Taking the long-term view comes naturally to Jerry Fishman, president and chief executive of Analog Devices Inc. But perhaps that's not surprising for someone who's been at the same company for close to 30 years in an age when executives that hang around for more than five years are considered grizzled veterans.
It takes preparation and planning to work your way up from a product marketing position, and to earn bachelor's and master's degrees in engineering, an M.B.A., and a law degree. It also takes preparation, planning, and a lot of foresight to see how the ongoing convergence
of computing and communications would place a premium on signal-processing technology and the devices needed to translate real-time analog signals into digital and analog forms and build the expertise to meet those needs.
Clearly that patience has paid off handsomely for the 54-year-old executive and his company. In the last four years of Fishman's term as chief executive, Analog Devices has seen revenue climb from a little more than $1 billion in fiscal 1996 to $2.6 billion in the fiscal year ended Oct. 28.
The company's revenue stream from communications applications has also skyrocketed, jumping from about 15% a few years ago to more than 45%.
Much of that success can be credited to large investments in research and development, despite industry slowdowns, and a two-sided product strategy. On the signal-processing end, Fishman has helped Analog Devices carve out a solid niche in DSPs, the heart and soul of the white-hot digital-communications revolution.
Analog Devices' DSP revenue in fiscal 2000 grew 115%, or approximately twice the rate of the rest of the company's product line.
At the same time, Fishman has kept the company focused on its historical strength-high-performance analog.
In data converters, for example, the company remains far and away the industry's leading supplier with a 34% market share in 1998 and better than three times the sales of its nearest competitor, according to market researchers at Dataquest Inc., San Jose.
Fishman has also bolstered Analog Devices' strength in another key component in the communications spectrum-amplifiers-in which the company plays a leading role, particularly in the high-performance end of the market. And the company has received a big boost financially from its strong product portfolios for the DSL and wireless markets.
While Fishman is known for his ability to see the big picture, he's also known as one who doesn't get bogged down in details.
"Unlike some executives, he knows how to delegate to the people who understand the technology better than he does," said analyst Will Strauss at Forward Concepts Co. in Tempe, Ariz.
Fishman's long-term focus on analog and DSP has begun to pay off recently. In the fourth quarter of fiscal 2000, revenue jumped 87% from the prior year's fourth quarter, well ahead of expectations.
In mid-November, when Fishman announced the year-end results, he said there were early indications that the company's fiscal 2001 revenue could reach $3.8 billion.
The key to reaching that goal will likely lie largely in his ability to continue to push Analog Devices' DSP efforts, observers say.
Analysts note that DSP has already proved to be a tremendous revenue generator. For every dollar the company generates in DSP sales, it sells at least $2.50 in related mixed-signal and analog chips. And that relationship is likely to intensify as new markets develop.
"Once we start moving real-world signals, like speech and video into the digital domain, the only thing that can modify and improve those signals is DSP," Strauss said.
Crucial to Analog Devices' DSP efforts will be its recent partnership with Intel. The two companies reached a major milestone last month when they jointly announced the Micro Signal Architecture (MSA), a new fixed-point, 16-bit DSP. Designed to deliver more than six times the performance of competitive products on the market, the MSA will provide the foundation for Analog Devices' next-generation DSPs.
"While meaningful revenue from this architecture is still a few years away, partnering with Intel promises to give Analog Devices greater mind-share, and that'll help, particularly with customers who are new to DSP," Strauss said.
The company is only now in the early stages of capturing all the returns on the investments that it's made, said Drew Peck, an analyst at SG Cowen Securities Corp., Boston. "That's something that could persist for many years and, in fact, has propelled them to a growth rate that's substantially higher than most of their competitors."