RONNIE KENNETH Chairman and CEO of Voltaire

Ronnie Kenneth

The roots of the Israeli high tech industry is in the Israeli Defense Forces. For example, people that were involved in technology projects in the army are now participating in the commercial world. Then we saw people moving from the army to work for U.S. companies opening design centers in Israel. People who worked in these design centers for a few years said "why don't I go do this on my own". At the time there were not many Venture Capital firms in Israel. In the late 90's, there was more U.S. VC involvement here because people realized opportunities existed and that completed the ecosystem here, making us second only to the Silicon Valley. The whole ecosystem is here -- I think it has to do with the culture and mentality. People have the guts and the faith that they can succeed against the odds. Israel itself is a start-up. It's only 60 years old and we are patient, we know we can succeed against the odds and that fits the entrepreneurial spirit well. You have to have the right personality. You can have money and technical knowledge, but if you do not have the right personality, you will not be successful.

United World
You have extensive experience in not only founding your own company but have been an entrepreneur and the lead force behind raising millions of dollars for many start-ups. Can you tell us about your experience as an entrepreneur in Israel and how you take on new talent?

Ronnie Kenneth

I think you are born an entrepreneur and it is in your blood -- you feel like you have to do it. I knew early on that I wanted to start something from scratch. I got this in the Silicon Valley and when I came back to Israel my time there helped me greatly. When I got involved in Voltaire, we realized that we needed Venture Capital to build a company. I think that there is a great similarity between Israel and the Silicon Valley. I like to ask people about their first impression of the country and they always say that Israel is like California -- the pace and the climate is the same. I do not think that people are wrong to say that we are second only to the Silicon Valley.

United World
In this wave of innovative and entrepreneurial spirit Israel has become a fiercely competitive in both the local and international market. Players such as Voltaire, Elbit and ECI, as well as companies such as Intel, Google and Cisco have made significant investments into the sector demonstrating the confidence major international companies have in Israel's ICT segment. How would you assess the growing ICT sector in Israel, and where do you see Israel standing in terms of its competitiveness in the global market?

Ronnie Kenneth

The Israeli market is very small; all of the hi-tech companies that are started here do not have backyards in which to play. Here we look outside of the country; we do not build our business momentum from Israel. From day one, the founders look at the outside world. They have to look at how to build a company out of Israel that has to be global.
When you speak about large international players, they do not come here because of the local market, but because of the intellectual potential to boost their Research and Development organizations.

United World
Voltaire not only designs and develops but offers a comprehensive product portfolio, with your Grid Director Switches, adaptors, InfiniBand Routers and so on. What have been some of the major challenges that you have faced and how have you worked to overcome them?

Ronnie Kenneth

I think that basically you can find great talent here. The turnover is not as high and people are very loyal, therefore the strength is that you have a powerful technical pool that is willing to work extremely hard. Israelis do not draw the line between personal and business life and we work around the clock. We are willing to work very hard against the odds. I believe that the right structure is to have Research and Development in Israel and corporate headquarters in the US. The advantages are only there if you now how to manage yourself. Communication is a big challenge and if you do not accept the fact that problems exist, you will have problems. You must recognize that there is a challenge but if you do it correctly, you can use it as an advantage.

United World
2007 was a major year for Voltaire in terms of growth and execution…laying strong foundations for future growth and performance in 2008 and beyond. You delivered on all of your financial and operational targets, reaching major new milestones with $53 million in revenue and gross profits up $23 million. How did taking Voltaire public contribute to such a successful year and on a personal note, how was that experience for you?

Ronnie Kenneth

I see this as an extreme sport and it was a very intense excursion. An IPO is a challenge but it is something to look forward to. I think the experience is similar to an athlete competing in a triathlon -- you know it will be tough, but you are passionate about doing it. I thought it was great. I think that investors in Voltaire's stock do not care about where we come from, as long as they like opportunity, the product and management. When we went public, we partnered with top American investment banks that had experience dealing with Israeli-based companies.

United World
Throughout 2007 you were able to continue to execute your vertical market strategy. How has going public helped the company strategically?

Ronnie Kenneth

We now have much more cash in the bank. The most important things in this business are your customers and partners, and when they know that you have this cash -- that you have financial stability and less risk -- it gives them more confidence in you. The viability of our company was affected very positively.

