtful about the companies I chose to work for and whether they would help me continue to develop the experiences I needed to accomplish this goal,” he says.
Under his leadership, Brocade has turned in seven straight quarters of profitability and revenue growth since its initial public offering in May 1999.
“Greg is arguably the best CEO of any tech company in the world,” says Seth Neiman, a Brocade board member who founded the company using funding from Crosspoint Venture Partners, a venture capital firm.
Mr. Neiman, managing partner of Crosspoint, admits he could be somewhat biased, as he hired Mr. Reyes, but he truly believes in his abilities.
“This isn’t a person who was successful just because of a big tech boom. He was going to be successful whether there was a tech boom or not.”
With the Nasdaq slump, Mr. Reyes is facing a major test. Brocade’s stock, which traded as high as $133.71 last fall, dropped below $34 in February.
“Even though it’s sobering for many people to see the effects the economic slowdown is having on technology companies, I think it’s good to drive some sobriety back into the industry,” he says. “The companies that excel over the long run are those with exciting business models and focused, hard-working, dedicated work forces that can execute, versus companies whose value is based on statements of intent. I think those days are behind us.
“I don’t spend a lot of time looking at the stock. I spend a lot of time thinking about what we need to do to build a world-class company. We’re looking at a massive market opportunity in the next 2½ years. Basically, the amount of data that has been generated since the beginning of humanity will more than double. Brocade is sitting right in the middle of it,” he says.
Brocade provides storage area network (SAN) infrastructure to companies such as IBM, EMC Corp., Compaq, Dell, NEC, and Hewlett-Packard. The company’s main products are Fibre Channel switches and management software for SANs. In February, Brocade announced a deal with Sun Microsystems.
Mr. Reyes has told analysts that he expects Brocade’s sales to slow in the second quarter as companies rethink their information technology budgets. He is planning for second-stage growth this year, however, including diving headlong into international markets, especially Europe and Asia. Although the company doesn’t yet have a Latin American presence, plans call for opening an office in the region this year.
“Now is the time for crisp vision, crisp planning, and aggressive execution,” he says. “I’m convinced Brocade will emerge as one of the premier names in data communications in the years ahead. I’m not going to let some economic turbulence or weakness in the stock price take our eye off the ball.”
Before Nasdaq’s slide, Brocade’s performance was rock solid. Its revenue growth made it a darling of Wall Street. Year-over-year revenue growth topped 150 percent the first two years.
They kind of dominate the SANs space,” says Abel García, a senior portfolio analyst at AIM Advisors (see “Midas Touch,” March), which owns Brocade stock in several of its funds. “They are making tons of money, but the economy is so weak that the stock has come way down.”
Mr. Reyes has gained admirers among other industry heavyweights, such as Hector Ruiz, president of Advanced Micro Devices (see “Taking on Intel,” July/August 2000). While Mr. Ruiz was at Motorola, he entered into a partnership with Mr. Reyes, who was heading up Wireless Access at the time.
“Industry in this country has become very cutthroat,” says Mr. Ruiz. “Many businesses are led by people who think that in the name of winning they can do anything. Greg’s not one of those. He’s a phenomenally bright individual, very likeable and trustworthy – and not necessarily in that order. One of reasons I ended up doing a partnership with him is that he’s someone I could trust. In our business that’s very important.”
Mr. Reyes is just as effusive about Brocade’s strengths.
“What has allowed us to become the dominant player in this emerging networking category is really vision. We had a particular vision as to the market and how the market would unfold. We’re not only the de facto standard but the industry standard for how companies network their servers with external storage,” he says.
Being Hispanic has never been an issue in the workplace or his career generally, according to Mr. Reyes.
“It’s something I’ve never really given any thought to because Silicon Valley has always been an environment that is massively diverse,” he says. “It’s an environment where the brightest and hardest-working people and the ones who can execute are the ones who excel. Being Hispanic has been neither an advantage nor a disadvantage for me.”
Mr. Reyes admits his schedule can be hectic. He often divides his time between meeting with analysts or working with his top management team and visiting Brocade sites. But he always knew what the job entailed.
“It’s really living up to the expectations you’re setting for investors, who are investing in you and your company,” he says. “I think that’s a great calling. I think anybody who aspires to be the CEO of a technology company aspires to have this type of experience.”
His advice to young people just starting out in their professional lives is to think of themselves as the CEO of their career. “The key is to look for companies with great market opportunities and great leadership. That should create ample opportunity for career growth and advancement,” he says.
Jonathan J. Higuera is a business writer at the Arizona Daily Star in Tucson, Arizona.
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