Bay Networks faces a bright future in the Asia-Pacific region despite the company's poor results and sliding share price, area marketing manager for north and central Asia, Jeff Gustafson, says. The United States' third-largest networking firm was rocked last week by the announcement of lower-than-expected fiscal first-quarter earnings and the resignation of president and chief executive Andy Ludwick. Its share price has fallen 50 per cent in the past eight months. Mr Gustafson said the CEO's resignation, which Mr Ludwick had earlier denied, was a necessary step in the company's evolution. 'We need this right now,' he said. 'I think this will energise the company. People are not saying they no longer want to work here.' The changes at the top would have no direct effect on business in the region because Mr Ludwick had little to do with day-to-day operations, he said. The international division was largely headed by an international management team. 'We have absolutely no word of any kind of down-sizing or reduction in sales people or products, if anything it's the opposite,' he said. 'We might see international operations become more active because these markets are higher growth. There will . . . be more investment.' Bay has traditionally played well in the hub market, but like competitors Cisco Systems and 3Com it has begun acquiring companies to extend its product range to offer end-to-end solutions, particularly in switching technology. The company most recently acquired Lancity, considered the de facto standard for cable modems. Mr Gustafson said he disagreed with analysts' statements that Bay technology lagged behind competitors and its products were late in coming on to the market. 'I think overall we're not behind,' he said. '[IT analysts] IDC recently did a study showing us with the largest market share in network management and with our acquisition of Xylogics, the remote access area is really taking off in countries such as Taiwan, Indonesia and Malaysia.' He said the greatest challenge in the region was reseller confidence. 'The lack of confidence is more due to what competitors are telling our resellers than our stock results,' he said. 'We just have to go through a very labour-intensive process, telling our resellers we're still building up our staff and investing in new training and support centres. It's really just personally giving them some confidence.' Industry analysts said however that in the Asia-Pacific region the confidence issue could be harmful for the struggling company. Relationships still played a large role in distribution channels and even with new product launches, Bay's brand recognition was well below Cisco's, they said. Over the past two years, Cisco has overtaken Bay's market share in most networking areas, they said. Mr Gustafson said that Bay's brand-name recognition was increasing across the region. 'It's unfortunate we've had this background stuff to deal with because our Asia-Pacific business is beginning to grow,' he said. 'People have begun to come to resellers asking for our products.' Chairman Paul Severino will serve as Bay's acting chief executive.