United World
Does it give you a competitive advantage?

Ronnie Kenneth

I think the fact that we are smaller and faster with no legacy equipment gives us an advantage. We are very flexible. We are more agile than our large competitors. Going public does not give us an advantage because they have already done it. There could be an advantage over newcomers because we have momentum and strong relationships in the market.

United World
2007 saw the rapid adoption of Voltaire products in sectors outside of your traditional markets, i.e., government, Research & Education. You have established relationships with some of the biggest ICT companies in the world….Hewlett-Packard, Silcon graphics, IBM, with whom you just renewed you OEM contract with through 2010. How important are these partnerships in building the Voltaire brand?

Ronnie Kenneth

Our partnerships with companies such as HP and IBM give us a huge advantage because they open up global channels for us. They enable us to scale our business globally very rapidly.

United World
Does the foundation of partnerships you have serve as a platform for new partnerships?

Ronnie Kenneth

Absolutely. The company I just mentioned has several design centers here. The largest IBM research center outside the US is in Haifa. Our partners know who we are and appreciate the local talent. My number one challenge is to keep our customers wherever they are from realizing that we are foreign. Our distance and culture is transparent because we have global partners. Teva Pharmaceuticals is a good example of a truly global company and I see them as a model.

United World
What are you doing to achieve these goals?

Ronnie Kenneth

We have the fundamentals in place: a fast growing market, strong management and great technology. We are well-positioned to capitalize on the opportunity and we just need to execute well. Think of Voltaire as a global company with foundations in Israel.

United World
Israel and the USA continue to have strong economic ties. In 2006 bilateral trade totaled more the $30 billion, US is the largest export market for Israel. Many of your vibrant business partners are American based companies. What does the American market mean to Voltaire?

Ronnie Kenneth
Any high tech company will tell you that unless you are a leader in the US market, you are not going to be successful. In high tech, the US is very open and receptive in adopting new technologies and therefore, if you want to grow fast, the US is your prime market.

United World
How do you position yourself in the US market?

Ronnie Kenneth

Our position is a function of the value of our product. It is a normal competitive landscape -- there is nothing unusual. I encourage our employees in Lsrael to go abroad and I encourage our American employees to come here all the time because that improves communication. If we do not do this, we may end up with two companies. You must ensure that it works in harmony.

United World
How often do you visit the US?

Ronnie Kenneth

I live in airplanes. If you take a flight on Sunday from Israel to New York, it is like an organized tour. It is not easy, but if you choose to be in this business and have your personal life in Israel then that is the price you pay.

United World
It is always not only interesting but important to learn about the people who we interview and who are in charge of the companies and institutions that we are going to highlight in our report. You have extensive experience in developing ICT companies. May you please tell us and the readers of USA Today the accomplishments that have given you the most personal satisfaction?

Ronnie Kenneth

I have international and global experience myself. When I see young entrepreneurs, I wish they would spend some time in the Silicon Valley. If you are a rising basketball star, either you play basketball in some small team or you play in the NBA. When you bring that kind of experience you will be very good. I think that having global experience has been important for the work that I do.

Voltaire has been a great achievement. Taking it from its start to a public company was an amazing experience -- but it is just the beginning. The IPO is just a milestone and I look forward to the rest. I am also very proud of the fact that we did this in Israel. I am Israeli and I am proud of my country, which is why I chose to do it here. Chances are, you will be more successful in the Silicon Valley, but I said no. I will do it from here and I am very proud of that.

United World
Where would you like to see Voltaire in 5 years?

Ronnie Kenneth

The vision is $500 million turnover with presence in every major market and to be known as the best company in the industry. People who want to build new data centers will come to Voltaire.

United World
What is the final message you would like to send to the readers of USA Today?

Ronnie Kenneth

In all sincerety, we are trying to build a great company and we are succeeding. I hope that with your 5 Million readers, when they hear the name Voltaire, they will remember that it is a synonym for excellence. The reason I talk about greatness is that I recently read a great book by Jim Collins in which he talks about how to take a company from good to great. Simply put, we are a team of people that are trying to build a great company.

United World
Thank You for this interview.